Privateers would gain, the public would lose

0 Comments | Insight on the News, Jan 30, 1995 | by Walter P. Coombs

Run up the Jolly Roger! The privateers are back. Operating under the aegis of government as did their predecessors some two centuries ago, they intend to rob the public in the same manner that the legalized pirates of that era pillaged unarmed merchant ships on the high seas. Only this time, the target isn't a freighter. It's the mail truck.

Until well into the 19th century, governments issued letters of marque, authorizing private raiders to seize enemy merchant ships. But those entrepreneurs cared little about whose ships they plundered. The line between privateers and pirates became blurred; often they looted ships from their own country.

Today Capt. Kidd and Capt. Blackbeard are waiting in Washington for word from Congress that the postal system is up for grabs. Word is they've already redesigned the system's logo. Instead of an eagle, the emblem will be the skull and crossbones. The motto? "All the traffic will bear!"

The Republican majority in Congress, in implementing its "Contract With America," will commission a new breed of privateer, substituting private profit for public service. The immediate target of the Dole-Gingrich crew is the U.S. Postal Service, a $50 billion enterprise that is a sitting duck in waters becalmed by the ineptitude of the Clinton administration.

Greedy privatizers already are plotting to dismantle the system. Never mind the intent of the Founding Fathers, who wisely provided for a people-owned and operated mail-delivery service. Every freebooter from the Cato Institute to the Heritage Foundation is smacking his or her lips at this opportunity to turn the privateers loose on Ben Franklin's creation.

The prospects of privatization are enough to boggle the mind of the most ardent free enterpriser. What would it be like? The privatized postal service would be a series of regional monopolies necessitating some degree of regulation. Just as in broadcasting, rules would be issued by state regulatory agencies and the Federal Communications Commission. To pay for the latter, an access fee would be charged to cover participation in interstate commerce. States would add their own regulatory fees, including a variety of taxes. User fees tacked on by cities and counties would aid local coffers. And, if the past is any guide, the regulatory agencies soon would be taken over by those supposedly regulated.

Since the regional services would be profit-making entities, there would be the usual public offering of shares. Along with that would come lucrative stock options, pension plans, golden handshakes, big salary payoffs and other lush benefits to lucky executives. Mergers, buyouts and golden parachutes surely would follow. A new political action committee called POSTPAC would emerge with support from those who supply the postal enterprises: truck companies, airlines, railroads and others.

Postal rates soon would rise, wages and employee benefits would be cut, private profit would be enormous and postal patrons would be victimized by monopolies over which they would have little control. When, as a result of consumer complaints, Congress acted to break up the private monopolies, letter writers would be badgered by one postal operator after another, each promising rate reductions that in the end will be no less deceptive than current offers from competing telephone companies.

What will the privateers do to the stamp? Instead of a uniform 32-center issued by Uncle Sam, each regional, private company would be entitled to print its own stamps. (It will be a stamp collector's nightmare, or bonanza, depending on one's point of view.)

To reduce cost, the U.S. flag would disappear from the first-class stamp. Instead, each postal monopoly would sell space on its stamps to commercial advertising companies, which in turn would use that space for ad campaigns to promote soap, cigarettes, lotteries, deodorant and anything else with a logo that could fit on a stamp.

But not all first-class mail would move for 32 cents. It would depend on the destination. What logic dictates that a birthday card to Grandma, carried from Maine to California, should go for the same price as a locally mailed and delivered credit-card bill? Patrons would pay for what they get.

Competition dictates that great quantities of mail headed for New York or Chicago ought to go less expensively than mail destined for Fargo, N.D. In fact, there is no reason that Point Roberts, Wash., located at the end of a godforsaken peninsula reaching down into Puget Sound from Canada, should have any delivery at all. Well, maybe at Christmas.

As that holiday approaches and the volume of mail increases, rates would rise correspondingly, just as oil companies increase the price of gasoline before Labor Day. Those who bought prestamped Christmas cards 90 days in advance for delivery three weeks before Christmas would save on postage for their greetings.

Frequent-mailer plans for those who send out a large volume all year would include upgrade privileges, allowing second- and third-class mail to ride in the first-class pouch. In a decidedly pro-business approach, the price of junk mail would fall sharply. This would encourage businesses to increase the volume of their easy-to-deliver mail, since it is simply marked "occupant." The first-, second- and third-class categories eventually would disappear. Instead, there would be a business rate and an individual rate. Guess who would pay more?