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Points to ponder, Part 3
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Some time ago I started what is planned as an occasional change in format. There are always a number of issues floating around which raise important questions but which can be dealt with in less than a full column. So I thought I would try occasionally to capture a few of these “points to ponder” and explore the issues they raise to see if they strike a responsive chord.

The postal service plans to raise the cost of a first-class stamp by 2 cents. Many years ago I joined a major U.S. corporation. One of my key responsibilities covered corporate-wide strategic planning.

As timing would have it, the day I joined was the day that the first of the group vice presidents was scheduled to present his plan to the board. His group had serious financial problems and had been losing increasing sums of money with each passing year. His job was on the line. I was enthralled and impressed by the data he had at his command and the coherence of his analysis as he made the convincing argument that his main challenge was due to cheap imports from abroad. Each time foreign competitors cut prices, his volume plummeted and his losses soared.

I thought to myself, with people this rational, my new job would be both a pleasure and a cinch -- until I heard the wrap-up. To make up for the losses, he proposed a price increase! As the board nodded in assent, I started to get some inkling of the magnitude of the task I faced.
The concept of “price elasticity” is a measure of the percentage change in demand that occurs due to a percentage change in price. A product that is price inelastic shows little change in demand as the price goes up (usually within limits). One that is highly elastic shows big changes. It was clear in the above example (although not to many in the audience) that the products in question were highly elastic, and that any significant increase in price would make the problem worse. That’s exactly what happened.

Today, the postal service is under attack from several sources. The Internet has spawned a large number of inexpensive communication alternatives. Service levels have been cut or have deteriorated. (Recently, letters between Arizona and Georgia have taken more than 15 days in transit -- substantially more than the eight to 10 days it would have taken the post office to deliver mail an equivalent distance, from Saint Joseph, Mo., to Sacramento, Calif., in 1860 via pony express).

Private companies compete, often at higher prices, but normally offering better service. During the period from 2002-07, the post office handled annually between 95 and 98 billion pieces of first-class mail. In 2008 and 2009, the totals dropped to 92 and 84 billion respectively. Based upon the first half of the year, it looks like 2010 will be under 80 billion. Similarly, standard mail which had actually been growing during the 2002-07 period, peaked at 103 billion pieces in 2007, dropped to 99 billion in 2008 and then to 83 billion in 2009. It too will likely fall below 80 billion based upon first half 2010 results. Interestingly, 2007 was the year that the first-class rates climbed above the 40 cent level.

Raising rates is the simple (perhaps “simple-minded” is a better phrase) way to treat the problem. But it’s no solution. To the contrary, it is only likely to hasten the demise of this once-revered organization that played such a significant role in this nation’s growth. The solution has to rest with developing new and creative ways to facilitate communication. Perhaps a contest to stimulate new ideas from the public would help. But increasing prices and deteriorating service seems to be a formula for disaster. Any ideas for making it better?

Arizona’s new immigration law. Much has already been said about Arizona’s about-to-be implemented new immigration law. But there are still some things that puzzle me.

First, there is genuine concern that some officials could misinterpret and misuse it with regard to racial profiling. But something needs to be recognized that seems to get lost in the political morass that always surrounds such issues.

Current estimates indicate that more than 2/3 of illegals nationally, and more than 80 percent of illegals in Arizona, come from Latin America. Absent any element of racial discrimination, it seems likely that the largest number of people who raise suspicion and are stopped for questioning will be Latinos. Would it not be unusual if it were otherwise?

Second, it would seem that efforts of the administration to thwart the law are based upon a careful political calculation. MSNBC, which is no supporter of the law, conducted a poll. It’s hard to get current data. “Conspiracy theorists” would say it is being withheld because the results do not support MSNBC’s position. However, earlier figures, with several million “votes” counted show a 95 percent support rate for the law. A recent national Pew study poll showed 59 percent supporting the law, with 32 percent opposed, and on specific questions relating to implementation (e.g. requiring people to show ID) as much as 73 percent were supportive. So it would seem that the general public is in support -- but the general public consists of many polarized factions who will probably vote for their party no matter what. Is this, then, a play to court one specific group -- a group whose votes may be desperately needed during the next election? How will we ever move what is for the good of the nation in front of political expediency?

Finally, the federal government has challenged the law’s constitutionality. The reasoning seems a bit fuzzy. There is a claim that a state cannot formulate its own immigration policy or enforce state laws that interfere with federal law enforcement (including requiring federal authorities to divert resources from other activities), or restrict interstate commerce (read that as the flow of illegal aliens). But when did the government become an entity solely of its own? In essence, it is (or should be) an instrument of the people. Just as a citizen can perform a citizen’s arrest, should not a state be entitled to help enforce (not create) existing federal law? And particularly if the non-enforcement of that law is creating severe local hardships? There is a principle which to me makes sense -- if the law is just, enforce it; if not, get rid of it. But just like the “don’t ask, don’t tell” solutions that have been around for some time, many politicians lack the integrity to face difficult issues -- another reason for Congressional reform (but that for another day).

Appreciate your reactions as you ponder the points above.

Dr. Melvyn Copen lives in both Georgia and Arizona. He is an educator and businessman who has worked and lived in many foreign countries and provides consulting services throughout the world. His column appears every other Wednesday. Please share your comments with him via email at melcopen@hotmail.com.