Freedom Line Blog

Talk to most people who write about politics for a living long enough and you’ll find that there are certain topics that aggravate them far out of proportion to their ultimate significance. Some issues just get up your nose, even if they’ll never command a news cycle.

For me, one of those issues is the U.S. Postal Service. I’m one of those irritating, libertarian-leaning types that can’t resist the contrarian instinct to object when someone says that the federal government shouldn’t do anything beyond “Protecting our shores, defending the borders, and delivering the mail.” (For the record, I’m fine with the first two).

Perhaps it started when I read about the federal government’s epic battle with the anarcho-libertarian activist Lysander Spooner in the 19th century, when he tried to upend their postal monopoly. But regardless, I’ve felt vindicated in recent years as the the lack of the USPS’s financial sustainability has come to light.

Thus, you can only imagine the joy I felt when Matthew Yglesias, Slate’s liberal economics writer, recently declared himself in favor of privatizing the Postal Service. This was music to my ears:

The model is pretty simple, albeit a little old-fashioned as a way of providing public services. Rather than having taxpayers directly finance mail delivery, Congress has chartered a freestanding entity, the USPS, charged with the legal obligation to provide low-cost daily mail service six days a week to all Americans at a flat rate—regardless of whether it’s cost-effective to do so. In exchange, that entity has a monopoly on ordinary mail delivery. The idea is that the lucrative monopoly over delivery to metropolitan areas will generate enough revenue to cover money-losing rural services without the need for direct taxpayer subsidies. The problem is that the monopoly isn’t nearly as lucrative as it used to be—and barring some wild technological shift, it’s going to keep getting less and less lucrative.

That means that administrative fixes related to Saturday delivery or various schemes to more aggressively lay off workers or cut their pay will only kick the can down the road. Sooner or later the basic model will need a more thorough rethink.

Quite right. But here’s where he stumbles:

But absent open-ended taxpayer subsidies, postal workers are going to suffer. A monopoly on daily mail delivery is an intrinsically much less valuable thing to have in 2012 than it was in 1992, and nothing can change that. A humane approach to privatization would note that the USPS currently owns a lot of valuable assets—not only a good brand, but a massive portfolio of real estate—and that the federal government has no real need for the one-time infusion of cash that would come from selling it. That means the privatized company could be turned over to its workforce as an employee-owned firm. Workers could have a say in how to manage the transition and the ability to benefit as owners from more efficient business even as they lost as workers from the same dynamic.

Those first two sentences are indisputably accurate. The rest of it? Barmy. Outright barmy.

The federal government has “no need” for a “one-time infusion of cash”? The federal government is one slight downturn away from rooting through the cushions of congressional office furniture to pick up spare change! And the preferred method of privatizing the postal service is to turn it into a workers’ collective? That’ll definitely staunch the bleeding from excess union influence.

Want a better model? The answer — and it’s always a bad sign when you have to say this — is to follow Europe’s lead and embrace full-tilt privatization.

Kudos to Slate and Mr. Yglesias for at least leaning in the right direction. But the defect with this analysis — as with the Postal Service itself — is that the time for half-measures is well behind us.