Airline Deregulation: Now Do It for Real 38 comments
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Bob Crandall, who used to run American Airlines, thinks that airline deregulation has been a failure and wants to re-regulate the whole thing. But his argument comes from the point of view of airlines, not of passengers:
Deregulation did bring lower fares and low-fare airlines like Southwest and JetBlue. But can anyone look at the state of the industry these days - it expects to lose as much as $6.1 billion this year - and say air travel's grown more efficient or innovative?
...For passengers, Crandall's plan means fewer flights and higher fares...
But what are the other options? Collectively, airlines have lost over $13 billion since deregulation, and that's after you throw all the profitable years into the mix. Carriers are cutting routes fast, but with low-fare competitors still growing, so far they haven't been able to raise fares enough to cover costs. We've seen 24 airlines go under or go bankrupt in the past six months alone...
Re-regulation would suck. But the alternative could be just as bad.
As a passenger, I don't much care whether my airline is making or losing money. In some sense, if the airlines are all losing billions of dollars, then passengers must collectively be getting a bargain, since they're all flying at well below cost.
If lots of airlines go bankrupt, fine. It's not going to stop them flying, most of the time. And if they do stop flying, that's fine too. If you want to look at the effect of deregulation, don't look at profits, look at passengers. Passenger miles on airplanes in the US have been steadily increasing since deregulation, and continue to increase despite all those industry losses.
Here's the data: there have only been two years since 1981 that passenger miles decreased, and those were 2001 and 2002. Previously, the high point, in 2000, was 69.25 billion passenger ton-miles; the figure for 2007 was 79.74 billion. In other words, growth in air travel is vastly outstripping population growth, and people are flying more than they ever have in the past.
If the legacy carriers become a thing of the past, that might well be bad for Bob Crandall's net worth. But the rest of us won't mind too much: We'll just go the way of the Europeans, and fly other airlines instead.
The US problem isn't too much deregulation, it's too little. All those ridiculous laws on foreign ownership and whatnot make barriers to entry far too high. Airlines should be like restaurants: lots of startups, lots of failures, and the occasional big success (like Southwest). As it is, just because three or four US airlines are struggling (no one really cares about the rest), people like Crandall think the entire business model is broken. Maybe the old one is, but I'm sure there are new ones which aren't.
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This article has 38 comments:
Back then you had Real Food in Coach (Economy didn't exsist then). Wider seats with leg room.
Your ticket was acutally worth something. You could also take one airlines ticket and go to another airline turn in that ticket and actually use it to get another ticket on a different airline so you could get where you were going.
Oh yeh you had people that dressed like people and not like they just left the local homeless shelter. You know the people I'm talking about. They usually dress in clothes that haven't been washed in years, and they smelled the same.
An airplane is not a bus. Though you people like to think of it as such. An Airplane takes a lot of manhours to maintain.
Manhours = Money.
Weather you like it or not we're bleeding so you can fly for $69 to Orlando.
Oh by the way if you haven't noticed. Your great Low-Cost carriers are starting to feel the squeeze now also.
There are no profits in competition.
Monopolies make money and the public gets shafted just as they are getting shafted by Mr. Populist Chavez, & Iran's Almaheed (inanutjob) OPEC and greedy commodities traders.
Competition made the Legacy Carriers dinosaurs,
They are still dinosaurs even in pre & post Ch 11
They don’t know how to function efficiently nor take care of their employees.
Reregulation guarantees new monopolies or oligopolies.
Crandall was an A.H, hated by employee & Executives alike feared he was a bully in a bully pulpit. Like Jack the GE Welch & Chainsaw the idiot. Little dumb Caesars who made their operations lean and mean and the employees screwed. Hell like others they give to only causes, themselves. They intimidate scare people and profit. Mega-egoes mega Caesars. Mega Dictators who are worshiped by the management gods and hated by the workers.
Regulation will bring political appointees with lots of VPs in every city with big salaries an executive with a secretary in every city in charge of toilet paper to peanuts.
New York Air & People’s Express knocked these Legacy Carriers on their butts. I know they are gone now. Gone into Continental's lean mean fighting machine.( Social & Labor Academic Engineering Studies over on).
Regulation allows the unions the pilots and the flight attendants to get paid exorbitant wages; retirement that cannot b-sustained executives will make larges sums screwing the golden goose the Public. Only the very affluent & rich will be able to afford to fly. In effect Regulation guarantees a carrier will never fail or go chapter 11. Then who will pay, the consumer? Who pay the retirement & health bennies? YOU ME UNCLE SAM . PBGC.
Southwest keeps it simple and everyone must work & work hard to get paid. They are treated with decent pay benefits & sound religious principles and love their company.
Jet Blue was on the same SWA model until they went to two different airplanes, which was a kiss of death because it doubled their training costs maint. costs & made for scheduling nightmares. Overnight they went from a lean machine operator to a classic Harvard Case study circa the 60s Mohawk & Allegheny Airline. They also bought Airbuses, which exorbitant prices, which make your maint, shaft the French EU give to you, and then when you buy parts you. Costs double maybe triple and you are in trouble. Coupled with the JFK Delays and Airplane and paxs held hostage for hours destroyed their creditability with tough demanding unforgiving New York Paxs.
FAA & FAA ATC has changed very little because it is choked by gross incompetence and layers of useless unqualified managers who have meeting meetings & more meetings to death and a bureaucracy that has lost 1000s of poorly treated experienced people. The ATC architecture is still in the dark ages 1940-50s 60s. There is hope if is it was privatized where you could move it always from politics (political appointees & technical incompetence abound) They have burrowed so deep its incredible.
Make it a technical private government business and separate the regulatory functions & the funding that Congress hold hostage each year. That will never happen too many fiefdoms at stake.
There are no Champions, benevolent Kings Queens,
Real Leaders or People Managers in Corps & Govt.
Its an epidemic across the Nation Public Servants & Corporations they are so self centered and self profit motivated that they do not run their ships very well.
We need champion’s visionaries like CR Smith of American Airlines who bought the DC-3 revolutionized Airlines by being able to make a profit.
Howard Hughes brought innovation and a tight well-run well-oiled machine in TWA & Hughes Airiest. He provided money and demanded the Lockheed Constellations.
Delta was Classic people oriented profitable admirable operation they owned their ships now the banks aircraft & syndicates own them and suck the life blood funds out of carriers with interest.
Someone in the airline business is making huge quantities of cash the managers get their bonuses the employees get shafted and the banks executives and insurance companies who hold the mortgages on the flying machines suck the corpus dry.
Champions Bob Six at Continental’s Golden Years
Pat Patterson of United Air Lines.
I could go on for hours? About my beloved Flying machine business.
American Corporate Greed and Avarice.
Where are the Pete Quesada's and Najeeb Halbys of the FAA (CAA)?
Where is the Airline Executive of old like Juan Trippe who demanded the DC-8 the 707 the 747 brought us out of the Props. into the Jet Age. Where are the people countries who had the courage to build the SST and the Executives like Braniff's Harding Lawrence who chose to fly the SST in America.
Richard Branson in my eyes is the only 21st Century true benevolent King & Champion with the money the backing the brains and gonads the risk to go for it. To push the envelope. Ronald Reagan envisioned an Orient Express. The Technology sits idle unused because there is no champion no visionaries no infrastructure no risk takers to demand it.
Think about this Mach 8.0 4800 MPH KTS
Think about how world travel times would change like going from Panama Flying Boats 110kts to DC-6 to Connies 180 kts to Jets 480 kts .80 mach. to Mach 8.0 (5500 MPH)
There is no JFK that says lets go to the moon. and we did it.
There are few DARPA Geniuses left & visionaries who pushed for Mosaic the WWW and other great innovations and creations.
Where are the Champions? Where is the Champion?
to push the envelop and lead their troops and employees to glory.
Jesus Christ Allah The Creator. Where the Servant Leaders?
PRCIII
Passengers are truly getting what they pay for now. They have consistently shown that all they care about is price. At my airline, a mechanic used to meet every flight and deferred items where at a minimum. A First Officer and a mechanic would preflight every flight. Now because of airlines like Jetblue, who get their maintenance done in San Salvador, over half of our mechanics are gone and we outsource our maintenance to places like China. This has real safety and security implications. Instead of having extra Flight Attendants to provide excellent service we now carry the bare FAA minimum. We now go for the lowest bidder on everything at the airline and it shows. It shows on the level of service, the quality of our product and I see it when I preflight the airplanes.
You fly on a system that is statistically safer than walking, but like all greedy self- centered people you want it cheaper at any cost. You don’t see anything but the seat and ticket price. You don’t see the massive amount of training it takes to keep pilots, mechanics, and flight attendants current. You don’t see the enormous infrastructure required. Training centers for pilots and flight attendants, huge maintenance shops for all the ground equipment, hangars for aircraft maintenance. What you see as a passenger just scratches the surface.
Be careful what you ask for you just might get it.
Southwest pilots are Unionized and among the highest paid 737 pilots in the industry.
Legacy airline will be fine. Just hold your breath.
I think I see a better argument for regulating restaurants than for airlines. If you want to talk safety, there is much more risk in eating in restaurants than on flying US carriers. Think food poisioning!
Just look at the statistics: flying is safe.
"greedy and self-centered": you say that like it's a negative thing! You're simply describing a large component of human nature. You'll see if everywhere--even in the behavior of pilots. It's not an issue; it's just the way we are.
I don't know why the training that employees undergo is relevant to this discussion. The market values that training; it's the way the world works. If training and remuneration were immutably linked, there'd be a lot more people with graduate degrees running around. People are paid what they're worth, not what they think they're worth!
It doesn't matter either what goes on behind the scenes. Every day, each and every one of us flushes. We don't understand the details of a sewerage system. We don’t care how fresh water arrives into our homes. The systems involved are complex; they involve lots of moving parts with trained people to ensure it's safe. None of us needs to know the details. Just like the airline industry; it doesn't matter, nor should it matter to consumers. The complexity of a system has nothing to do with its relevance.
Much as I don’t enjoy flying low cost airlines, the model works. While Southwest doesn’t yet fly outside the US (it soon will), there are examples of profitable, low-cost carriers in Europe, South American and Canada which successfully follow the Southwest model. It seems that Southwest has found the only niche that works (examples such as NetJets aside); entrants that deviate too much from this model seem to fail.
Your post echoes a lot of sentiment which, frankly, is not called for. If you look at consumer behavior in general, people don’t care if a company is profitable. They don’t care if a company goes into bankruptcy. In the grand scheme of things, why should they? They swarm furniture stores that are having “going out of business sales.” Failure of a bad business model is what makes an economy vibrant. The consequence of a failed business is the chance for assets to be redeployed into some that may turn out to be more successful.
I certainly feel for people losing their jobs and benefits; it has happened to many of us; it’s the price we pay for living in a private enterprise system. Good ideas should be allowed to thrive; bad ideas should be allowed to flounder. They should be allowed to collapse quickly, completely and irrevocably. There are casualties in such a system, but the benefits far outweigh the costs. I tend to agree with the sentiment that C11 reorganization isn’t working well in the airline industry.
The taxpayer argument isn’t a good one. Even if former employees get welfare benefits, it’s a small percentage of the overall government spend. It’s also a temporary measure. You might think that taxpayers would be left holding the bag, but the Pension Benefit Guaranty Corporation doesn’t receive taxpayer dollars. It also doesn’t necessarily reimburse loss at 100%.
The statement that there was “less government welfare because people had real jobs that made decent money” doesn’t really hold true. Historically, there’s not much of a correlation between those two factors.
It’s tough medicine to take, but the reason that airline employees don’t drive fancy cars or live in big houses (the inference here is that these employees don’t receive much in the way of compensation) is that they’re paid what they’re worth. Society may be perverse in how it values things; we have to live with it or move on!
The US is in a good position right now in that it can import many scientists, engineers, software developers, practitioners in the medical field, etc. It’s impossible to know if this situation is sustainable. It may even not be desirable to depend on such foreign help. If there is a problem here, the solution is probably a greater emphasis on education. Sure, work is outsourced, but it hasn’t had a material effect on the economy.
I think we’re always going to read about the demise of the US economy. Things keep on improving. There will, undoubtedly, come a time when the US economy isn’t the global leader; things will still keep on improving.
It doesn't matter either what goes on behind the scenes. Every day, each and every one of us flushes. We don't understand the details of a sewerage system. We don’t care how fresh water arrives into our homes. The systems involved are complex; they involve lots of moving parts with trained people to ensure it's safe. None of us needs to know the details. Just like the airline industry; it doesn't matter, nor should it matter to consumers. The complexity of a system has nothing to do with its relevance."
This is important because the airline pays that cost and therefor it goes into the cost of the ticket. All that trainining an infrastucture is what keeps you safe.
"This is important because the airline pays that cost and therefor it goes into the cost of the ticket. All that trainining an infrastucture is what keeps you safe."
The price that consumers pay for any purchase has costs, including training and associated costs, built into it. Be it the purchase of a car, a ride in a taxi, a can or corn in the supermarket, Aspirin from the local pharmacy all purchases have costs built into the price. Those costs aren't relevant to consumers. We don't need to know the production history of a product to make a decision.
I actually think the industry needs to either be completely deregulated or completely re-regulated. What we have now is no-mans land. For example, United Airlines was crushing Frontier Airlines in Denver. Frontier complained and the DOJ and said United was unfairly competing by pricing below its cost. United was forced to back off and allow a competitor to flourish. But when Independence Air started in Dulles, selling tickets well below their costs no one came to Uniteds defense. Another example, United and American were asked to pull down flights at peak times in Chicago which they did, only to be rewarded by the FAA encouraging JetBlue and Independence air to fill the exact times. So instead of the free market working we have a government that meddles when it is politically expedient to stop the free market from working.
I am not sure that air travel should be treated like a restaurant or other business. Airlines are providing an essential service to this country, perhaps to have a reliable and predictable travel experience we should reregulate.
"Just look at the statistics: flying is safe." Bioinvestor, I have to address this statement. Flying in the USA is safe, but not inherently so. Flying is inherently dangerous and it is through the efforts of exceptional highly trained professionals (pilots, air traffic controller, mechanics and flight attendants), consistant repetitive training, working through a strict set of laws, and investing in new technology, that makes it safe here in the USA. Look at the safety record in the rest of the world, even in Europe they had a midair collision due to ATC error just a few years ago. I am afraid that the free market is eroding the margin of safety that passengers take for granted in this country.
I wouldn’t say the examples you cite about United and jetBlue can be extrapolated to the whole industry. The dilemma for regulators, those officials that try to ensure that the private enterprise system is humming along nicely, is to balance the economic needs of airlines with the hub and spoke system with those of consumers that want choice. If I am reading your position correctly, I’d agree that less government involvement with decisions would be better. If an airline dominates a hub completely, something which hasn’t occurred yet, and uses, say, predatory pricing, then government should act. I am not opposed to a monopoly as long as it plays fair.
I am not arguing that airlines and restaurants are equivalent. If the argument is that inherent danger should trigger government oversight, then there are more targets than just airlines.
I’ll reiterate that flying is safe. You described why. For me, that’s not the point; flying is safe. There are inherent dangers in lots of activities: driving, eating out, showering, but there are ways to mitigate dangers. The airline industry does a better job of reducing those risks than many other industries. As I pointed out elsewhere, just because there’s danger doesn’t mean that something is dangerous. All industries to a greater or lesser extent control those dangers and reduce risk of failure. The record of safety is undoubtedly thanks to the training, vigilance, etc. of dedicated employees in the industry; the result is that air travel is safe.
I don’t think that a mid-air collision over Switzerland is an indictment against safety in Europe. As you point out, that specific problem seems to have been caused by an ATC failure. There have been close calls in the US too. There are certainly different safety standards in different parts of the world, but for investors in US legacy carriers, it’s not a concern. The industry has quite a remarkable record of safety.
Yes, bad business models should be allowed to flounder. However, having almost an entire industry go bankrupt indicates problems of a different nature. What would happen to our economy if ALL the airlines that recently declared bankruptcy were forced to liquidate? The economy would literally come to a standstill. Think the day after 9/11 and have it last for about a month. I would argue that the result would be a disaster. We're not talking about English weavers here.
Regarding the pension/welfare benefits - the fact is someone else will pay for them. We would be better off if these payments were as close to zero as possible. It does add up - otherwise, why was welfare reform such a hot-button issue years ago?
I would argue that there is a correlation between a strong middle class (tied to a nicely growing economy) and less money spent on welfare assistance.
People are not paid what they are worth. They are paid what they negotiate. Unions gave workers more negotiating power. That translated to better wages and working conditions. Yes, sometimes what society feels a certain job is worth is "perverse", but you don't just give up and take whatever you can get. Unions were born because someone, at some point, decided to not just "move on" - they fought for, and often succeeded, in securing better compensation and working conditions. To suggest that we should just go along quietly and take our lumps ... well ... that not the attitude that the British had when they fought the Germans over the skies of London.
Outsourcing hasn't had "a material effect on the economy?" Then what was that big sucking sound I heard after NAFTA passed? If you are willing to accept driving down wages to third-world levels, then you better be prepared with all the other third-worldisms that come it. Are really ready for Baghdad? How about Moghidishu? No thank you!
Finally, your commented that "no matter happens," things will keep improving. Are you sure? What were the Dark Ages I read about? Did things keep improving for the Mayans? Or the Egyptians? The US has been very lucky for the past 200 years because it was founded by geniuses. It was guided ever since by leaders - both in business and government - that sought to achieve a position of strength. That took a great amount of work. If do not continue to work hard to make the best, to do the best, then we will watch other nations eclipse us economically, and then perhaps, militarily. Our nation is only as strong as its weakest link.
If all airlines were to liquidate, that would cause problems. There is absolutely no sign that such an event will occur; it’s not going to happen. A more likely, though not certain, scenario is that a legacy carrier will enter reorganization and not reemerge. It’s possible that a carrier, in the current lending credit environment, won’t be able to finance successful emergence from C11. Cutting capacity, through the liquidation of a legacy carrier, while painful in the short run, just might be good for the industry. Just to be clear lest someone not read through all the posts: I didn’t suggest that all airlines should liquidate.
The people who will ultimately pay for a collapsed pension program are the employees. As I stated, the federal program that “protects” pension isn’t funded by taxpayers. Welfare and pensions are two separate and distinct issues. They are not related.
People are paid what they’re worth. Negotiation is part of the process. I don’t think generalizations about the role of unions are realistic. There are certainly benefits to unions: conditions have improved for employees, more people have had opportunities to springboard into the middle class. There are downsides too, when it creates inflexibilities in an industry and creates an opportunity for competitors. I enjoyed the soliloquy that followed about the British and Germans. I am not sure if many union members give it much consideration, certainly not German unions!
I have no clue what you’re talking about when it comes to NAFTA. There’s no evidence to support the claim that NAFTA is a net negative for the economy. Growth has continued; unemployment is low; there’s no evidence that jobs were lost.
Things will keep improving. You’re talking about a complete collapse of a system. Today, that would mean a complete meltdown of the global economy. An asteroid strike, a global deadly plague, a supernova in the neighborhood, each of these could cause a disaster, but as long as some exogenous event doesn’t occur, I just don’t see a collapse occurring. I don’t buy the argument that you present for the success of the United States. The people of the US have made the country great; the leaders just get the credit. Sure there have been great leaders, but it’s the people that make the difference. If other nations don’t eclipse the US economically, then there’s a problem with global growth. I certainly expect that China and India will continue to grow faster than the United States and eventually become larger economies. It’s not a problem; the former leading economies of the last few centuries are, today, doing quite nicely. I don’t see the success of others as being a negative to the United States! Go China! Go India!
Your second point is taken. I agree with you there.
I think you are partially correct where you claim taxpayers do not pay for lost pensions. Companies must pay premiums to the PBGC to insure against pension loss. That cost is passed on to the consumer. If, however, a company's unfunded pension liabilities must be assumed by the PBGC, it is possible that these total liabilities would exceed the PBGC's ability to pay for them. There was talk of a taxpayer bailout of the PBGC when United Airlines turned over their pension liabilities to them. It was a clear strain to the system. I grant you we taxpayers may not be on the hook for that yet. What I should have said is that this money must come from somewhere if that were to happen. Instead of United Airlines paying pension benefits, the PBGC would. If the PBGC runs out of money, and Congress bails them out, you and I will get the tab.
My point about unions is that they seek to improve what their members are "worth." Negotiating pay and benefits are a central part of that process. They don't just assume what management offers is OK and then "move on." Their tenacity in this process is what I was referring to. I don't quite know what your point was about German unions - they are very tough negotiators and seem to always be on strike. Yet, Germany is the leading exporter in the world and has been for the past few years. Certainly a unionized workforce has not been a hindrance. Their workers tend to be very well trained and highly educated. Call it a draw?
Regarding NAFTA, surely you jest. You mean to tell me you never heard of Ross Perot's famous quote? Or the debate as to whether NAFTA was a "good deal" for the US or not? There is a LOT of second-guessing NAFTA's benefits now. Just ask the people in Ohio. I would put to you that there has been a net loss of high-paying manufacturing jobs. Yes, those jobs have been replaced, but by lower-paying, less-skilled service-sector jobs. Not good.
Regarding your last point, I am not talking about a cataclysmic event. I am talking about a slow degradation of a society's ability to improve the lives of its people. Yes, the people of the US absolutely have been great. Unfortunately however, there are plenty of examples throughout world history where terrible leaders have absolutely ruined a nation populated by good people. Leaders are important for they guide the efforts of the many. For the US to continue to succeed, it is absolutely essential that we have good leadership to keep the ship pointed in the right direction. That means continuing to improve our educational system so that American citizens can produce goods and services whose added value makes our society more prosperous. It also means ensuring that the values of freedom and liberty remain central to our way of life. Don't get me wrong. I've been to China and I like the Chinese people. But until the Chinese government makes more of a commitment to human rights, you won't catch me cheering them on just yet.
Go USA!
In the example that you cited about FAX machines, etc. you're supporting my point. FAX machines or the Internet are examples of new ways replacing old. People working in older technologies are displaced; they have the chance to retool; if they don't, they will to likely have to endure lower standard of living. You misrepresent what I said when you say that "These ideas and products did not come to us from failed business models." I said that the new replaces the old; I was talking about a dynamic economy where bad ideas fail; where good ideas thrive. The key thing to understand is that these businesses replaced something else. I talked about failed business models, but not exclusively. I also talked about new ideas replacing old ones. All new ideas are, essentially, an improvement on something old. All new ways of doing things replace something else.
I can tell you that I am completely correct when talking about pensions and the Pension Benefit Guarantee Corporation. Taxpayers don't give funds to this entity. You're surmising that the situation may change in the future. However, the facts are that taxpayers, today, aren't funding this entity.
My point about the German unions is that you provided a poor metaphor that, frankly, weakened the argument you were struggling to make. I have no idea if union workers are well educated. I do know that, in the US at least, union membership has seen a very steep decline--and it continues to vote. It seems that society is making its own decision about the value of unions.
When you say that "you mean to tell me that you have never heard of Ross Perot's famous quote?" That statement doesn't represent what I wrote. I didn't talk about Ross Perot; I didn't ask any questions about him. You introduced the quote; I ignored it because it's not relevant. I wrote that the facts simply don't support the claim that NAFTA has been a net negative for the US. Jobs have migrated south, but there has been no net job loss in the US. A pithy remark by a presidential candidate isn't something I find to be substantive.
Thanks for clarifying what you meant. There isn't evidence to support the thesis that the US is in decline. I am going to dismiss your discussion on the role of leaders. The organizational structure of the societies you cited in no resembles the US. A US political leader doesn't have the degree of absolute or autocratic power that existed in older societies. I don't see the analogy as being strong.
I think you're vastly overemphasizing the role of political leaders in a democracy. The US grows because of its people and the work the work ethic that they employ.
With regard to China, I have no great love for the country, but a virus has been let lose. China will surpass the US, but when it does, it will be a society that greatly resembles the US. What will bring change in China is a strong middle class. In fact, as property rights in China start to emerge--and private property is a growing concept--there's no going back. Change will be slow; however, I think that change in China is inevitable. Baring any catastrophe, it's also inevitable that China will eclipse the US economically in two or three generations.
Your original quote said that the "failure of a bad business model is what makes an economy vibrant." That is not the same as businesses successfully retooling their models or for new business models forming due to new inventions. I emphasize the "where good ideas thrive" more than "bad ideas fail."
Maybe we ought to drop the point about German unions. You brought that up in your comment as a rebuttal to my comment about the English stubbornly resisting the Germans during the Battle of Britain. My original point discussed what someone's "worth" was. We as people and organizations are sometimes placed in situations where we have to fight, literally, for our survival. We don't accept what is offered and just "move on." In addition, there have been CEOs recently who have been thrown in jail for financial shenanigans. They have almost ruined some businesses. What were they worth?
Regarding NAFTA, we first talked about outsourcing. NAFTA has directly led to the outsourcing of a great many jobs to Mexico. Fact. Ross Perot, in his "pithy remark," pointed out, rightfully, that this would happen. People who used to make a good living manufacturing cars here in the US now don't anymore because people south of the border do it - without healthcare, without pensions, and without workplace or environmental protections. I don't think Ross Perot's remark was pithy at all. In fact, I find it rather clairvoyant and extremely relevant.
Finally, your comment that you are going to "dismiss you discussion on the role of leaders" comes across as very condescending. To tell you the truth, in all my travels, I have found people around the world to be pretty much the same. Decent, just looking to have a nice life for themselves and their children.
As I mentioned, the world has countless examples of the central role leaders play in a nation's destiny. Some good, some bad. Hitler, Mao, Stalin, Churchill, Ataturk, Peter the Great - these leaders were important. Look at nations that have an absence of leaders like Somalia. Do you think Somalia will ever amount to anything without some form of leadership? The difference between our leaders and leaders of, say China, is how we get rid of ours. We vote them out. Chinese citizens cannot. Hence, US citizens have an important advantage over other nations in that we can truly change course, peacefully, every four years. If Americans are not happy with how things are going, if they don't think things are improving, they can exercise their right to change. The US is a very wealthy country. There is no reason we cannot be at the forefront in business, technology, medicine, and environmental issues. It will take a concerted effort. Having a nation of "May I take your order, please?" is not going to be the answer.
I must admit, you are a tough debater.
The discussion was about airlines and the claim that people are essentially agnostic as to whether a carrier lives or dies. I cited as an example of furniture stores and how people swarm them once they have liquidation sales. I also said that failure of a bad business model makes the economy vibrant. You appear to interpret what I wrote to mean that the failure of bad business models is the *only* thing that makes an economy dynamic: something I didn't say. (It turns out that, when new technology comes along, an erstwhile good business model becomes old and stale. If it doesn't change and can't compete, it fails.)
One more thing, I never suggested that all airlines should be in bankruptcy. In fairness, you introduced the idea that "a large amount of bankruptcies are bad for an economy" in the same paragraph where you responded to my posted. I never discussed this topic.
So, a bad business model failing isn't meant to be read as a company retooling. They are two different points of discussion, which were included in different paragraphs.
We can dump the Germans. I thought it a comparison that didn't help the original argument.
I think that a remark such as "giant sucking sound" to describe a complex issue is, by its nature, pithy. Perot's comment was in the context of his opposition to NAFTA and the damaging effect that membership would have on the US economy. Back to what I wrote: I said "sure work is outsourced, but it hasn’t had a material effect on the economy" (keep that phrase in mind). If you go back and look at the sequence of comments: (i) you talked about jobs in China and India; (ii) I explained that outsourcing has had no material effect on the economy; and (iii) you responded by introducing NAFTA and outsourcing. Neither China nor India is in NAFTA! So, I did say that jobs are outsourced; I didn't talk about NAFTA. I am just trying to show that what I write is misrepresented or mischaracterized in your response.
Now I will tell you what I think about jobs going to Mexico thanks to NAFTA. It's bad for people in the US who lose their jobs; it's good for the US economy. This cycle of jobs going offshore has been repeated for scores of years. Textiles, steel, electronics, automobile production, the list goes on and it will continue to grow. When you look at the industries that are gutted in the US, you'll see a trend over time: there's much more value-add in the industries that are left behind. Workers--people like you and me--have to constantly retool and readapt.
I do dismiss the discussion because, as I said, I think that there is way too much emphasis on the role of leaders. Leaders in a democracy can set the tone; some even introduce ideas. That's it. Radical change is tough.
Your list of leaders is interesting. Churchill was certainly a good leader, but he had to fight to form coalitions during WWII even among members of his own party. The big difference between Churchill and the others you list was that Churchill was booted out of office before the war ended. While he certainly set the tone--and it would have been good for Britain’s enemies if some other cabinet member were the PM--it was the British people that did the work. I don’t agree with the importance of the role of leaders.
Somalia is an interesting example; let me offer you another country, Zimbabwe; there's a country with strong leadership! Give me empowered people over a strong leader any day!
I certainly agree that the US, among other companies, has the option of selecting and firing its leadership. The truth is that, in any western democracy, there may be a change in leadership, but there is seldom any radical change in the country. If you want to change a country, you have to change the people.
The US is at the forefront of many areas. Though as other countries develop--particularly those with a greater population--they will flourish too. Ultimately, the US economy won’t be number one anymore.
My guess is that your comment about taking orders is a nod to the service sector, which is now the largest part of the economy and, incidentally, a hallmark of a developed economy. Let me give an example, about one hundred years ago, in 1900, about fifty percent of the US population was involved in the agriculture industry either directly or indirectly. By the end of the century, there were less than two percent of people in that industry. It's not an issue. Economies change with time. The US economy will too. Manufacturing will become less important as other nations, with a better cost structure, benefit.
How much do you think we get. Everytime I put my signature on a log page I'm putting my career on the line. Have you people ever signed anything in your whole life that was a matter of life or death? Huh!
Everytime a Aircraft TECHNICIAN signs off a log page he has the lives of every passenger hanging on what he has done. If something goes wrong I's on HIM and no one else.
So.......... What do you think we make. 100K, 200K a year. WRONG How about starting pay of $16 - $24/hr. If your lucky you might top out at $33 an hour. If your REAL lucky you just might work for SWA and top out at $50+/hr.
OH did I mention taking URINE baths because you passangers like to flush paper towels & whole rolls of toilet paper down our toliets.
So what's your life worth????????????
cheap seats. How do you like it? Stinks doesn't it? Take
the bus, it's even cheaper.
The Airline industry of the USA has been reduced to an economic shambles- with billions of dollars lost to investors , tens of thousands of jobs lost , service and maintenance debased , while transporting mostly human trash for less than bus fare .
There will either be re-regulation, the emergence of an airline monopoly ...or total collapse of the industry.
Neither the banks nor the employees can be expected to subsidize dirt cheap air travel for millions of bozos who belong the Greyhound bus The traveling public is soon facing a reality check.
The irresponsible political jackasses will not be impacted ..They will continue to joyride around in private jets at taxpayer expense.