At today’s sham “town hall” on health care Obama tried to make an analogy about how the private sector can compete successfully against the public sector:

“If you think about it, UPS and FedEx are doing just fine. It’s the Post Office that’s always having problems.”

But a Wall Street Journal blogger who was live-blogging the event made this Economics 101 point that Obama missed, his Ivy League education notwithstanding:

This is classic. 1. the post office has a monopoly on first class mail. there is NO competition. 2. they lose gobs and gobs of money and are only kept around because they have a big union and a government balance sheet (our grandkids) to offset those mega-losses. 3. they are able to compete against Fedex and UPS because they can afford to operate at mega-losses.

His response was dumb from an economic sense, but is doubly dumb as an agrument for government-run health care: “Look, the post office is always in trouble, so let’s apply that approach to 1/5 of the American economy.”

Here’s the wonderful moment: