Form a blue ribbon commission to increase regulations and recommend other solutions to “fix” that struggling industry. I have an exam and a quiz to write right now, but this article is a goldmine of economic stupidity. Par for the course these days.
Airlines are offering the fewest seats to passengers, measured by available seats and distance traveled, in more than a decade. They have shed more than 158,000 full-time jobs since employment peaked in 2001 and lost an estimated $33 billion over the past decade. Thirteen airlines have filed for bankruptcy in the past two years.
So fewer people want to fly at existing prices and flying conditions. The “solution” to this problem is to continue letting the industry shrink. And in this bizarre world we live in, that is no longer acceptable. And people think that inefficient and wasteful government programs have a snowball’s chance in hell at being eliminated? We can’t even let “free market” firms die. The Administration’s solution to this “problem” is: “we need to have an open and frank conversation.” Really? Why the Transportation Department needs to have such a conversation is news to me. How about the shareholders and workers of the affected firms figure out ways to serve their customers better or make the decision to exit – just as many typewriter firms did?
The Administration’s other “solution” … “We can’t keep doing things the exact same way and expect a better outcome,” Wytkind said, adding that new regulation probably should be considered. Yep, every “problem” can be remedied by more regulation from the idiots that cause most of the problems in the first place. Are the words profits and loss the equivalent of the swine flu virus to the wunderkinds in DC? Talk about partisan ideological hacks.
While airline deregulation has been regarded as a success for consumers, other trends have raised concerns about whether airlines are offsetting low fares at the expense of safety.
A report last year by a government watchdog said nine large U.S. airlines farm out 70 percent of major maintenance. Overseas repair shops handled one-quarter of the work, challenging the ability of U.S. inspectors to determine whether it is done properly, the report said.
Major airlines have also farmed out short-haul trips to regional carriers, which now account for half of all domestic flights. Regional airlines often hire pilots with significantly less experience and pay lower wages than major airlines. Both issues have been raised in the National Transportation Safety Board’s investigation of the crash of Continental Connection Flight 3407, which crashed near Buffalo, N.Y., in February, killing 50 people. The flight was operated for Continental by regional carrier Colgan Air Inc. of Manassas, Va.
“A safe, secure, stable industry can’t be driven by lowest common denominator,” said John Prater, president of the Air Line Pilots Association. “The cheapest fare out there will not give us a transportation system that works for everyone.”
So the solution is to eliminate all cheap fares and not leave us with choices. The United States Federal Aviation Administration and various other safety authorities cannot possibly do a complete examination of every plane, every pilot, every technician and every flight attendant before each plane departs for a trip. Nonetheless, airplane accidents, injuries and mishaps are very rare, even though dozens of people are involved in the process of getting our flight executed safely. Why then, when we settle into that window seat for a flight home on Southwest Airlines do we seem to not worry about the pilots veering off course, the food poisoning us, and the wings falling off the plane? After all, an individual customer would never know what has happened to the plane and its staff before he got on board.
There are feedback loops in a market economy that exist to ensure that Southwest, Delta, United, etc. performs its tasks well. If these private organizations fail, there are consequences of failing (losing money, going out of business, being taken to court), so they try to hire honest people and careful people and clean people, it fires people who steal or are not careful or are not clean, and it honors and rewards those who do the job well. These feedback loops are absent or muted when property is not owned privately, and certainly muted when the heavy hand of the Administration comes along.
Firms work hard to keep their reputation in tact. Will a case of food poising happen now and again? Will a plane malfunction from time to time. Certainly, no human institution can eliminate all risks, but the competition that protects customers in an open-market process does an impressive job considering that no one is in control of it. Yet the czars in DC beg to differ. Someone ask them why their coffee does not poison them although much of that process is “farmed out” to other people. Heck, the beans are grown on the other side of the globe. What is different about airplanes? Nothing, except that Wesley Mouch sits on the board of many of those companies – and that they are a big, fat, shiny, visible target to use to mislead Americans about what “problems” exist.
And by the way, notice again the utter contemp and paternalism this Administration shows toward consumers. (remember the tire tariffs?) So what if they arae saving thousands of dollars on air travel? So what if they like to have the choice to fly low cost carriers? And are these consumers not conscious enough of their own well being to think about the safety of various carriers before making their flight choices? They do not need to research the safety record and practices of every firm – bonus points for a student that can tell us why. After all, no one does it for even 5% of the products they consume. What is different about airplanes? Nothing. At all.
Take stock for a moment and ask what the common thread is among most of the struggling industries in America today? Financial services. Auto manufacturing. Medical care delivery. Post office service. Public schooling. State budgets. What is common here? It is too obvious to put down I would think.