Wednesday, August 12, 2009

Obama's UPS and Fedex Argument

This is an attempt to answer the "you can't compete against the government" type of argument that I gave the other day.

Not only does it not answer the version of the argument I was giving, it actually supports my case.

My argument was that, because government bureaus have the power to tax, they will have a larger share of the market than they deserve in efficiency terms, and that this is bad because it results in the service being inefficiently provided overall.

First, these three companies must be comparable in terms of quality of service and cost to consumer, or one of them would be out of business. But the PO needs periodic subsidies from the government (the "trouble" Obama says the PO is always having) in order to compete at all. So it is an inefficient provider, compared to the other two.

Does it have the tiny market share that that an inefficient provider deserves? Of course not. In my village, the PO has its own building, and customers are always there. Fedex and UPS share a part of the local box 'n' ship store, and when I go in no one is ever there.Obviously, there is colossal waste going on here. Quid erat demonstrandum.

Further, if ObamaCorp had a market share similar to that of the PO, it would be truly gigantic. Its creation would represent a change in America of staggering proportions. The town hall demonstrators are right to be yelling.

Obama keeps saying we need ObamaCorp to "keep them [ie., the over 3,000 private medical insurance companies] honest." But in his example it obviously is the two private companies that keep the government delivery service honest, not the other way around!
Here is Lew Rockwell's take on "Obama's slip/gaffe/admission."
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