Gloom of Night

27 February 2008

The Woman of Interest alerted me to the fact that the USPS will be increasing its rates again in May. A one-ounce, first-class stamp will cost another US$0.01.

The problem here is that the Postal Service long-ago passed the point where each increase in price caused a drop in total revenues, as people began switching first to facsimile machines and, more recently, to e.mail. And officials report their expenses as continuing to climb, which shows that they're not paring dis·economies of scale. Basically, officials increase the price per letter in an attempt to off-set the cost per letter which increases as the number of letters decreases because of past price increases. It's a death-spiral.

Post officials have long been told, and surely recognize, where things are headed. They probably feel that there would be little for them but grief in attempting at this point to promote the reforms that could get the the Postal Service off its present path.

My expectation is that we will eventually be told that privatization failed, that the Postal Service will stop pretending to be a firm, and that its prices and services will be determined by political and bureaucratic notions of necessity and of justice, with overt subsidies off-setting ever-increasing deficits.


6 Responses to Gloom of Night

  • Do you think a mere rolling back of their prices would be sufficient to reverse this trend at this point?

    • Daniel says:

      Even in the face of postal price cuts, I don't think that people will go back to using the USPS rather than electronic communications, nor do I think that they will cease to increase their substitution of electronic communication for old-fashion mails. I do think that the rate of increase (the second difference, as it were) would slow if prices were cut.

      However, even if price cuts actually got people to return to using the Postal Service, that wouldn't get the USPS out of the red. They got to to point where increases began to actually reduce revenues because of other costs.

      The US Constitution empowers, but does not require, Congress to establish post offices and postal roads. (There was even some debate about whether that establish meant cause to come into being or merely designate.) The reasons that we continue to have a USPS, instead of (truly) privatizing the mails are:

      1. a popular notion that those who live in remote areas should not have to pay prohibitive postage costs
      2. the desire of some for employment with the government
      3. the greater ease for state officials to control and monitor communications routed through a state postal service

      The last of these is repugnant to those with a reasonable distrust of state authority. The second is mostly a practical problem of a parasitic voting bloc. But it would be very helpful if, with respect to the first factor, people understood and acknowledged that it would be far more economically efficient if we simply privatized the mails and overtly subsidized delivery to remote areas. Indeed, if we got people to see that much, then we could also get them to consider means-testing of remote delivery, so that subsidies didn't go to vacation homes and so forth.

  • raina and or pluvia says:

    I wish you two were not gone! Well, I mean I miss your intelligent insights.
    Maybe I need my own new journal.

    • Daniel says:

      We're still reading your LJ, though we can only comment anonymously (which rules-out any comments to Friends-only entries), and won't be able to read the Friends-only entries after our LJ accounts are purged.

      • raina and or pluvia says:

        I was wondering if the anon comments were you two.
        I don't plan to use friends only.
        Even though there are few people reading my journal daily waiting for something bad to happen to me, if they enjoy this, they are a whole new level of sick.

        I used to think they should just make a $50 cent stamp and leave us alone for awhile. I haven't rethought it in awhile.
        I use them when possible, somehow they are faster than UPS 2 day where I live for so much cheaper. It's the only thing they have going for them.

        I like your journal format.

        • Daniel says:

          I've been adding —Daniel to the bottom of my comments to you, and the logged IP numbers should all correspond to San Diego locations. (Some will probably soon be from Tucson.)

          I'm sorry that some people are wishing you ill.

          Now-a-days, rapidly raising the price of first-class postage by about a third would cause a huge drop in such mails, and the average cost of delivery would end-up being a lot higher than the new price ('cause average costs are basically U-shaped, and we're on that part of the U where reducing total quantity increase average costs). There'd also be a political fire-storm. If other postal rates went up by about the same amount, then print-periodicals would die en masse, and book sales would nose-dive. (Other sorts of shippers would simply move to other carriers, but the loss of book-rate would be a huge hit to book sellers.)

          Right now, the format of the journal is mostly the WordPress default, with a few tweaks (as in replacing the head text with a text-based graphic). I agree that it's a pretty good format, though I plan to keep tweaking it.

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