Tuesday, June 7, 2011

The Google Test: Does the Postal Service Pass?

Today Governor Pawlenty in a speech announcing his economic plan, suggested that the Postal Service passed the Google Test since a competitive alternative could be found by searching Google. 

"There are some obvious targets. We can start by applying what I call 'The Google Test.' If you can find a good or service on the Internet, then the federal government probably doesn't need to be doing it. The post office, the government printing office, Amtrak, Fannie and Freddie, were all built for a time in our country when the private sector did not adequately provide those products. That's no longer the case."

Just for the fun of it, what could be eliminated according to the Google test:
  • The Postal Service should no longer handle transaction mail since on-line alternatives exist.
  • The Postal Service should get out of the business of delivering periodicals as private sector firms do that in many urban areas.
  • The Postal Service should no longer deliver parcels including nearly 30% of FedEx Ground shipments and most shipments under 2 pounds as FedEx and UPS deliver parcels.
  • The Postal Service should not deliver saturation mail as private sector firms do this now in many metropolitan area and could do the same in more.
  • The Postal Service should no onger offer retail parcel, money order or mailbox services since they are offered by the private sector.
  • The Postal Service should no longer deliver advertising as there are numerous other modes for advertising advertised on Google including Google.
I could go on, but it just gets silly.  

Privatization is a legitimate option.  However, the Google test illustrates ignorance about the mail market, the customers that it serves and the economic impact of the Postal Service.  The net result is that the Google test deligitimizes the privatization option, and reduces the credibility of Governor Pawlenty's economic plan..


Anonymous said...

Can you elaborate on this statement?

"The net result is that the Google test deligitimizes the privatization option, and reduces the credibility of Governor Pawlenty's economic plan."

M. Jamison said...

Governor Pawlenty's "Google Test" is one of those sound bite offerings that politicians often throw out to make them look witty or insightful. As in most cases like this the statement by the governor is little more than a triviality with no real substance.
There is virtually nothing that government does that does not have some private sector counterpart, even fighting wars has attracted private contractors.
There are some functions that government provides that are simply done better by the public sector for either socially valuable reasons or because the activity is less effective when connected to a profit motive.
The idea of the postal service, as conceived by the Founders, was as an important piece of national infrastructure. Unfortunately the move towards envisioning the postal service as little more than a mailing company short changes the value of the postal network as infrastructure.
A privatized post would likely result in higher costs to both the mailing industry and to the consumer and would also likely result in deterioration o some important structural capabilities.
The libertarian theology of shrunken ineffective government would not result in the Utopian market freedoms central to this philosophy. Ironically it might lead to the road to serfdom, the title of one of the canons of this limited vision.

Anonymous said...

Yeah , you really got silly. Don't know what you got till its gone...

Anonymous said...

WE also don't need the US Military since Blackwater and Haliburton seem to be doing the job just as well. We also don't need the police since OCP came out with their ED209 and Robocop programs...................

Anonymous said...

I thought the idea was to cut government spending. Approximately how much would be saved at the Federal level by privatizing the USPS, which doesn't use tax dollars? Also, it's easy to find companies that service metro areas, but what about the tens of millions of Americans in rural areas? And what is competitive? Are UPS prices for parcels and letters competitive with the USPS? I thought they charged significantly more.

Richard D said...

Well said, M. Jamison. A few more activities that could be privatizable via the "Google test":
- debating public issues. Why fund national and state senates and houses of representatives when policy can be discussed and decided upon on the Web?!
- determining innocence or guilt. All the "facts" are on the Internet anyway.
- teaching our kids. Who needs face-to-face classes when all of the information in the world is accessible through the WWW?!
The USPS provides value via its universal service. The 2006 Postal Accountability and Enhancement Act started the process of allowing the USPS to operate more like a private business and participate in healthy, competitive product development. Congress must stop tying the Postal Service's hands and it will thrive, even in the digital marketplace.

Anonymous said...

Richard, allowing the PO to act like a business has turned the top execs into selfish, greedy criminals who have ruined the service for the whole country.