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Home Publications Blogs Beat the Press How Much Does Charles Lane Get Paid to Complain About Being Unable to Compete With the Post Office?

How Much Does Charles Lane Get Paid to Complain About Being Unable to Compete With the Post Office?

Tuesday, 23 October 2012 04:57

I'm not kidding. Charles Lane's column in the Washington Post is quite literally complaining about the fact that the Washington Post stands to lose business to the postal service. Lane is upset that the postal service has contracted with a major distributor of ads to use the mail service to bring the material to people's houses. Previously this material was distributed largely by newspapers like the Washington Post, which means that the Post and other newspapers stand to lose from the deal.

Lane is openly upset about this. He wants the post office to go out of business because he has decided that it is technologically obsolete.

Of course any business will eventually become technologically obsolete if it doesn't adapt. Congress has largely put the post office into an impossible squeeze where it has insisted that it be run at a profit, along business lines, while at the same time it has consistently given into whiners from rival businesses, like Lane, who get upset any time they face being out-competed by this 19th century relic.

Businesses tend to get their way since they use their political connections to rein in the post office. For example, about a decade ago the postal service ran a very successful set of ads that highlighted the fact that its express mail was about a quarter of the price of the overnight delivery services of Fed Ex or UPS. The two competitors went to court to stop the ads. When the court told them to get lost, Fed Ex and UPS went to Congress and stopped the ads.

The post office used to provide banking services to much of the population. However, the wizards in the financial sector didn't like the competition, so they had it shut down.

Now we have Charles Lane and the Washington Post complaining that the technologically obsolete postal service is undercutting it in its ability to deliver junk ads to people's homes. Market economies are so tough!



Comments (9)Add Comment
written by JDM, October 23, 2012 5:27
To the conservative mind the post office, like the rest of the US government, is at the same time both completely incompetent and all powerful. How that works is never explained.
banking and internet
written by tom, October 23, 2012 6:05
I think the postal service should get into the isp business, that would replace their shrinking pmail business with email. It potentially would also fulfill the universal service mandate, as the telecom companies do not serve rural residents and underserve many suburban and urban residents.

I didn't know about the banking history. From an American Banker article about possibly reviving banking services, "From the perspective of bankers, ... government-backed competition would not be welcome." http://www.americanbanker.com/...147-1.html
Market Fascists Need a Government Villain to Justify Their Market Power
written by Last Mover, October 23, 2012 7:09
It's an old story. Government is framed as the only monopoly so it must be crippled and not allowed to compete with the private sector, which then frees up the market fascists to proceed and destroy the very competition they "saved" by replacing it with their own monopolies, blocking government entry into areas where it can either provide the service directly at lower cost or establish rules that result in the same outcome.

UPS and Fed Ex crippled USPS by cream skimming or blocking everything that held it up financially, refused to provide low end essential services so many depend on, then cried foul when USPS dared compete with them on one high end service.

What Charles Lane is really upset about is the efficient scale economies available from USPS that WAPO cannot provide, cream skim or block the same way UPS and FedEx did.

Another egregious example is Medicare Advantage/Medicare Part D, where the private sector demanded and received not only a 7% bribe premium over Medicare on grounds that it needed it because it could not compete with a government monopoly, it also prevented government from negotiating for volume price drug discounts and forced it to pay full retail price on the same grounds - that government should not be allowed to use its powerful scale economies and bargaining power to compete with the private sector.

Economic morons like Charles Lane have becomd standard fare conservative drivel in MSM who can no longer tell the difference between monopoly and competition in general, nor between monopoly efficiency and competitive inefficiency, nor between choice for differences in quality versus choice for the same quality at different prices.

The most important difference of all conveniently ignored by hypocrites like Charles Lane is the utter complete dependency on government required by the market fascists to survive, for if they ever had to face the free market competition and claimed efficiency outcomes they preach for everyone else, they would be out of a job, standing in a welfare line somewhere.
written by Alan Goldhammer, October 23, 2012 7:10
The Post Office is also restricted in terms of not being able to close offices or curtail delivery. A significant amount of money is wasted on Saturday delivery (and from my experience over the past several years, one hardly gets anything on that day anyway). A lot of small post offices that are not economically viable are forced to remain open.

It's not a true private sector model.
Postal Network as Infrastructure
written by Mark Jamison, October 23, 2012 7:30
Dr. Baker is correct in chastising Mr. Lane for his inconsistency. The Washington Post and Lane in particular have shown a great deal of animosity towards the Postal Service. In this instance the Postal Service is doing just what Mr. Lane argues it should do, making a businesslike decision to engage with a customer for mutual benefit, but Mr. Lane doesn't like it because it works against his company's supposed interests.
The Valassis NSA follows current law, however the problem is that the current law is a muddle in terms of what the Postal Service should be.
The postal network is an essential national infrastructure. It provides an opportunity for commercial use while accomplishing an important public goal of binding the nation together. Unfortunately Congress, beginning with the 1971 Postal Reorganization Act and through the 2006 Postal Accountability and Enhancement Act has pushed the Postal Service towards a more corporate model.
It was argued that the Postal Service should be more businesslike, a misapplication of terms since really what people were after was for the Postal Service to become more efficient (the terms businesslike and efficient are not synonymous). The postal network serves 160 million addresses six days a week which, besides being quite an accomplishment, also gives it the characteristic of infrastructure - a highway system for goods and discourse.
The management of the Postal Service has been actively trying to undermine the universal service mandate and First Class mail, all in the hopes of moving the organization towards privatization which would benefit the direct mail companies and no one else. Millions rely on the Postal Service for delivery of prescriptions, for its money order system and for payments and remittances. Undermining the postal network would leave millions at the mercy of the financial predators like the payday lending industry.
For a more thorough look at the Postal Service please see the reporting at the site Savethepostoffice.com. and my work http://www.savethepostoffice.com/jamison
What we are seeing in today, and Mr. Lane's article is an example of it, is a dismissal of infrastructure while also undermining several hundred thousand good jobs.
written by JP, October 23, 2012 8:06
The USPS Priority Mail service is a very large factor for the continued growth of my small business. Our 400% growth over the last 5 years would not have been possible without their lower cost and more efficient service. By using Priority Mail I can reliably deliver a product anywhere in the world with a significant reduction in overall cost to the customer.

Sure, we might lose some of our edge if the UPS/FedEx shipping habits of our competitors change but the end result would still be better overall service to the consumer. That would not be bad.
written by skeptonomist, October 23, 2012 8:34
I wonder why Fedex is not delivering junk mail. Could it be that it is not profitable and that being forced to do it would cause losses?
written by PeonInChief, October 23, 2012 10:57
Private delivery services railed against the post office in the 1830s too. But the post office does things the private sector doesn't do. It delivers letters for a low, flat rate anywhere in the country. It delivers packages to places where FedEx and UPS fear to tread (because it's not profitable to send a truck down a winding, rural road for one small package). Indeed FedEx often sends my packages through USPS from their regional center, as it's cheaper. And I don't live down a winding road either.
written by Calgacus, October 23, 2012 7:45
Insisting that a provider of public goods like the Post Office be run at a profit, instead of charging the very low marginal cost, is insane. There are only two postal systems that have this requirement - one of the few structurally bad things economically that Nixon did - the USA & Somalia.

Last Mover: The most important difference of all conveniently ignored by hypocrites like Charles Lane is the utter complete dependency on government required by the market fascists to survive

Indeed. It takes a tremendous amount of brainwashing to erase knowledge that small children have and replace it with the lunacy called "mainstream economics". The government prints money. The private sector doesn't. The private sector gets its money from the government, not the other way around. Business profits come from the government deficit spending that the insane market fascists ceaselessly deride. And again, small children could, can and do (vaguely) understand this.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.