Could You Run This Business?
By Dave Hitt on Nov 21, 2010 in Bad Business, Yeah - That'll Work
Imagine that you had a business with the following business model:
- The business has been in existence for over 200 years.
- Your logo and brand name is instantly recognized by approximately 100% of the people in the United States.
- You have a customer base of over a quarter of a billion people. Nearly all of them use your service several times a week. Many use it every business day.
- Millions of business are completely dependent on your services – they couldn’t exist without them.
- Federal law prohibits anyone from opening a competing business offering your primary service.
- Most of your buildings are paid for. All of them are free of any property tax.
- The pension fund for your employees is handled by a different agency, so it doesn’t affect your bottom line.
Think you could run a business with that model and make a profit? Think a well trained chimp could run a business with that model and make a profit? Most likely. But the government can’t. The Post Office lost $8.5 billion dollars this year. That’s $4.7 billion more than last year’s shortfall.
This is the same government that intends to take over health care. They’ll do a much better job with that, because, well, because some people imagine they can.
Yeah, that’ll work.
How??
Johnny Virgil | Nov 21, 2010 | Reply
In Europe, we have meta-government. It’s the size of a mid-sized city (it has as much public servants as a city has) and the bosses are politicians that were too good for their country. It is called the European Union.
They make laws about this stuff: they ordered that state monopolies are no longer allowed. So monopoly of thenational post service on letters < 50 grams (1.8 ounce) went away last year. This year they are firing 15.000 people.
This would have been political suicide only a few years ago, but now the national government can hide behind the EU.
The EU kicks ass. Literally. They fined both Microsoft and Intel a billion dollars.
Theoretically the Feds should play the same role to the states as the EU does to nations. I'm sorry for the US it didn't work out that way.
Eur van Andel | Nov 21, 2010 | Reply
@Eur van Andel – I live in the US, and I am not sorry that it did not work out that way. The people that established our government set it up in a way that would not allow this kind of invasive intrusion by the federal government. The feds seems to be forgetting this as of late, but the fact remains – they are not allowed to tell the states what to do. That the feds are attempting to exercise so much undue power is one of the chief reason that we are having the issues that we are having right now. They cannot balance a budget. They cannot run a business. They should not run my healthcare.
Reform WAS and still IS needed in the health insurance industry; government takeover was not needed. I can only hope that some sort of modification or repeal of the current healthcare law takes place.
Bill Nalesnik | Nov 22, 2010 | Reply
I was beginning to think it was Crayola or something.
Laura Ross | Nov 30, 2010 | Reply
Governments aren’t businesses. They don’t exist to make a profit. They SHOULDN’T make a profit. They exist to provide essential services to their populations. The reason the post office is losing money is because it is outliving its usefulness, not because it somehow became less efficient than it was. There is still a need for it (Netflix anyone?), but eventually it’s going to become as pointless as a Federal Stagecoach Safey Administration.
I find it hillarious that the GOP and the tea party (and I’m not conflating the GOP with libertarians, I know Ron Paul regularly attacks military spending), who claims to be so upset over government waste, refuses to even tackle the most inefficent, wasteful government program on the federal budget: the military. Does anybody honestly think we STILL need bases in countries we haven’t been at war with in over half a century?
I think it’s a myth that there is one, single economic theory that works in every situation. The fact is that if you have corrupt, incompetent jerks running your government, it’s going to fail regardless of whether it’s communist or capitalist. Somalia is a perfect example of a completely free-market capitalist system, and most of the people are freaking dirt poor, miserable, and the place is run by AK-47-touting militia fanatics. Is this proof that the capitalist system can’t work ANYWHERE in ANY situation? No! It’s not working because the place is run and has been run by corrupt, incompetent jerks.
Brian | Dec 3, 2010 | Reply
NZ Post in New Zealand, is a State owned enterprise that runs the postal service and makes a profit. It operates a number of Post Shops that are privately owned franchises that provide the full range of postal services. It also has a banking division, Kiwibank that operates out of the Postshops and competes successfuly with the major Australian owned banks that operate in New Zealand. There is no reason why a government owned business can’t be run profitably. What is needed is that the Government take a hands off approach and allow it to be run for profit.
Mark.V. | Dec 13, 2010 | Reply
If the government makes or loses more than one dollar, it figured wrong.
brS | Dec 18, 2010 | Reply