Mr. Smith (FedEx), tear down this website …

Posted by on Jul 30th, 2009 and filed under Congress, Economy, Regulation. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry from your site

I’ve been on record as opposing federal bailouts of failing businesses because they waste taxpayer money, reward businesses that are poorly run, and because they are well outside the proper role of our constitutionally limited government. So when FedEx claimed that UPS was seeking a government bailout, I was prepared to jump all over another wasteful government program. But after I looked into FedEx’s claims, I realized that FedEx was not telling the truth. UPS was not seeking any taxpayer funds — only modest regulatory reform that would insure equal treatment of both companies.

Interestingly, I also learned that FedEx lobbied hard for federal assistance funds after 9-11, something UPS did not do. So in addition to being dishonest, FedEx is also hypocritical.

Here’s the truth. FedEx started a disinformation campaign called “Brown Bailout” ( to capitalize on public sentiment that is angry that hundreds of billions of dollars have been wasted in the name of bailouts. But UPS is not seeking even one dime of taxpayer money. UPS only wants regulatory reform so that both companies play by the same rules.

UPS is governed by one set of rules because it was founded over 100 years ago and was at that time primarily a trucking company. FedEx which was founded about 30 years ago began primarily as an airline. Overtime, the two companies have provided more and more similar services. They both have large fleets of planes and trucks to provide shipping and delivery services. But they are regulated in very different ways and the most onerous and heavy burdens are placed on UPS while FedEx has lighter less demanding rules.

FedEx naturally likes this unequal treatment because it favors them. It is like running in the 100 meter race in the Olympics and having the officials require that you wear heavy combat boots while your competition is allowed to wear lightweight racing shoes.

What FedEx falsely and disingenuously labels a bailout is merely UPS asking that the government treat both competitors the same. This is not a bailout. For FedEx to say otherwise is a cynical political ploy and it is a lie. A bailout is when the government gives money to failing businesses to prop them up in hopes that they will become viable. UPS is not seeking, nor will it receive any taxpayer money as a result of this regulatory reform. Additionally, UPS is not a failing company. It is doing quite well despite having to compete with FedEx while wearing proverbial combat boots.

So the question is why is FedEx lying? Because there is profit in it for them. They hope to keep their competitors running in heavy boots while they run in lightweight racing shoes.

FedEx’s founder and CEO, Frederick W. Smith, should be ashamed of himself and his company. This is a cheap and dishonest stunt. Conservatives and anyone else who opposes wasteful government bailouts should be offended that FedEx and Mr. Smith have tried to deceive us and trick us into supporting their anti-competitive and anti-reform agenda.

Here is the bottom line — there is no reason for two companies that provide similar services and compete with each other to be regulated in very different ways. Fairness demands that both companies have to run the same race under the same rules. That FedEx opposes this reasonable position is bad enough, but that they have lied about it and tried to label simple regulatory reform as if it were some sort of cash bailout is even worse.

Mr. Smith and FedEx should take down the deceitful website and stop lying to the public and to legislators. To paraphrase the words of Ronald Reagan, “Mr. Smith, tear down this website.”

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