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From: muffy@remarque.berkeley.edu (Muffy Barkocy)
Subject: Re: Idea to help curb unwanted junk mail
In-Reply-To: olsen@xn.ll.mit.edu's message of 14 Jun 91 16: 32:29 GMT
Message-ID: <MUFFY.91Jun16144401@remarque.berkeley.edu>
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References: <14713.28453476@fidogate.FIDONET.ORG>
	<1991Jun12.224050.9098@midway.uchicago.edu>
	<1991Jun13.042624.17037@athena.cs.uga.edu>
	<1991Jun14.163229.13916@xn.ll.mit.edu>
Date: Sun, 16 Jun 1991 22:44:01 GMT
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In article <1991Jun14.163229.13916@xn.ll.mit.edu> olsen@xn.ll.mit.edu writes:
   >>I read that the PO is required to set prices so that each class of
   >>mail breaks even.

   >Before that requirement was imposed by Congress, first class mail was
   >actually subsidizing junk mail!  Or so I'm told.

   What I read is that first-class mail (the PO's monopoly) has subsidized
   the other classes for quite some time, and continues to do so.  The
   law used to require each class to break even, but the PO routinely
   ignored this requirement.  When someone took them to court in order
   to force them to comply, they got Congress to change the law, removing
   the requirement (or, actually, making it unenforceable).

   This actually makes sense, from the PO's (and postal union's) point of
   view.  If you have a legally-mandated monopoly, you should squeeze
   every last penny you can out of it, even if you have to juggle the
   books to do so.

I don't understand this, though.  If the postal service is taking money
they *make* on first class mail and *spending* it on junk mail, how are
they squeezing more money out of the monopoly?  I would think that it
would make more sense for them to *try* to break even on the junk mail,
and then they would get all the money they made on the first class mail.

On the other hand, if the point is that they're not supposed to make a
profit at all, then I can't see how any amount of juggling will let them
"squeeze more money out," since they can't keep any of it anyway.

Can someone explain whether they're supposed to make a profit, what they
do with any money they make, and how it benefits them to spend some of
the money they make on subsidizing junk mail?

Muffy