Tuesday, June 7, 2011

Pawlenty Calls for Privatization of the Postal Service

Talking Points Memo reports that Republican Presidential candidate Tim Pawlenty will call for the privatization of the Postal Service when he announces his economic plan at the University of Chicago.

"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."

Governor Pawlenty becomes the first mainstream politician to raise privatization as an option for the Postal Service.  Privatization could have advantages over the current business model if 1) the Postal Service is given the commercial freedom that posts outside the United States have and 2) Postal Service employees share in profits of a for-profit Postal Service through ownership of a significant share of the company.  

While privatization may be the appropriate policy solution, Governor Pawlenty clearly has not thought enough about privatization to realize that it would occur if and only if the Postal Service is relieved of disputed obligations for retirees.   Only when that occurs will the Postal Service have a cash flow, generated from postage revenue and asset sales to make the investments necessary to be a viable private sector company. 

The Google Test

In a separate post, I provide my understanding of the Google test and why Governmor Pawlenty thinks the Postal Service passes.   It also identifies a number of services that the Postal Service now provides that Governer Pawlenty most likely believes that the Postal Service should not provide. 

The Google Test: Does the Postal Service Pass?


Alvin Jochum said...

Another politician who doesn`t know whats going on with the Post Office.The Constitution provides for mail delivery. The Post Office is already as private as it can be. There are many reasons it can`t be privatized.One is the trust factor. People trust us.With privatization comes more tax money to regulate all those who want to deliver mail. Why would they want to? Unless each company is required to deliver to all addresses, like the Post Office, they will only deliver in highly populated areas in order to maximize profit.The government would be better served just giving it to the Post Office, thereby insuring the safety of the mail.

Anonymous said...

all politicians who want to privatize the USPS are looking to put money into either their pockets or their backers pockets, bottom line!