Dear Comrades,
At one time, people in India had to get on a waiting list to buy
Hindustan Motors’ Ambassador automobile, even though it was an obvious
copy of Britain’s Morris Oxford of some decades earlier. The reason was
simple: the Indian government would not allow cars to be imported to
compete with it.
It was notorious for poor finish and poor
handling. But, since it was the only game in town – and “town” was all
of India, people were on waiting lists for it for months, and sometimes
even years.
Toward the end of the 20th century, India began
to loosen up some of its jungle of rules and regulations that were
strangling India’s businesses. Though India is still a long way from a
free market, just the relaxing of some of its economic restrictions was
enough to promote a higher rate of growth and a substantial reduction in
poverty.
They even allowed a Japanese car maker to build cars in
India. This resulted in a car called the Maruti, which quickly shot to
the top as the most popular car in India. Even more remarkable, it led
to some improvements in the Ambassador. A British newspaper said that
the Ambassador now had “perceptible acceleration.”
Now that there was competition, the distinguished British magazine “The Economist” announced, “Marutis too are improving, in anticipation of the next invaders.”
Perhaps
the last chapter in the story of the Ambassador has now been written.
Hindustan Motors recently announced that it was closing – indefinitely –
the factory where the Ambassador was built.
According to the Wall
Street Journal, “The company cited low productivity, ‘a critical
shortage of funds’ and a lack of demand for its core product, the
Ambassador.”
Doesn’t that sound a little like our post office?
Our
post office, like the Hindustan Ambassador, has had a long run as a
government-protected monopoly. But just a partial erosion of that
monopoly, with the appearance of United Parcel Service and Federal
Express, has threatened the viability of the post office.
As for
“a critical shortage of funds,” that has truly gotten critical as the
post office has seen its $15 billion line of credit at the U.S. Treasury
shrink to the vanishing point. For years that line of credit allowed
the post office’s defenders to tell the big lie that it got no subsidy
and was costing the taxpayers nothing.
I don’t know who they
thought put that money in the Treasury that the post office has been
“borrowing” all these years, with no one foolish enough to think that
they would ever be either willing or able to pay it back.
We could
all use a line of credit from which we could get a few billion dollars,
here and there, to cover our losses from time to time. But we are not
all the post office.
Ironically, India has partially privatized
its post office by letting private companies deliver mail. The
government post office’s deliveries of mail dropped from 16 billion to
less than 8 billion in just six years, even though the population of
India was growing.
You can always keep anything old, clunky and
inefficient still in business, if you are willing to pour unlimited
amounts of the taxpayers’ money down a bottomless pit.
Hindustan
Motors had to shut their doors when they ran out of money. How long will
we continue to keep our own version of the Hindustan Ambassador on life
support at the expense of the taxpayers, and of captive customers who
are not even allowed by law to decide who can put mail in the boxes that
the customers bought?
http://missoulian.com/
