Is the USPS delivering cronyism to our front door?

However, at least one of the players in this market is under fire: the U.S. Postal Service. Many loathe the Postal Service for its bureaucracy. The private market sees it as a competitor. The political Right sees it as a boondoggle. In addition, the political Left sees the USPS as the possible solution to all of its problems — if it could just stop being mired in controversy.

There was at least a little hope that a recent USPS report, “A Sustainable Path Forward,” would bring a resolution to these competing concerns. Unfortunately, it didn’t.

In short, this report’s solutions were a laundry list of reform proposals, many of which face a lot of resistance and a few of which would actually make the Postal Service more troubled. For instance, its employees currently still have collective bargaining for wages, while other federal employees do not. The USPS has failed to fund its retirement plans and now has more than $43 billion in unfunded liabilities, liabilities that ultimately will fall to the taxpayers if no serious changes are made. The suggestions in the report are neither sustainable nor forward-looking.

And, basically the only suggestion put forward to create more revenue without allowing the Post Office to expand into new markets — raising fees — will actually lose revenue. In particular, the proposal suggests that the Post Office raise prices for package delivery: one of the few areas of its business that is growing.

Economics 101 is that when you raise the price of a good or service, you decrease the demand for it. This might explain why private package delivery companies have been pushing aggressively for the Postal Service to raise prices. They know that they’ll likely get more customers, but at the very least, they won’t lose the ones they have.

The biggest problem with pushing USPS to increase its prices is that it would increase prices for everyone else.

The costs on American consumers would likely increase, particularly consumers outside of the Los Angeles and New York corridors, as the shipping costs to rural communities increased. Increased shipping costs would mean a lot of things to the economy, and they would immediately affect my family and me, as a father of three and a recipient of a lot of packages. And, as the USPS continues to fulfill its mandate to deliver six days a week, those costs would also hit the economy. A double whammy.

Crony capitalism in D.C. is not a surprise. However, letting the taxpayer directly foot the bill should be. Nevertheless, that’s where we’re headed if we don’t come up with real solutions for the Postal Service and at least acknowledge the economics of package delivery.

That all said, it is still a government agency of sorts, so minimizing its role in the future makes sense but certainly not at the expense of the consumer or the economy. Fortunately, the free, private market will take care of this by itself. As package delivery continues to grow and UPS and FedEx deal with newer, more innovative, and more flexible start-ups (Uber, Arrow, etc.), it is likely that the market share of USPS will continue to fall by itself.

There is a difference between trying to create an efficient government and leveraging government influence to force a market to put money in your pocket. The latter is cronyism. We need an efficient government. We don’t need to tip the scales against taxpayers to benefit a large corporation.

There are plenty of changes to discuss regarding the role of the public sector in mail delivery. But changes that only benefit competitors and ultimately leave the American taxpayer holding the bag are the wrong ones to start with.

In the meantime, I’ll watch the delivery square dance on my street.