Fauxcahontas Reinvention: Doubling Down When You're Already Busted

An "apology" from the USPS for
stealing my Netflix rental The blurb on the front page of the Puffington Host was intriguing (as blurbs, of course, are meant to be): "Elizabeth Warren Seeks To Reinvent The Post Office".

Could it be something interesting? One of those blue-moon events where a left-wing politician actually has a good, innovative idea? Senator Warren, after all, has the seat previously occupied by Teddy Kennedy, who uncharacteristically championed airline deregulation in the 1970s.

So could Senator Warren be possibly proposing a market-friendly reinvention of the United States Postal Service? It would be a fine idea. The USPS loses billions every year; even its weak revenue stream depends on a government-enforced monopoly; it is hidebound by Congressional micromanagement, a bloated unionized workforce, and its own anticompetitive culture.

And a market-friendly reform wouldn't even be that revolutionary. The United Kingdom turned its Royal Mail into a private for-profit corporation last year. Sweden (of all places) allowed private competition with its state-owned postal service 20 years ago. The people who keep track of such things classify the United States as having one of the least competitive, least-free market postal systems in the world.

So could ex-Harvard prof Elizabeth Warren actually have come up with even a half-good idea in this area?

You may have guessed the answer from the title on this post: no.

Instead, Senator Warren proposes to make the already too-socialist USPS — more socialistic! The bright idea is for the USPS to start offering "basic banking services" (identified in the article as "bill paying, check cashing, small loans"). The excuse is the (alleged) 68 million Americans "underserved" by the current banking industry.

This is the "progressive" answer to government-engineered failure: let's keep doing that, and add on more things to fail at.

This isn't difficult to understand. If banks, credit unions, or other denizens of the financial system could make money serving the "underserved", they would do so. In a relative heartbeat.

The Rube Goldberg process is pretty well understood. Percived problems are (a) politically "solved" by over-regulation; this causes (b) traditional operators to abandon services that can no longer offer profitably. (c) The gap is filled, often less satisfactorily with less traditional firms. (In this case: payday lenders, pawnshops, check-cashers that take a significant cut off the top.) These firms are then (d) vilified as "predatory" and "greedy" by the same pols whose actions brought them into being. Which (e) causes more "solutions" to be proposed, and we're back to (a) again.

Is the USPS equipped with any sort of magic wand to do a better job? Almost certainly not. The only reason this isn't a flat "no": they could benefit from a government-mandated unlevel playing field, getting exemptions from regulations that private firms are forced to follow.

More likely, though: this scheme would just add another money-losing operation to USPS's current business. Congresscritters love to micromanage USPS now; the appeal of extending such fiddling-power into any new services would be near-impossible for politicians to resist.

Senator Warren references this article from The New Republic, which is shot through with the same socialistic fallacies. But in addition, the article muses that this is one area where Obama might follow through on his promise to issue diktats without legislative action. Fascinating that old rag should be so enthusiastic about the executive wielding power unencumbered by Constitutional niceties.

Last Modified 2017-11-30 12:50 PM EDT