Option 1 - Status Quo - No change to operation of U.S. Postal Service. USG subsidizes Post Office with $10 billion/year.
Option 2 - Service Cuts - Cancellation of Saturday delivery and closure of 10% of post offices; 20% layoff of postal employees. Post Office continues operating as self-supporting government corporation, without subsidy.
Option 3 - Privatize as Employee-Owned Corporation - Post Office privatized by selling to postal employees over 10 years for $90 billion (current capitalization). Every postal employee has a $150/month paycheck deduction taken to pay the U.S. After ten years, Post Office becomes an employee-owned corporation. (e.g. CH2M Hill)
Option 4 - Privatize Operations Only - Post Office assets (buildings, trucks, etc.) are owned by the U.S.; operation of them is assigned to a private company. The contract is rebid every 5 or 10 years.
Option 5 - Privatize All of It Unconditionally - Post Office sold to UPS, FedEx or DHL for $90 billion without conditions.
Option 6 - Privatize All of It Conditionally Post Office sold to UPS, FedEx or DHL for $60 billion but with permanent conditions (e.g. government approval required for postage rate increases above the inflation rate, post office closures, etc.).
Pack Rat wrote:if it quacks like a duck and walk like a duck, it's still fascism
If the Post Office hadn't been essentially fucked over, we wouldn't need to have this conversation.
...I prefer a man who will burn the flag and then wrap himself in the Constitution to a man who will burn the Constitution and then wrap himself in the flag.
Woodruff wrote:If the Post Office hadn't been essentially fucked over, we wouldn't need to have this conversation.
so that's one vote for privatize as an EOC and one vote for shake fist angrily
That's pretty much my vote in every situation.
My point is that there is no reason why the U.S. Postal Service cannot support itself now.
...I prefer a man who will burn the flag and then wrap himself in the Constitution to a man who will burn the Constitution and then wrap himself in the flag.
Woodruff wrote:If the Post Office hadn't been essentially fucked over, we wouldn't need to have this conversation.
so that's one vote for privatize as an EOC and one vote for shake fist angrily
That's pretty much my vote in every situation.
My point is that there is no reason why the U.S. Postal Service cannot support itself now.
The most profitable parts of the US postal service got privatised- mainly parcel delivery, plus they have to deliver as part of their mandate, where privatised firms can simply say that they won't guarantee.
The US Postal service got screwed. They ended up keeping the federally mandated guarantee to deliver mail that private companies didn't have, but without the packages that actually earned money. Hence federal mandate to deliver unprofitable junk.
the world is in greater peril from those who tolerate or encourage evil than from those who actually commit it- Albert Einstein
Symmetry wrote:hey ended up keeping the federally mandated guarantee to deliver mail that private companies didn't have, but without the packages that actually earned money.
Option 3 isn't really "privatization" if the government* is solely paying for the services, and assuming that the Post Office would operate exactly CH2M Hill. To be clear, if your organization's only employer is the government, (or if nearly all of your organization's revenue comes from only the government), then your organization is not really a "private" market entity. It would essentially be government-operated and/or owned, or depending on the rigidness of the regulations, it could be quasi-government operated, e.g. Xe Factor.
I know people like to use that term, but it doesn't make sense in economics. For example,
"Public" could mean Starbucks or the Park. "Private" could mean my house or the judge's private quarters.
BigBallinStalin wrote:Option 3 isn't really "privatization" if the government* is solely paying for the services, and assuming that the Post Office would operate exactly CH2M Hill. To be clear, if your organization's only employer is the government, (or if nearly all of your organization's revenue comes from only the government), then your organization is not really a "private" market entity. It would essentially be government-operated and/or owned, or depending on the rigidness of the regulations, it could be quasi-government operated, e.g. Xe Factor.
I know people like to use that term, but it doesn't make sense in economics. For example,
"Public" could mean Starbucks or the Park. "Private" could mean my house or the judge's private quarters.
BigBallinStalin wrote:Option 3 isn't really "privatization" if the government* is solely paying for the services, and assuming that the Post Office would operate exactly CH2M Hill. To be clear, if your organization's only employer is the government, (or if nearly all of your organization's revenue comes from only the government), then your organization is not really a "private" market entity. It would essentially be government-operated and/or owned, or depending on the rigidness of the regulations, it could be quasi-government operated, e.g. Xe Factor.
I know people like to use that term, but it doesn't make sense in economics. For example,
"Public" could mean Starbucks or the Park. "Private" could mean my house or the judge's private quarters.
Certainly the government mails things, but I don't think they buy 100% of postage stamps. In fact, I know they don't as I just bought a book of the All-New SCIENTISTS series of stamps yesterday!
Pack Rat wrote:if it quacks like a duck and walk like a duck, it's still fascism
Woodruff wrote:If the Post Office hadn't been essentially fucked over, we wouldn't need to have this conversation.
so that's one vote for privatize as an EOC and one vote for shake fist angrily
That's pretty much my vote in every situation.
My point is that there is no reason why the U.S. Postal Service cannot support itself now.
If that's true, then why is USPS incurring a loss?
Because they got raped. I thought I covered that (with Symmetry's bit of clarification).
...I prefer a man who will burn the flag and then wrap himself in the Constitution to a man who will burn the Constitution and then wrap himself in the flag.
BigBallinStalin wrote:Option 3 isn't really "privatization" if the government* is solely paying for the services, and assuming that the Post Office would operate exactly CH2M Hill. To be clear, if your organization's only employer is the government, (or if nearly all of your organization's revenue comes from only the government), then your organization is not really a "private" market entity. It would essentially be government-operated and/or owned, or depending on the rigidness of the regulations, it could be quasi-government operated, e.g. Xe Factor.
I know people like to use that term, but it doesn't make sense in economics. For example,
"Public" could mean Starbucks or the Park. "Private" could mean my house or the judge's private quarters.
So, you're saying if I ended up owning 100% of the United States Postal Service, it wouldn't be a private company? Come again?
I'm saying that the term "privatization" is not sufficiently clear from an economics standpoint. It just irritates me, and it leads to this unnecessary confusion because people often mistaken "privatization" as a "market" solution, when it clearly isn't at times.
Why?
To use your example, your USPS would be "privatized," but what does that entail?
It would be privately owned, but it wouldn't be a market entity, assuming that your USPS would take the same role as the real world USPS. This is so because of two issues: (1) private property rights, and (2) the economic environment
(1) private property rights There would be a difference between your "private" property rights (re: USPS) and Mr. Bous' private property rights (re: his Gyro huts). With private property rights, you retain certain rights over that property:
(1) right of ownership (who da daddy is?) (2) right to use (you can use it however you see fit) (2a) right to sell (2b) access rights (you decide who can enjoy your services and who can't)
Examples: (1) Who da daddy is. (2b) I, TGD, hereby declare that USPS won't deliver mail in counties X, Y, and Z of Wisconsin because those divisions suck away my revenues. (you can't do this because the USG will say, "Shut up, TGD, and get back to servicing those areas).
Mr. Fat Bous doesn't have to jump as many legal hurdles in order to fire his cook. You would. Mr. Bous, I imagine, wouldn't be as regulated as your USPS, so he can enjoy a higher degree of freedom with his property rights than you could. He can close down Gyro Huts 3, 6, and 8 due to falling revenues. Try doing that as USPS for Wisconsin.
So, compared to the property rights which Mr. Fat Bous enjoys, you don't retain the same degree of private property rights over your "private" USPS. That's why whenever someone says, "Privatize it!" I ask, "and what does that mean exactly?" Private property rights aren't this one-size-fits-all concept. The term "privatization" fails to clarify the degree of the private property rights.
(2) the economic environment
"Privatization" doesn't specify the property rights involved, nor does it explain the environment in which the company will operate. Would the environment be like Mr. Bous and his gyro huts? He operates within the market and the market prices of restaurants and food providers and etc. His gyros and his huts compete with other gyro huts, other non-gyro restuarants, fancy gyro huts, etc. Your USPS is practically the only game in town--especially when it comes to running regular municipal routes because it has a monopoly as mandated by the state.
Notice how the government intervenes in the market for your case, but not so for Bous. Your USPS is not really a market entity; it doesn't really operate within a market--especially when the prices of its services are determined not by the customers but by the government (price controls). What are the substitutes for letters? Emails? Does this make USPS more of a market entity??
Conclusion
Can we say that your USPS is truly privatized? I don't know because that word doesn't explain any of the above issues. There's much gray area with "market" and "private property rights" whenever the state is involved. Privatization simply doesn't clarify that gray area; it only compounds it.
BigBallinStalin wrote:Option 3 isn't really "privatization" if the government* is solely paying for the services, and assuming that the Post Office would operate exactly CH2M Hill. To be clear, if your organization's only employer is the government, (or if nearly all of your organization's revenue comes from only the government), then your organization is not really a "private" market entity. It would essentially be government-operated and/or owned, or depending on the rigidness of the regulations, it could be quasi-government operated, e.g. Xe Factor.
I know people like to use that term, but it doesn't make sense in economics. For example,
"Public" could mean Starbucks or the Park. "Private" could mean my house or the judge's private quarters.
So, you're saying if I ended up owning 100% of the United States Postal Service, it wouldn't be a private company? Come again?
I'm saying that the term "privatization" is not sufficiently clear from an economics standpoint. It just irritates me, and it leads to this unnecessary confusion because people often mistaken "privatization" as a "market" solution, when it clearly isn't at times.
Why?
To use your example, your USPS would be "privatized," but what does that entail?
It would be privately owned, but it wouldn't be a market entity, assuming that your USPS would take the same role as the real world USPS. This is so because of two issues: (1) private property rights, and (2) the economic environment
(1) private property rights There would be a difference between your "private" property rights (re: USPS) and Mr. Bous' private property rights (re: his Gyro huts). With private property rights, you retain certain rights over that property:
(1) right of ownership (who da daddy is?) (2) right to use (you can use it however you see fit) (2a) right to sell (2b) access rights (you decide who can enjoy your services and who can't)
Examples: (1) Who da daddy is. (2b) I, TGD, hereby declare that USPS won't deliver mail in counties X, Y, and Z of Wisconsin because those divisions suck away my revenues. (you can't do this because the USG will say, "Shut up, TGD, and get back to servicing those areas).
Mr. Fat Bous doesn't have to jump as many legal hurdles in order to fire his cook. You would. Mr. Bous, I imagine, wouldn't be as regulated as your USPS, so he can enjoy a higher degree of freedom with his property rights than you could. He can close down Gyro Huts 3, 6, and 8 due to falling revenues. Try doing that as USPS for Wisconsin.
So, compared to the property rights which Mr. Fat Bous enjoys, you don't retain the same degree of private property rights over your "private" USPS. That's why whenever someone says, "Privatize it!" I ask, "and what does that mean exactly?" Private property rights aren't this one-size-fits-all concept. The term "privatization" fails to clarify the degree of the private property rights.
(2) the economic environment
"Privatization" doesn't specify the property rights involved, nor does it explain the environment in which the company will operate. Would the environment be like Mr. Bous and his gyro huts? He operates within the market and the market prices of restaurants and food providers and etc. His gyros and his huts compete with other gyro huts, other non-gyro restuarants, fancy gyro huts, etc. Your USPS is practically the only game in town--especially when it comes to running regular municipal routes because it has a monopoly as mandated by the state.
Notice how the government intervenes in the market for your case, but not so for Bous. Your USPS is not really a market entity; it doesn't really operate within a market--especially when the prices of its services are determined not by the customers but by the government (price controls). What are the substitutes for letters? Emails? Does this make USPS more of a market entity??
Conclusion
Can we say that your USPS is truly privatized? I don't know because that word doesn't explain any of the above issues. There's much gray area with "market" and "private property rights" whenever the state is involved. Privatization simply doesn't clarify that gray area; it only compounds it.
I enjoy your posts as much as anyone (probably more than anyone), but I'm merely going by Saxi's option. There are no restrictions in Saxi's option as to how the owners of USPS would run USPS. And yes, I did not read Saxi's link.
BigBallinStalin wrote:Option 3 isn't really "privatization" if the government* is solely paying for the services, and assuming that the Post Office would operate exactly CH2M Hill. To be clear, if your organization's only employer is the government, (or if nearly all of your organization's revenue comes from only the government), then your organization is not really a "private" market entity. It would essentially be government-operated and/or owned, or depending on the rigidness of the regulations, it could be quasi-government operated, e.g. Xe Factor.
I know people like to use that term, but it doesn't make sense in economics. For example,
"Public" could mean Starbucks or the Park. "Private" could mean my house or the judge's private quarters.
Certainly the government mails things, but I don't think they buy 100% of postage stamps. In fact, I know they don't as I just bought a book of the All-New SCIENTISTS series of stamps yesterday!
Those are some incredible stamps, saxi!
Option 3 seems like this to me:
"Hi, I'm employee-owned mail (EOM)! I'd like to provide my services in your fair city."
City: "Ah, welcome, EOM. Yes, we agree. We'll be paying for your services, starting today."
(it would be similar to government dealings with electric companies).
The government essentially pays for the services because (I assume) your option 3 allows USPS to retain its monopolistic status. I assume this because nothing was mentioned of it being allowed to break up, be partially sold to Yo Momma's Mail Inc., be allowed to set its own prices, non-USPS companies would be allowed to run their own regular municipal routes which currently is illegal, etc..
There's little competition with option 3, and it depends on federal laws. If they are currently the same, then I presume that traditional USPS services must be provided in all areas, regardless of the outlays, so someone would have to pay in order to abide by such laws, so the city would pick up the tab (and ultimately the taxpayers). In other words, the government pays for the services.
It would require its citizens to pay because the competition has practically been regulated away (as it has with the energy industry).
tl;dr
Option 3 seems enticing, but if you're saying that they're similar to CH2M Hill, and if my assumptions are correct, then I start to cringe a little.
Last edited by BigBallinStalin on Mon Jun 11, 2012 6:02 pm, edited 1 time in total.
BigBallinStalin wrote:Option 3 isn't really "privatization" if the government* is solely paying for the services, and assuming that the Post Office would operate exactly CH2M Hill. To be clear, if your organization's only employer is the government, (or if nearly all of your organization's revenue comes from only the government), then your organization is not really a "private" market entity. It would essentially be government-operated and/or owned, or depending on the rigidness of the regulations, it could be quasi-government operated, e.g. Xe Factor.
I know people like to use that term, but it doesn't make sense in economics. For example,
"Public" could mean Starbucks or the Park. "Private" could mean my house or the judge's private quarters.
So, you're saying if I ended up owning 100% of the United States Postal Service, it wouldn't be a private company? Come again?
I'm saying that the term "privatization" is not sufficiently clear from an economics standpoint. It just irritates me, and it leads to this unnecessary confusion because people often mistaken "privatization" as a "market" solution, when it clearly isn't at times.
Why?
To use your example, your USPS would be "privatized," but what does that entail?
It would be privately owned, but it wouldn't be a market entity, assuming that your USPS would take the same role as the real world USPS. This is so because of two issues: (1) private property rights, and (2) the economic environment
(1) private property rights There would be a difference between your "private" property rights (re: USPS) and Mr. Bous' private property rights (re: his Gyro huts). With private property rights, you retain certain rights over that property:
(1) right of ownership (who da daddy is?) (2) right to use (you can use it however you see fit) (2a) right to sell (2b) access rights (you decide who can enjoy your services and who can't)
Examples: (1) Who da daddy is. (2b) I, TGD, hereby declare that USPS won't deliver mail in counties X, Y, and Z of Wisconsin because those divisions suck away my revenues. (you can't do this because the USG will say, "Shut up, TGD, and get back to servicing those areas).
Mr. Fat Bous doesn't have to jump as many legal hurdles in order to fire his cook. You would. Mr. Bous, I imagine, wouldn't be as regulated as your USPS, so he can enjoy a higher degree of freedom with his property rights than you could. He can close down Gyro Huts 3, 6, and 8 due to falling revenues. Try doing that as USPS for Wisconsin.
So, compared to the property rights which Mr. Fat Bous enjoys, you don't retain the same degree of private property rights over your "private" USPS. That's why whenever someone says, "Privatize it!" I ask, "and what does that mean exactly?" Private property rights aren't this one-size-fits-all concept. The term "privatization" fails to clarify the degree of the private property rights.
(2) the economic environment
"Privatization" doesn't specify the property rights involved, nor does it explain the environment in which the company will operate. Would the environment be like Mr. Bous and his gyro huts? He operates within the market and the market prices of restaurants and food providers and etc. His gyros and his huts compete with other gyro huts, other non-gyro restuarants, fancy gyro huts, etc. Your USPS is practically the only game in town--especially when it comes to running regular municipal routes because it has a monopoly as mandated by the state.
Notice how the government intervenes in the market for your case, but not so for Bous. Your USPS is not really a market entity; it doesn't really operate within a market--especially when the prices of its services are determined not by the customers but by the government (price controls). What are the substitutes for letters? Emails? Does this make USPS more of a market entity??
Conclusion
Can we say that your USPS is truly privatized? I don't know because that word doesn't explain any of the above issues. There's much gray area with "market" and "private property rights" whenever the state is involved. Privatization simply doesn't clarify that gray area; it only compounds it.
In the option 3, 5 and 6 scenarios the USPS would have the same relationship to the government as any private company has to the government. They could charge $20/stamp if the Board of Directors wanted, or deliver free mail every other Tuesday or not deliver mail at all but convert the post offices into a chain of high-end male strip clubs called "Packages."
Also, the Postal Police would be disbanded and there would be no law against other service providers filling up your slot if they wanted to (though it's unlikely another company could meet the high barrier to entry). Their vehicles would no longer have exempt license plates and they'd have to pay licensing fees to the local government just like any other company.
Pack Rat wrote:if it quacks like a duck and walk like a duck, it's still fascism
A) USPS would be broken up by municipality and auctioned away. This would likely bring in the most revenue from sales, and benefit the most potential owners (the lowered price enables small business owners to participate). All are welcome to attend except for government or quasi-government entities.
B1) The revenue from the sales would only go to the USPS employees in the form of some kind of compensation package, and in addition to B1:
B2) Maybe give the employees some commission for selling USPS equipment and materials (so only the land and building would be auctioned), and/or B3) Maybe also let the employees take some trucks and whatever for $0.00.
Seeing that there is no Option BBS, I voted for Option 3 and Option 5 simultaneously.
In all seriousness, Option 3 sounds most reasonable and all-around pleasing to USPS employees, and it's politically the most expedient. Even though it smacks of SOCIALISM!! (RARG), I think that this opportunity would be highly profitable to politicians who wish to appear benevolent and supportive of the common good.
I'd be happy because USPS would be in the employees' hands yet within the market and also because the legal barriers of entry have been removed.
Last edited by BigBallinStalin on Mon Jun 11, 2012 6:47 pm, edited 1 time in total.
BigBallinStalin wrote:A) USPS would be broken up by municipality and auctioned away. This would likely bring in the most revenue from sales, and benefit the most potential owners (the lowered price enables small business owners to participate). All are welcome to attend except for government or quasi-government entities.
Wait - there's no value in the city of Santa Barbara buying two post offices and a half-dozen mail trucks. The only value is in a network that can deliver a letter from the mail box outside the Crab Shack at El Capitan Beach in Santa Barbara to Dallas or New York or Chicago, not from the Crab Shack to Haggis' dorm, 2 miles away.
BigBallinStalin wrote:Option 3 sounds most reasonable and all-around pleasing to USPS employees, and it's politically the most expedient. Even though it smacks of SOCIALISM!! (RARG), I think that this opportunity would be highly profitable to politicians who wish to appear benevolent and supportive of the common good.
Wait-again - this is a capitalist solution - market forces without government interference. Corporations are free to determine their own means of internal organization. If the privatized USPS decided to be a privately held company by the employees that would, philosophically, be no different than any non publicly traded company.
Pack Rat wrote:if it quacks like a duck and walk like a duck, it's still fascism
BigBallinStalin wrote:A) USPS would be broken up by municipality and auctioned away. This would likely bring in the most revenue from sales, and benefit the most potential owners (the lowered price enables small business owners to participate). All are welcome to attend except for government or quasi-government entities.
Wait - there's no value in the city of Santa Barbara buying two post offices and a half-dozen mail trucks. The only value is in a network that can deliver a letter from the mail box outside the Crab Shack at El Capitan Beach in Santa Barbara to Dallas or New York or Chicago, not from the Crab Shack to Haggis' dorm, 2 miles away.
Well, the cities can't participate in the auction because they'd most likely corrupt the process to an undesirable level. Their disposable income was derived by taxes, which makes it much more difficult for non-governmental actors to compete with them.
As far as the value of the possible investments is concerned, it's up to the savvy entrepreneurs to connect the dots. They'd have to bid away the smaller parts from the 1st-time owners in order to gain a larger whole. They can do this during the auctions, or trade afterward. If they can't, then those assets enter different markets, in turn serving some expected amount of consumers.
Ultimately, this process would yield the most opportunities for the buyers to discover the expected value of such investments. A package deal is a one-time offer to only one company and only its possible mistakes.
saxitoxin wrote:
BigBallinStalin wrote:Option 3 sounds most reasonable and all-around pleasing to USPS employees, and it's politically the most expedient. Even though it smacks of SOCIALISM!! (RARG), I think that this opportunity would be highly profitable to politicians who wish to appear benevolent and supportive of the common good.
Wait-again - this is a capitalist solution - market forces without government interference. Corporations are free to determine their own means of internal organization. If the privatized USPS decided to be a privately held company by the employees that would, philosophically, be no different than any non publicly traded company.
Hm? What are you arguing against?
The above portion is separate from the BBS option. I support Option 3 without a breakup. The employee-owned USPS must now compete within the market (because legal barriers to trade were dropped, IIRC from your clarification)...
Employee-ownership models and all other business models are not mutually exclusive with the idea of capitalism. Essentially, all firms are pockets of socialism within the market system. For example, within Microsoft, you don't see a secretary paying $0.03 per 50 paper clips at their internal supplies department. I imagine that Microsoft internally would incur less transaction costs by distributing such goods through a bureaucratic and centrally governed system.
I haven't had the time to read every post here, or click all of the links provided. What I can add to this discussion is the fact that over the past 13 years, I have seen first-hand how the USPS has been run into the ground by poor management and stupid Congressional mandates! We should be VERY profitable right now, even in the current low mail volume conditions. The USPS is very top heavy, too many managers overseeing other managers in many layers. My boss has a boss he answers to, that boss has a boss, and that boss has a boss. And that's just getting up to the District Manager level. All district managers have a boss, and that boss has a boss. Etc, etc. The mandate to pre-fund retiree health benefits 100%, 75 years into the future, over the course of 10 years has destroyed our financial situation. We would be showing a profit of over $5 BILLION every year if this mandate wasn't in place. There is also the question of mis-managed funds when the retirement system was switched over to the "new" FERS (Federal Employees Retirement System). I would go on and on, and provide links to support my arguments, but I have 3 jobs to take care of in order to support my family. THIS "union worker" is a Conservative/Republican. None of the financial woes mentioned above have ANYTHING to do with unions!
