Sunday, May 11, 2008

And You Thought Gasoline Prices Were High? The U.S. Postal Monopoly Has Its Privileges

Unconscionably Excessive Stamp Prices?
Over the last 89 years, the average retail price of gasoline has increased almost 14X, from 25.5 cents per gallon in 1919 to $3.517 per gallon in 2008, according to annual price data from the EIA. Over the same period, the price of a first-class stamp in the U.S. has increased 21X, from 2 cents in 1919 to 42 cents in 2008 (starting Monday, May 12), according to historical stamp price data available here. The chart above compares the two prices using an index that is equal to 100 in 1919 for both series.

If stamp prices had increased over time at "only" the rate of gas prices, a first-class stamp would only cost only 27.6 cents today instead of 42 cents.

When gas prices rose last year, Rep. Bart Stupak (D.-MI) introduced "The Federal Price Gouging Prevention Act," which would make it a crime to "sell crude oil or gasoline at a price that is unconscionably excessive." Shouldn't we now investigate "unconscionably excessive stamp prices"?
Monopoly has its privileges.

12 Comments:

At 5/11/2008 6:30 PM, Blogger Jack McHugh said...

Gee, I hope it's not stamps that are the LEADING indicator here . . .

 
At 5/11/2008 8:47 PM, Anonymous Anonymous said...

There are no private carrier that can ever deliver a one ounce package from one end of the country to the other for 42 cents. You can deregulate this and the first class stamp will go up 600% overnight.

 
At 5/11/2008 10:33 PM, OpenID sethstorm said...

I have no issue with the anti-gouging act. Given the actions of OPEC and speculators, inescapable legislation is in order.

The USPS is a bad example due to being an entity easily avoided. The issue with gasoline is that it is not so avoidable in the US. The practical alternatives do not always exist.

Further, making prices look good by comparing to Europe is comparing 2 vastly different systems. Transportation is built up far differently over there compared to here.

 
At 5/12/2008 9:33 AM, Anonymous Anonymous said...

CD: It would be good to understand the institutional arrangements that govern US postal rates before leaping to conclusions. The US Postal service was long subsidized from general funds, the taxpayers share up to 50% at one time. Legislation which took effect in 1971 mandated that the Postal service become self-aupporting, a target reached in 1982 (see "The United States Postal Service: An American History 1775-2006";pdf. Further, I understand, but haven't had time to verify, that the Congress mandates low third class rates, forcing the Postal Service to make first class patrons subsidize junk mail. Perhaps Carpe Diem, rather than simply assuming that the Postal Service is an unregulated monopoly, were to celebrate the move to full cost pricing for first class users, and criticize the need for higher first class rates so as to subsidize third class mail.

 
At 5/12/2008 4:23 PM, Blogger OBloodyHell said...

> There are no private carrier that can ever deliver a one ounce package from one end of the country to the other for 42 cents. You can deregulate this and the first class stamp will go up 600% overnight.

So it'll cost $2.48 (yes, *I* can do math) -- about half of what FedEx charges for next day service? LOL. At least they'll deliver it to my door, not to some friggin' neighborhood box they built a block away.

Only an organization like the USPS could actually make the bald-faced ridiculous claim that "increased volume demanded an increased price". Yes, they actually claimed that was one of the reasons for increasing the price of postage one time.

The USPS has spent hundreds of billions on the Holy Grail of handwriting recognition, while ignoring the possibilities inherent in a highly stable technology over 35 years old -- i.e., bar codes.

An automated mail processing facility, such as someone like FedEx would build, would require two humans to touch any piece of mail -- the guy taking it out of the postbox and the guy putting it into your mailbox -- by offering a 75% discount over current mail rates for anyone sending mail meeting certain basic criteria (Say, 2-5 standard sized envelopes, bar coded address data).

Unlike the USPS, they'd also probably allow people to opt-out of unsolicited "junk" mail addressed to "recipient" and the like. SPAM -- mmmm-mmmh, give me more of that!


*Idiot*.


> I have no issue with the anti-gouging act. Given the actions of OPEC and speculators, inescapable legislation is in order.

Then you are a moron studying to be an idiot. If you have seen anything else here on CD, the government could lower gas prices by 2.7 cents for each penny the oil companies gave up in "rampant profits"... and there would be less oil development in the latter case, unlike the government, which is too busy funding busybodies instead of spending time to actually free up oil resources (ANWR, GoMexico offshore), or to streamline laws regarding new refinery development -- both of which might actually have a positive effect on oil prices, unlike adding more TAXES onto a system people are already screaming about the price of.

 
At 5/13/2008 2:21 PM, Anonymous Greener Pastures said...

I think the post office is a good deal right now- too bad they need all that junk mail to keep the prices down. Maybe we should pay them for not delivering junk mail.

Oil companies make me sick.



Lisa

 
At 5/13/2008 9:08 PM, Blogger OBloodyHell said...

> Oil companies make me sick.

Then take some Pepto-Bismoll. Oil companies do far more for you per dollar in profit than the State does with $2.60 for every dollar of profit that the oil companies are making.

Get a clue -- the government takes more out of your pocket -- every day and in many ways, hidden and unhidden -- than the oil companies do -- and gives you far, far less in return.

 
At 5/23/2008 3:07 PM, Anonymous Anonymous said...

Private mail carriers would not only sell stamps, they would also sell envelopes, with advertising on the envelopes, thus reducing the cost to the user.

 
At 5/24/2008 5:49 PM, Anonymous Anonymous said...

"There are no private carrier that can ever deliver a one ounce package from one end of the country to the other for 42 cents. You can deregulate this and the first class stamp will go up 600% overnight."

This is pure speculation. In fact, there is more evidence to support the other view; that the price and quality of service would be better in the private sector.

Why else would the government pass laws forbidding competition on most first class mail and setting price floors where competition is allowed?

 
At 6/20/2008 12:28 PM, Anonymous Anonymous said...

"Why else would the government pass laws forbidding competition on most first class mail and setting price floors where competition is allowed?"

Because the uniform pricing for first class mail contains cross-subsidies for residents in far-flung places. Free market pricing would make that letter to the middle of nowhere much more expensive than a letter to a transport hub.

If one wants to maintain uniform pricing, some form of regulation is needed. Otherwise places with costs higher than stamp revenue would not be serviced at all. And the higher the gas prices, the fewer places would get their mail :)

 
At 6/28/2008 3:51 PM, Blogger Shadow said...

The fact that I only lick about 2 stamps worth of mail a year, makes me indifferent to it.

 
At 8/22/2008 1:48 AM, Anonymous Anonymous said...

I love arm chair Postal experts like obloodyhell. The reason fees go up with volume is because airlines and trucking companies charge more as the weight goes up. USPS uses private industry to transport mail. Also the postal service has used barcodes for years along with ID tags (barcodes on the back of letters) Where have you been? You said USPS spent hundreds of BILLIONS on hand writing recognition. You do the math dork. I dought that figure. But whatever they spent is worth it because their equipment is in the high 90% read rate area. It is amusing that you don't say that UPS and Fedex raise their rates as fuel prices go up and never advertise this. USPS can only charge what the board of govenors allows. Try doing some home work before opening your mouth and showing that YOU are the IDIOT.

 

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