The Post Office and Government Inefficiency

Great post at Beat the Press about reporting on the US Post Office and how it has been crippled by Congressional interference. The key part is this:

Congress has put the Postal Service in an impossible situation. It has imposed restrictions, like the requirement that all assets in its pension and retiree health fund be invested in government bonds,that substantially raise its costs relative to competitors. It has also prohibited USPS from getting into new lines of business that take advantage of its resources in order to protect private sector companies from competition. However it still expects the USPS to be run at a profit.

It is things like this that have been causing my evolution from being sceptical of government in my younger days to increasingly being convinced that government is often, not only in some narrow cases, efficient. Why would the post office be hobbled this way unless our Congress critters feared it could out compete private industry? We frequently see the same sort of thing, but often made worse with the addition of private industry handouts, where government is hobbled from functioning properly to make way for private companies. In this case, at least, private industry does a pretty good job but just look at private industries like health care for where private industry is making a hash out of things.

I still hold to the idea that private markets are best as a first cut assumption, but it seems to me that exceptions make up a rather large minority of human activity. However, since we elect people that don't believe in government and set out to prove that government is inefficient, we often get inefficient government. Put people in power that believe in the ability of government to do good, and we are far more likely to get good government. The problems with the post office (or Amtrak*) don't arise from an inevitable feature of government management, they are rooted in the belief of the people responsible for them that government doesn't work and the consequences of their attempts to prove this true.

I don't really know what to do about this, since it is likely that a substantial number of people will be elected to Congress for the foreseeable future that hate government we're stuck with the bad management. But I can't help but be frustrated that we sacrifice our growth and prosperity for these beliefs (I should add that I recently moved and have been dealing with the utility companies; it's incredible the degree to which most government agencies have improved, licensing bureaus being the key exception, while gas and cable companies continue to be awful to work with).

*Amtrak's problems largely result from trying to treat them as profit making companies rather than public infrastructure. We don't complain about how inefficient trucking companies are because they don't pay the full costs of the roads they drive on and we treat roads generally as if they are free. However, rail transportation tends to have far less externalities than roads, as well as being more efficient at moving people along highly trafficked routes. But for some reason Amtrak is terrible, while the subsidies that public provision of roads supplies to auto manufacturers, trucking, and other logistics companies go unmentioned when Amtrak is being given a hard time.