Tuesday, August 11, 2009

Obama on public-private competition

Breitbart.tv » Obama: ‘It’s the Post Office That’s Always Having Problems’
Yes, it is. But how is that an argument for a "public option" in health care? The US Postal Service has a government-granted monopoly on delivering letters, and also has exclusive access to all citizen-owned mailboxes. Fedex and UPS are excluded from that gigantic market entirely and are restricted to delivering packages.

How would the Postal Service be doing without that monopoly, I wonder? If private businesses could compete to deliver mail, the way they arrange cell phone calls and internet service and deliver packages, what would happen to the US Postal Service?

And that's the example he chose to illustrate his claim that the public option in health care won't wipe out the private insurance industry--a market in which Congress has given a huge protected share of the market to its own government corporation, excluding all competition, and a market in which it is still true, as Obama says, the Postal Service "is always having problems."

Maybe we should all think about that for a minute in the context of Obama's health care proposal--because it seems that he hasn't.


Fred Pilot said...

This is another debate over the extent of privatization, in this case health care finance and not local government as is the focus of this blog.

Health care finance is currently a mix of both public (i.e. Medicare/Medicaid) and private insurance. At issue is whether health care finance should be further deprivatized by creating another government run or funded pot of money.

Anonymous said...

There are certain fundamental government functions that should not be wholly privatized. The problem with much of the privatization has been that traditional government restrictions against abuse don't apply because they are private.

Among other things, "privatization" has been used to effectively create civil and criminal "ordinances" that are applicable to only a few, to which constitutional restrictions are not permitted to apply, and which fundamentally negatively disrupt the relationship between the government and the citizens. "Privatization" is precisely why HOAs are such an abysmal failure for all but board members and those who make a living preying upon people in the HOAs.

Many of the U.S. Post Office functions are already contracted out to private contractors. Transportation of the mail is one example. If the U.S. didn't have exclusive access to citizen-owned mailboxes, that would simply be another "interface" that the HOA would attempt to capture. There is ample evidence around the country of those that control the HOA trying to take choice away from the homeowner for all economically deregulated services (electricity, gas, water, etc.).

Undoubtedly there is some CAI quack trying to figure a way to force people to rent their mailboxes from the association (i.e., privatized) and to be able to threaten homeowners with foreclosure if they don't pay whatever price the vendor dictates (the vendor will have a financial "arrangement" with the board or management company and belong to a trade lobby group that preys on homeowners).

Don Nordeen said...

Comparing the US Postal Service to either Fedex or UPS is an apples-to-oranges comparison, at least in part. They compete with one another on some services but not on others.

The US Postal Service is under the thumb of the political process. They are mandated for certain deliveries, are required to maintain offices that cannot be profitable, etc. They also have operating policies that are politically driven.

On the other hand, the public option for health care insurance could be saddled with requirements the private insurers may not be required to meet.

Public and private are two different animals.

As a senior, I have both public (Medicare) and private (Medicare supplement and Medicare Part D) health care. There is one premium for all citizens for Medicare Part B, but different prices for the same policy coverage for Medicare supplement, and different coverage with different prices for Part D (prescription drugs). Medicare loses money and has to be subsidized by the government, in large part because there are no premiums for the original Medicare. The private companies presumably make a profit. But again, an apples-to-oranges comparison.

Evan McKenzie said...

Obama chose this analogy, and it is a bad one for the reasons noted in the comments. It is also dumb because he's extolling the superiority of private corporations over government-sponsored enterprises. How is that an argument for creating yet another government-sponsored enterprise? But it is revealing, because he was talking without a prepared text for a change, and it shows once again the shallowness of Obama's understanding of his own policy proposals. He has all sorts of big ideas, but once he has to talk off his teleprompter you see he hasn't given much thought to how it will really work. But what would you expect from somebody who never distinguished himself in either the Illinois legislature or the US Senate? He is just a great front man who has no depth in any policy area except race relations, which is his one big obsession.

berkshire said...

In my opinion health care plan is currently mix both Private and publicly. thats good but post office having always some problem...