Thursday, December 30, 2004

Going Postal

An old neighborhood friend is in town for the holidays from California. Today we grabbed her brother and the three of us went to a movie. On the way we talked about life in California and I kept thinking about my article on California’s twisted laws.

For example, her cell phone is taxed at the state, county and city level with total taxes adding up to about $20 a month. But one of my friend’s more frustrating complaints wasn’t California law; it was one of the oldest national monopolies in the country: first class mail.

My friend works for a church in LA and one of her duties is sending out the bulk mail, a chore which the US Postal Service makes sure is not easy. For starters, the post office is about the only place in LA that accepts checks. Every other organization flatly refuses them since check fraud is so common and LA is so large (making it hard to track bad check writers). That, in itself isn’t a problem. But checks are the only thing they accept—no cash, no credit cards. This isn’t just a huge inconvenience for my friend; it’s a taxpayer burden. God knows how many bad checks are written to the government, but it has to be a lot since accepting checks is too much of a risk for virtually any private organization. Given that it is taxpayer money funding this enterprise, their loss is own loss.

Customer service is problem, too. Take a few thousand letters and the postal workers will pick ten at random. If all of those ten don’t meet their exact specifications (including rules regarding the distance from the content edge to the edge of the envelope’s end), they won’t accept the letters. If there was competition, people could take their hours of stuffing and sorting to another less picky sender. Instead, they have to spend more precious time micromanaging the millimeters.

Prices are high, too, though a lot of people don’t know it. I remember Bill Maher once said that we (the American people) get a “great” deal on first class mail because it’s “only” 37 cents. I doubt that any sustainable monopoly provides deals of any sort. Sure 37 cents isn’t a lot when you send one letter, but it gets nasty when you send a thousand. And considering FedEx and UPS can send packages all over the country for a couple of bucks, there’s no reason to believe an envelope and a few pages can’t be sent for less than 37 cents. Just because you can pay for it with pocket change, doesn’t mean it’s a deal.

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