“But top Postal Service officials and outside experts say that another, underappreciated factor has been an insistence by Congress that the service not compete directly with private companies, even as companies like FedEx and U.P.S. have encroached on the Postal Service’s turf.”

April 21st, 2012

What’s wrong with this sentence in the TImes, which laments the fact that the Post Office is not able to compete with FedEx and UPS? Give up?

FEDEX AND UPS CANNOT COMPETE WITH THE POST OFFICE FOR THE DELIVERY OF FIRST CLASS MAIL. The government carved out a cartel for the cartel. This is preposterous.

In other countries, post offices double as banks or sell insurance or cellphones. In the United States, Congress has barred the Postal Service from entering many of these areas. In the 1990s, forecasting a decline in first-class mail, the Postal Service tried several nonmail products, like phone cards, money transfers and e-mail accounts. But Congress said the ventures created unfair competition for the private sector and did not seem to make much money.

Companies like U.P.S. also objected. According to a 2000 report on the Postal Service’s e-commerce activities by the Government Accountability Office, U.P.S.’s position was that “a government monopoly should not be allowed to use the benefits of its government standing to attack the private sector.” In 2006, Congress restricted nonpostal activities and told the agency to stick with delivering the mail.

Even so, in 2008, the agency tried to raise additional revenue by selling postal meter cartridges to corporations, branded with its logo. But the plan was shelved after Pitney Bowes, a major supplier of ink cartridges, appealed to postal regulators who answer to Congress, saying that the service would cause “immediate harm” to its business.

The Postal Service said that such restrictions might have cost the agency billions. A 2010 report from the Postal Service’s inspector general said introducing 10 new products like secure e-mail, electronic bill payment and even some banking services could add $9.7 billion annually to Postal Service revenue, which was $66 billion in 2011. But over half of those products would require a change in legislation.

Good! Expanding government monopolies is the wrong path.