03/18/2010 05:12 am ET Updated May 25, 2011

The Public Option

I decided to write a letter to an old friend from Crabapple Cove, Maine. With almost anybody else, I would send an email, but he's a geezer whom I am fairly certain is computer illiterate. So I hand-wrote a three page letter, and I considered how to send it. For convenience, I wanted to ensure the letter would be personally delivered to his house. And to have the letter picked up at mine.

I called Fedex and asked them what it would cost to send a letter from my house in Phoenix to Crabapple Cove, Maine that would get there sometime in the next few days. Cost: $7.36 plus $2.97 to have the letter picked up. Total charge, a little over $10.

A bit pricey, I thought. But believing in the power of competition, I next called UPS. They might, after all, be a little cheaper than the "absolutely, positively" people. They also drive around in ugly brown trucks and obviously never spent the money Fedex did developing a spiffy logo. I posed the same question to UPS. The response: $13.20, plus another $4.16 for a pickup at my house. Total: over $17.

What of the "public option?" I had heard a lot about how private industry does everything better than the government, and how they couldn't much be trusted to do anything. I nevertheless called the U.S. Post Office and posed them the same question. The response: 44 cents -- and no charge for a personal pickup at my house.

So, the inefficient, bloated, generally good-for-nothing government-run public option: wanted to charge me 44 cents. And the presumably efficient, competitive, private-sector options: over $10+ and $17+.

This public option looks pretty good.

Fedex and UPS are fine companies. As private corporations, their goal is to maximize revenue for their shareholders. They actually do some things better and are occasionally even cheaper than the post office. But, because their raison d'etre is maximizing net revenue, they have no interest whatsoever in doing anything for 44 cents.

The Post Office, as a public entity, has a different objective: to provide an essential service to the public at the lowest possible cost. So they are willing to deliver a document door-to-door 3,000 miles in two or three days for 44 cents. And they are mandated not to require a government subsidy. All this despite the fact that email and the internet has caused the amount of first class mail running through the United States Post Office to decline every year. Pretty tough business conditions. And yet, they have kept their costs amazingly low -- without a government subsidy. While they have been the butt of many jokes over the years, some even deserved, they have been able to innovate, mechanize, and streamline their operations to maintain costs, even in the face of an inevitably declining volume. I think, in part, because the serving the public good, rather than maximizing their profits, is their primary core value.