Good Enough for Iraq, Good Enough for Here?

In an editorial on economic reforms in Iraq, The Washington Times approvingly notes,

Less than five months after the end of major combat operations, Iraq's newly appointed finance minister has announced extensive free-market economic reforms, including "allow[ing] up to 100 percent foreign ownership in all sectors except natural resources."

One question for the Bush administration: Hey, if it's such a good idea in Iraq--and it is--why not here in the good ol' US of A, where such useless restrictions remain in many industries, including the airline industry.

Comments

[Anonymous]

"I would point out that the French just ordered one of their airlines to break its contract to move British troops around in the Mideast, so the "just rent space when you need it" approach is not without its practical problems."

You don't say! Well, subsidizing an entire industry is not without its practical problems. And telling the gov't to rent airplanes doesn't mean that the gov't should expect to rent planes at any price and for any circumstance. Either they can build their own, or they can negotiate with airlines, or they can stop going to war so often.

[nonsmoker]

One time, my wife went to the park to try and relax and rid herself of her migraine headache. She was hoping for nice peace and quiet, nothing more than birds chirping, when a man nearby started playing a guitar. Not liking this type of noise floating over towards her, she wished for him to stop. As she felt her headache worsening and her already high blood pressure rising (which her doctor had warned her to avoid). She went over and asked him to stop. He refused, telling her he had every right to play and if she didn't like it she was free to leave. She left and asked a policman to make him stop. The cop chuckled and said he couldn't. She asked, "don't non-guitar players have rights?" and he laughed and told her no. Frustrated, she pulled out a cigarette, but the cop told her she couldn't smoke there. "Why not?" she asked. "Because it might bother people," was the reply.

Several years and a few local elections later, playing musical instruments and anything above a quiet conversation is now illegal in the parks as well as any other public building. She's going after the loud music in bars and nightclubs next.

Tally Ho.
Reap What you Sow.

[Anonymous]

The freedom to dictate what others can do. I get it now. Thanks for clearing that up.

[junyo]

"Either they can build their own, or they can negotiate with airlines, or they can stop going to war so often."

So how exactly to you propose getting all present and future threats to the US to work from a schedule? Or are you saying you're in favor of spending tax dollars on building an aircraft fleet that'll be idle 99.7% of the time? Or that you're in favor of putting the country in a position to be pricegouged during a conflict? Or just that there's never been a just war?

[Brad S]

I consider myself a Libertarian, but at the same time, I recognize that there are some industries where some level of government subsidy makes sense. For example, agriculture. I don't mind subsidizing domestic agriculture because, frankly, I don't want to have to rely on foreign nations for basic food products (i.e. I'd rather not watch American citizens starve because of some whacko fascist dictator who we import food from decides that he doesn't like us). The airline business is another one. So many facets of our economy depend on a reliable transportation infrastructure. It's in all of our best interests (including, yes, the government's) to have a stable, reliable airline industry. In fact, now that I think about it, I suppose one argument against letting foreign airlines into point-to-point U.S. domestic markets is that many foreign nations (France, Italy, etc) subsidize their flagship airline much moreso than the U.S. subsidizes its airlines.

[thoreau]

Brad S-

In a nation as large as the US, with an economy as diverse as ours, I don't see any need to worry about dependence on foreign trade. As long as we have allies, and as long as there are neutral countries, we'd still be able to acquire whatever we need, or at least acquire enough to keep us going while we ramp up domestic production.

Now, maybe a national defense rationale makes sense for smaller countries with fewer resources. Maybe. And maybe, just maybe, it would make sense to subsidize domestic industries if free trade would lead to a single country having a monopoly on some vital product or resource, and even then only if there was no easily available substitute good.

But the US won't starve if a single dictator gets angry. Even if a literal banana republic had a monopoly on, say, bananas, the US could survive if Generalismo Platano (Spanish for "General Banana") cut off our banana supply, because there are plenty of other fruits we can eat. If Generalismo Platano had a monopoly on every kind of fruit imaginable, then some farm subsidies might make sense. (Purists can commence flaming now.) But reality is much different from that.

In principle, it's easy to construct examples where Generalismo Platano has a monopoly on all the world's fruit, or Sheik Ahmed Al Dakarz (pronounce it sloppily and it sounds like "I made all da cars") has a monopoly on automobile production. But those things don't happen in reality.

Maybe, just maybe, oil is a case where a single country (the Saudis) have such control over a resource that domestic subsidies are necessary. But that's a whole other ball of wax.

[joe]

Not to mention, American farms produce much more food than America eats. We are a huge net exporter. Even if doing away with subsidies cuts production in half, we still wouldn't starve.

[joe]

During times of war, the government is allowed to force airlines to use planes for troop shipments. Which isn't as bad as it sounds, when you consider that the government pitches in on the cost of building the planes in the first place. The military actually depends on this capability for force projection.

Now, knowing the libertoid opinion about war, government, subsidies, and force projection, this probably doesn't sooth many feathers. But the ownerhip rules are not about protectionism or nativism.

[Amy Phillips]

Why can't the government stop subsidizing plane production during peacetime, and then, when they need to ship things, rent space on the planes just like anyone else who needs to ship things does? It seems silly to subsidize an industry all the time simply to get use of it for free on those rare occasions when we need it (and if the occasions aren't rare, I'd suggest that the government either stop fighting so many wars all over the world or get its own damned planes. Of course, I'd suggest the former no matter what). The ownership rules may not be "about protectionism or nativism," but that doesn't make them any less pernicious.

[junyo]

Why can't the government stop subsidizing plane production during peacetime, and then, when they need to ship things, rent space on the planes just like anyone else who needs to ship things does?

Because if we had to kick Germany's ass again, Lufthansa might not really feel like flying us...

[Anonymous]

We probably wouldn't need to kick their ass seeing that they probably wouldn't want to piss off one of their best customers.

[Brad S]

I work for a major U.S. airline, but yet it still bothers me that if an American citizen wants to fly point-to-point within the U.S., he/she has absolutely no choice but to purchase the Unionized, American-made product. There is no question that foreign ownership would result in increased frequency, better service, and lower fares in this industry.

[sarah]

Iraq has more freedom than the US in small ways too. Ferinstance, you can smoke in movie theaters there.

[logbass]

"Iraq has more freedom than the US in small ways too. Ferinstance, you can smoke in movie theaters there."

So there is less freedom for non-smokers. Great.

[s.m. koppelman]

Brad, I had no idea the airlines were unionized by law. Maybe if airlines were allowed to tear gas and beat their flight and ground crews we'd see more non-unionized airlines. It never ceases to fascinate me how people can imagine themselves as "pure" free-market proponents but have absolute contempt for the market when the actor is a group of employees pooling their market power when setting a price for their labor.

I'm not sure how foreign airlines would dramatically change the US domestic market either. I say let 'em in. Presumably they'd have to employ staff with proper work visas and/or citizenship, compensate them competitively (or lose them to carriers willing to pay more), let them join US unions if they so choose, and maintain their fleets at US safety specs.

Or do you envision Uzbek-based airlines flying US routes while paying Uzbek employees $150 a month in Uzbek currency, forbidding collective bargaining, and housing crews and support personnel 12 to a room in cold-water company barracks in a fenced compound? That might be cheaper.

I'm not crazy about the subsidies and protectionist swag going to airlines and the aerospace industry, but I'm just not sure I see how the market would change dramatically with foreign competition, subsidies or no. Demand for air travel just isn't that elastic, and runway capacity can't support a massive increase in flights. Meanwhile, cut-price, hub-averse airlines like Spirit, Southwest and JetBlue do seem to succeed at differentiating themselves on price and services through innovative business models just fine without reintroducing Pinkertons to contract negotiations.

[R.C. Dean]

I would point out that the French just ordered one of their airlines to break its contract to move British troops around in the Mideast, so the "just rent space when you need it" approach is not without its practical problems.

[Hiigaran]

"So there is less freedom for non-smokers. Great."

Where'd you come up with that flawed gem of wisdom?

There's no limiting of freedom for non-smokers.

[Douglas Fletcher]

"One question for the Bush administration: Hey, if it's such a good idea in Iraq--and it is--why not here in the good ol' US of A, where such useless restrictions remain in many industries, including the airline industry."

Well, maybe they're a little busy right now. You can't do everything at once.

[joe]

What makes you so certain, all of a sudden, that the Bushies are making an honest effort to do what's best for Iraq?