How lucky can Donald Trump get? He now has another chance to tick off the liberal progressives, and particularly, Washington Post columnist Dana Milbank, who’s probably written more than a hundred anti-Trump columns. All Trump has to do is make sure that Makan Delrahim, his pick to be assistant attorney general in charge of the Antitrust Division of the Department of Justice, plots a free-market course.
Mr. Milbank doesn’t like the way the airlines run their businesses. He thinks Congress can do a better job. Seriously.
“Washington,” Milbank says, “in its wisdom deregulated the airline industry and later looked the other way as it underwent a series of mega-mergers leaving a four-carrier oligopoly controlling 85 percent of the market. And what do we have to show for it? Reduced competition; packed cabins; tiny seats; proliferating fees for food, bags and flight changes; outsourcing of maintenance; boarding delays; higher fares in many cases; labyrinthine contracts that protect airlines rather than consumers; and routine overbooking.
He claims that four carriers are insufficient for competition to work for the benefit of consumers. But what is his evidence for that? How many carriers does he think are necessary? He says the mega-mergers that followed deregulation have “reduced competition.” Yes. And if we had gone from a hundred carriers to ninety-nine, competition would also have been reduced. The question is, how many carriers do you need in order to produce adequate competition? Mr. Milbank hasn’t a clue.
align=”right” Congress, in its wisdom, has given us 92 poverty programs that cost, in 2012, $799 billion (about $9,000 per person or $36,000 for a family of four) and $22 trillion since the inception of the war on poverty. As President Reagan said, we declared war on poverty, and poverty won. And Mr. Milbank wants those same people to run the airline industry?
Then he lists eight or so gripes that undoubtedly annoy passengers, except those who fly in premium classes. What he has forgotten―perhaps he is too young―is that in the good old days of flying it was all premium class. Spacious cabins. Big seats. Hot meals. Fancy cutlery. And lots of personal attention. Verrry fancy.
And very expensive.
Deregulation has enabled many people to fly who had not been able to afford it under the old pre-deregulation command-and-control system. Grandparents can now fly across the country to see a new grandchild or attend a graduation. Or see friends. Or go to a medical specialist. The kind of thing rich people like Mr. Milbank do without thinking.
There are at least two problems with regulation. One is what is known as “regulatory capture.” The industry writes the rules. Nobel Prize-winning economist George Stigler described it as the situation wherein “regulation is acquired by the industry and is designed and operated primarily for its benefit.” Why would Mr. Milbank think otherwise?
But even assuming Congress could write regulations uninfluenced by airline corporations (and that pigs could fly), what is Mr. Milbank’s evidence that Congress could do a better job than the market?
Congress, in its wisdom, has given us 92 poverty programs that cost, in 2012, $799 billion (about $9,000 per person or $36,000 for a family of four) and $22 trillion since the inception of the war on poverty. As President Reagan said, we declared war on poverty, and poverty won. And Mr. Milbank wants those same people to run the airline industry?
Mr. Milbank doesn’t like having to pay a fee for checking a bag. But bag checking costs money. Milbank wants to socialize the cost. He wants passengers who are not checking bags to pay for his checked bag. Why is that an improvement?
And why should someone who has packed his own sirloin steak sandwich have to pay extra so Mr. Milbank can be served a meal? Milbank wants to socialize the cost of meals too.
Overbooking enables the airlines to fill more seats and keep fares lower. It is true that when too many people show up for a flight the airlines should offer passengers whatever cash is necessary to persuade enough of them to give up their seats so the ticket holders who are not willing to take a subsequent flight can be accommodated―instead of dragging them off bloodied and bruised. But is it clear that an inflexible government rule would work better at preventing these kinds of confrontations?
There are other effects of deregulation Milbank doesn’t mention: the decline of small and mid-sized airports. But the problem there is economy of scale: small airports have to spread over far fewer passengers fixed costs like the air traffic control tower, the runway, ticketing, and baggage handling. Who’s going to pay for that? Mr. Milbank would probably say that the government should pick up the tab. He’d socialize that cost too, to the whole U.S. population.
During the Reagan years, the Federal Trade Commission had a slogan: “The market doesn’t have to work perfectly to work better than government.”
Donald Trump, who famously repaired New York City’s beloved Wollman Skating Rink in six months (after the city had tried for five years) probably knows that instinctively. Mr. Milbank apparently has yet to learn it.
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