Free Market Bush?

The WashPost reports that the Bush administration is telling the airlines to make money on their own. However, that's not to say that Bush is being overly free-market friendly. He just wants a smaller bailout than Congress does. From the Post:

"The administration does not oppose assistance for the airlines, but clearly given the factors that have affected the airlines -- such as fuel oil and the limited impact the war has had -- the administration believes that the amount that the Congress is considering now is excessive," Fleischer told reporters at a briefing.

According to one source, the prez may be good for $900 million, but Congress wants to shell out as much as $3.5 billion in emergency aid to the airlines; it also wants to tie such largess to capping airline exec compensation. This stuff should go up for a vote next week.

Comments

[Anonymous]

Would any entrepenuer want to start a business in the airline industry? Hell no! The problem is that the market has stagnated and the airlines that exist get so much from the governement that it would be impossible for an entrepenuer with a better business model to compete with them.

[joe]

Regulation and subsidization of the airlines is inevitable, as with all transportation systems. You think Ford paid for I-95? You think Delta built Logan Airport? Without government investment and regulation of air travel, it would barely exist, and the "real" economy would be smaller as a result.

The conversation we need to be having isn't about whether the subsidize transportation, but how. This bailout would do nothing except prevent the attrition of excess capacity, which would just cause the same problem down the road. I saw our transportation dollars would be better spend on high speed rail in appropriate corridors.

[Yet Another Steve]

Oh yeah, high speed rail. That's a plan (although it would be a bit tougher to hijack a train and fly it into the Pentagon).

Instead of thinking in terms of "our transportation dollars" maybe it would make sense for ME to spend MY money on how I wanted to get from point A to point B and for everyone else to spend THEIR money how they wanted. Just because we've subsidized all that stuff in the past doesn't mean we have to keep doing it.

[Eric Hanneken]

"Without government investment and regulation of air travel, it would barely exist . . ."

Joe, why do you say that?

[Brian]

Joe:

Without government "investment", air travel wouldn't exist?

Let's try it and see if you're right.

[Eric Hanneken]

So I guess the airlines are going to get bailed out again. No doubt some people will still tell us that the free market has failed air travelers, and demand re-regulation of the industry.

[Grant Gould]

The dems can't let the airlines die, because they have huge-ass unions. The repubs can't let the airlines die, because then they would have to talk seriously about contentious and potentially unpopular issues of regulation and policy. Ergo, the airlines will be bailed out and the rest of us will be wondering, "is this choice between delightful alternatives the democracy of which we are supposedly a beacon to the world?"

Alarmingly, Bush seems to be taking something like a principled stand here. I'm impressed, but it won't last. They'll compromise on $2.5b and a judicial nominee to be named later.
--G

[Gary Gunnels]

Grant Gould,

Principled stand? I think you should go with your second instinct, especially if airline troubles imperils say the voters of some swing state. 🙂

[The Mountain Goat]

How can we discuss free markets in the same sentence as one of the most heavily regulated industries? Security is federal, Air Traffic Control is federal, most airports are government.

Airlines are hurting precisely because air travel is down. The government has made sure that we passengers are unarmed victims, fearful of terrorists, while it is overseas creating enemies faster than we can kill them. TSA is dragging its feet on armed pilots.

Instead of a bailout, the government should remove regulation. Let the free market work in security, in takeoff and landing slots. But the airlines can't stay afloat with this economic drag imposed by government action.

[Lefty]

I'm reminded of an old Tom Paxton song.

I am changing my name to Chrysler
I am going down to Washington D.C.
I will tell some power broker
What they did for Iacocca
Will be perfectly acceptable to me.

[Brian]

The government can't let any of the airlines fail...if the volume of air travel were to fall significantly and permanently (and I suspect that it would), hundreds, maybe thousands of ATC's and TSA workers would no longer be neccessary. We can't let government employees be affected by such fickle forces as the market...they've got pensions to earn!!!

[Hank]

Zeppelins... Zeppelins! Screw these sky buses.

[Tom Hynes]

WSJ column mentioned yesterday that total stock market value of 5 biggest airlines was $3 billion, the same number as the bailout.

[Waite Julie Piper]

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DATE: 01/20/2004 12:14:30
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