Obama's Failed FedEx Analogy

In their coverage of Obama's town hall meeting on health insurance reform today, CNN.com says:

Obama defended his call for a government-funded public health insurance option to compete against private insurers. He said such an option would hold down rates, rejecting accusations that it amounted to a government takeover of health care because private companies can't compete with a government-funded plan.

"UPS and FedEx are doing just fine," Obama said, referring to private courier services that compete with the U.S. Postal Service. "It's the Post Office that's always having problems."

However, UPS and FedEx do not compete with the Post Office in their main business of regular mail. In fact, UPS and FedEx are prohibited by law from competing in non-overnight mail. The reason nobody is allowed to compete with the Post Office is that the government is worried UPS and FedEx would do a much better job. In contrast, the health insurance reform proposes a public option for the specific purpose of competing with private insurers.

Either Obama is not aware of this fact, or he is intentionally distorting the facts. Perhaps I should send an email to the White House?

All Obama is really doing here is reminding everyone of government incompetence, and that the government cannot capably handle your mail without losing tons of money. In fact, in July, "The Government Accountability Office...added the Postal Service to its list of high-risk federal agencies in need of change," according to this AP story. The agency expects to lose $7 billion this year.

Oops.