Peter Orszag: Privatize the Post Office

Former Obama administration Office of Management and Budget director Peter Orszag comes to a conclusion first floated at Reason in what, 1969? You may enjoy his framing:

Those who believe in the usefulness of government must be vigilant about making sure all its activities are vital ones, since the unnecessary ones undermine public confidence. With this in mind, Congress should now privatize the U.S. Postal Service.

Confidence, shmonfidence–you should privatize the sucka just because that would probably deliver better outcomes for certainly less taxpayer money, and you people are supposed to be stewards of the stuff you take from us. Anyway, let's not look a gift endorsement in the mouth. More from the man whose last name in Hungarian means "country":

The Postal Service faces three problems: First, Congress has not given it the permission it needs to cut costs and raise revenue -- and lawmakers seem unable to approve even modest reforms. Second, its market has been declining for years, as e- mail, electronic payment and other alternatives to traditional mail have grown. Third, the economic slump has caused a further drop-off in mail volumes. [...]

[P]rivatization has become the best path forward, mainly because it would take Congress out of the picture. As New York Times columnist Joe Nocera recently argued, "the problem is that neither the management nor the workers really control the Postal Service. Even though the post office has been self-financed since the 1980s, it remains shackled by Congress, which simply can't bring itself to allow the service to make its own decisions." And Congress won't do so, as long as the post office remains part of the government.

The Postal Service has many assets that could be managed more efficiently, if Congress got out of the way. In addition to its 32,000 post offices, it has 461 processing facilities, monopoly access to residential mailboxes and an overfunded pension plan. These assets would attract bidders. Consider, for example, that many processing facilities and post offices sit on valuable real estate, and it may be smarter to sell many of them than to keep them. [...]

The U.S. Postal Service has a long and storied history. Yet it is now struggling because the world has changed and because congressional sclerosis has prevented it from adapting to the new realities. The best way to modernize it now is to move it out of the government.

Link via the frenetic Twitter feed of Doug Mataconis. Reason on the Postal Service here.

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  • Sevo||

    "Those who believe in the usefulness of government must be vigilant about making sure all its activities are vital ones, since the unnecessary ones undermine public confidence."

    Yeah, well....

  • KPres||

    I was going to say how much I agree with that comment. Of course, I probably have a bit of a different definition of "vital" than he does.

  • Tulpa the White||

    Orzag Heil!

  • Tulpa the White||

    The [un]fortunate reality is that the USPS would immediately go bankrupt if it was privatized. It's not any better at what FedEx and UPS do than they are and the access to residential mailboxes is a net loser for them (plus, if we're talking about privatization, why the F would they still have a mailbox monopoly?)

  • Sevo||

    "(plus, if we're talking about privatization, why the F would they still have a mailbox monopoly?)"

    Because the only way it would sell is if it remained a gov't backed monopoly. You think the union would let it turn into a truly private operation?
    I have a better plan; let it go bankrupt, and sell off the actual assets; land and improvements.

  • Pro Libertate||

    Break it up into smaller companies?

  • Tulpa the White||

    But then the Koch Brothers would buy it all up and force people to read libertarian propaganda and ballet literature!

  • ||

    Those ballet-loving sissies. Every good liberal knows tap-dancing is where it's at.

  • ||

    The Postmaster General has reviewed a number of plans that could return the USPS to profitability. But it's not just Congress that committed to USPS largess. The public's feeling of entitlement to "last mile" delivery is also a major issue.

  • Tulpa Doom||

    TARP and the GM stock buy were supposed to be profitable too.

  • Tonio||

    Don't forget the junk mail industry. They'd disappear without access to subsidized last-mile delivery.

  • The Late P Brooks||

    Peter Orszag: enemy of the People middle class!

  • o3||

    this gop talking point dissappeared like a 20 cent stamp after gop reps got an earful from rural red state voters.

  • Spoonman.||

    Who gives a fuck?

  • o3||

    red state rural voters

    duh

  • ||

    And we should care why?

  • aelhues||

    "Those who believe in the usefulness of government must be vigilant about making sure all its activities are vital ones, since the unnecessary ones undermine public confidence."

    Vital? So...no vital need for education, arts......Let's privatize most everything else too, or did he not really mean to say vital.

  • ||

    What I don't understand is the insistence that the United States Postal Service simply must exist. Why? Privatize it completely, and if it falls apart, who gives a shit? Dismantling its contemptible monopoly along with the privatization would ensure other players could quickly jump in and solve the problem.

    Or is that unacceptable in ONLY GUBARMENT KAN DO IT country?

  • Anonymous Coward||

    Some genius interpreted Article 1, Section 8, Clause 7 has been interpreted to mean that not only must government establish post offices and post roads, but that no else may deliver letters without Congressional consent.

    ALL YOUR LETTERS ARE BELONG TO US.

  • Hugh Akston||

    If they did privatize the post office, I would buy my local branch to serve as my headquarters when I become warlord of my neighborhood after society breaks down completely. I would redecorate it with spraypainted graffiti and trash strewn all over the floor. Since the sun would never rise on America again, I would have fires burning in metal drums out front to provide light and heat to the gangs of mohawked, leather-clad bikers that roar up and down the street constantly.

  • Tonio||

    I like the cut of your jib, Sir.

  • The Late P Brooks||

    SOMALIA!

  • Anonymous Coward||

    Unrelated topic:

    Barack Obama is a descendant of the first black slave in America.

    "We have two of the most significant Africans in our country's history being directly related to each other," Joseph Shumway, an Ancestry.com genealogist, told CNN.

    Shumway was part of a team of four genealogists who say they worked more than 500 hours to establish the connection between Obama's family and that of John Punch, an indentured servant who was sentenced to a life of slavery after an unsuccessful escape attempt in revolutionary Virginia.

    So stop being mean to Barry or you're being mean to John Punch(sp?) too.

  • Hugh Akston||

    Shumway is speaking blasphemy against His August Majesty. Everyone knows that Obama's father was a golden eagle, and his mother was a hotel maids union.

  • Phil_EngAmer||

    It seems the best course of action for the postal service would be to move away from union and public sector thinking. You saw the NALC put forward a shortsighted plan that would have taken money from future retirees (http://eng.am/nJ8C0T), but that was thankfully averted when it was found that the postal service had not been overfunding its future retirees (http://reut.rs/nOuHH2).

    The writing has been on the wall, as net income and volume have mail have steadily declined (http://eng.am/oBezLD), but it’s clear a lot needs fixing. It may be time for the USPS to embrace private sector business theory. Government regulation is doing it no favors, and unless it can adapt, more layoffs seem to be the only way to account for faulty business model. It’s sad to see such misfortune befall the USPS, but solutions are there if they can embrace innovation.

  • ||

    Thanks for your suggestion, but they'd really prefer a gov't bailout.

  • mad libertarian guy||

    The problem is that this would almost inevitably turn in to a new Amtrak.

    The actual running of the USPS would be out of the hands of govt, but govt would still support it financially.

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