LP RELEASE: Privatize the
Postal Service March 26, 2002 =============================== NEWS FROM THE LIBERTARIAN PARTY 2600 Virginia Avenue, NW, Suite 100 Washington DC 20037 World Wide Web: http://www.LP.org =============================== For additional information: George Getz, Press Secretary Phone: (202) 333-0008 Ext. 222 E-Mail: pressreleases@hq.LP.org =============================== Latest increase in stamp prices is proof that it's time to privatize the Post Office WASHINGTON, DC -- Instead of raising the price of
first-class stamps to 37 cents, the federal government should lower mailing
costs by opening up the Postal Service to free-market competition,
Libertarians say. "It's time to stamp out the monopoly at the Postal
Service, which costs consumers billions of dollars," said Steve Dasbach,
Libertarian Party executive director. "The price of first-class mail
will continue to move in one direction -- up -- as long as it's a crime to
compete with this inefficient, government-created monopoly." The price of a first-class stamp will rise to 37 cents
from 34 cents in June, once the plan announced on Friday by the Postal Rate
Commission goes into effect. The rate hike -- the third in 18 months
-- will cost consumers about $5.6 billion, according to the Direct
Marketing Association. "The Postal Service claims it needs the rate hike to
close an expected deficit of $1.7 billion, and to offset the loss of
business to so- called competitors," said Dasbach. "But the
truth is that the Postal Service doesn't have any competitors in the delivery of
first-class mail -- and that's just the problem." Federal law makes it illegal for FedEx, UPS, or any other
private company to provide first-class mail delivery. In addition,
the quasi- governmental agency is exempt from zoning laws, customs
regulations, and vehicle taxes that hinder private package-delivery
companies, such as FedEx and United Parcel Service. "Imagine how much a Ford Explorer might cost if it
were illegal for any other automaker to produce an SUV," said Dasbach.
"Or imagine how often the price of milk or eggs would increase if only one
grocery store was allowed to sell them. How often can a business that has no
competitors raise its prices? As often as it wants -- which is exactly
what the Postal Service does." Monopolies have no incentive to run an efficient
operation, noted Dasbach, because they can't be undercut by competitors. As a result, productivity growth at the Postal Service
over the past 30 years is just 11.1%, compared with 53.4% for all private
companies, according to the U.S. Department of Labor. Even the Postal Service admits that it is woefully
inefficient, said Dasbach. "For example, last year the agency announced that
turning some air mail deliveries over to FedEx would save $1 billion in air
transportation costs," he said. "That means FedEx can do the
same job for less -- even after paying the costs of taxes and regulations from which
the Postal Service is exempt." And even former Post Office officials think it should be
privatized, said Dasbach. "Former Postmaster General William J. Henderson said,
'I ran the Postal Service. It should be privatized.' " he said.
"When even the Postal Service admits that its monopoly status is harmful to
consumers, how can anyone else disagree?" Another byproduct of the Postal Service's monopoly status:
Greed. Last year the agency paid $197 million in bonuses to
executives, even though it ran a $199 million deficit. And it has forked
over $900 million in bonuses over the past five years. "Executives at private companies are rewarded when
they succeed, but postal bureaucrats are rewarded when they fail," said
Dasbach. "With this latest rate hike, the Postal Service will be rewarded
for its failures -- again. "The only solution is to inject this ailing,
inefficient government monopoly with a healthy dose of competition," he
said. "If the Postal Service can prosper along with competition from FedEx,
UPS, and other private firms, let it do so. But if it can't, it's time
for the federal government to stop playing Postal Monopoly with the
taxpayers' money." ----------------------------------------------------------------------- The Libertarian
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