Why politicians shouldn’t run companies

I had a spit-take at work today when I saw this Today in the Sky item about Senate Majority Leader Harry Reid and US Airways.

Reid singled out Arizona-based carrier US Airways, calling the company “shortsighted” for its continued downsizing in Las Vegas – once a large hub for the airline. Reid apparently thinks US Airways is making a mistake, and has requested a meeting with company CEO Doug Parker to try to convince him to change his mind.

Then I read the full text of the letter, and was even more shocked. I’ve been watching the aviation policy world for a few years now, and in that time I’ve never seen a more heavy-handed, intrusive attempt by a U.S. politican to interfere in the business affairs of an airline.*

I am writing to express my concerns about your recent decision to downsize your operations at McCarran International Airport in Las Vegas, NV.  I urge you to delay any service reductions or cuts until I am properly briefed on the alternatives solutions available to your airline.

So a senator now has the right to veto the operations of private businesses within his state?

Further, I am strongly concerned that your decision to reduce service to Las Vegas is shortsighted.  Like many tourist destinations, Las Vegas was hit hard by the economic downturn affecting our nation.  However, we are beginning to see the beginning signs of an economic recovery in Nevada.  For the first time in nearly a year, McCarran Airport has recorded two straight months of increases in visitor volume.  When passenger traffic returns, your airline will be well positioned to take advantage of the Las Vegas market.

This is the heart of the problem: Neither Harry Reid, nor any other U.S. senator, should run the affairs of a private company. Nor can they. As a corporation, US Airways has one task: provide consistently high returns to shareholders. It attempts to do this through one function: operate an airline for maximum profit, which means finding the sweet spot of consumer value for money.

A politician is not concerned with profit, or quality of service, or efficiency. A politician cares about patronage. A politician looks out for his own constituents, regardless of the logic of business sense. (It’s no coincidence that the part of the airline industry with the worst business record–the Essential Air Service–is the part that attracts the most congressional interest.)

Thus, a politician and a businessman have entirely different goals. Harry Reid’s goal is not the same as Doug Parker’s, and it is thus extremely arrogant for Reid to lecture Parker about business decisions. Who does Reid think he is? . . .

Because of the commitment you have shown to Nevada, I have been a longtime supporter of your airline. . . . I hope that we will be able to have a positive discussion about ways in which we can work together to address your continued service to my state.

My staff will be reaching out to your office to set up a time and date for us to meet in Washington.  I appreciate your personal attention to this matter.

Oh, right. Here comes the not-so-veiled threat. “I’ve extended a helping hand in the past, and I can retract it now . . . unless you do my bidding.” Politicians always hold a trump card.

The airline CEO targeted here, Doug Parker, is on record arguing for Congress to relax its hold on airlines. “Our message through 2009 is ‘do no harm.’ Let us compete, leave us alone,” he said at US Airways’ media day last spring.

Harry Reid seems to be attempting to bring this statement (related to me with sarcasm by a US Airways executive) to life: “There’s no part of our operation that government can’t find a way to improve.” For all its ham-fisted execution, arguments like Reid’s are dangerous and deserve to be firmly rebutted.

*The attempts by Minnesota officials to prevent/modify the Delta-Northwest merger on account of tax benefits it had received from Minnesota, while intrusive, was at least grounded in protecting taxpayers.

America vs. Europe: who overrates whom?

Not an aviation-related note, but given that many of my readers are also plugged into the travel industry, here’s an interesting diablogue between Bryan Caplan and Tyler Cowen.

Bryan:

When Americans visit Europe, they see a lot to like: Charming boulevards, delicious food, and historic cities that feel safe.  When Europeans visit the U.S., it’s not so pretty: While major American cities are impressive, their inhabitants can be more than a little scary even after the sharp decline in crime rates.  From an American or European tourist’s point of view, Europe seems not just more aesthetic than the U.S., but more hospitable.

He argues that American tourists see the quaintest and nicest parts of Europe, while most Europeans live in less appealing suburbs, and those who live in the attractive urban centers cannot afford to enjoy it much. Meanwhile, European tourists see some of America’s grungiest places (“NYC and SF are basically uglier, scarier versions of the premiere European cities”) but avoid the attractive suburbs where most Americans (happily) live.

“Europe is a better place for most people to visit,” he concludes. “But America is a better place for most people to live.”

Tyler, with a dig at modernist architecture:

Bryan gives some good reasons why America is better for 37-year-olds with young children, namely lots of living space and easy shopping.  But I view much of Western Europe as better for the elderly, if only because it requires less driving and they are more likely to live close to their children and perhaps also they receive more respect.  Western Europe is probably better for children too, for reasons related to safety and health care”

My alternative view is that Americans rate European life so highly (in part) because the buildings from previous eras are so striking and attractive.  If all of the U.S. looked like U.S. postwar construction, the country would still impress more or less as it does.  If all of Europe looked like its postwar construction, Americans would be less likely to admire European policies and political institutions.  Yes I know about Lille, and contemporary Spanish architecture, but in reality most Americans would think of Europe as some kind of dump.

What do you think?

Scare headline not so scary in article

Boo to Hot Air, which posted this headline: “Good news: Feds pulling workers away from FAA to staff exploding Cash for Clunkers bureaucracy” (I found it via Volokh.) The Hot Air post plays up the possibility that thin-on-the-ground air traffic controllers are being taken from towers to process paperwork. The article cited, from the Washington Times, however, makes it clear that this is not the case:

But Ms. Zuckman said that only support personnel, such as in finance and operations, were asked to work on the clunkers program.

“Nobody is being ordered to do anything; we weren’t asking air traffic controllers to leave their posts. We’re using budget and accounting people primarily,” she said.

“It was made clear that no core mission activities of the FAA are to be affected by this effort, especially as they could relate to air traffic operations.”

A union spokeswoman confirmed the account Friday.

“Air traffic controllers are not being asked to do this,” said Alex Caldwell, a spokeswoman for the National Air Traffic Controllers Association.

Basically, the actual story doesn’t live up to Hot Air’s scare headline. You don’t have to think that Cash for Clunkers was a good idea (I don’t) to think it’s a bad idea for federal support personnel to spend a few days helping to clear a backlog that shouldn’t have existed in the first place.

Unless something develops in this story, there’s nothing to see here.

Crew rest and training, new ATC contract, and more

• Patrick Smith has some thoughts on the Airline Safety and Pilot Training Improvement Act of 2009. He finds good, unnecessary, and controversial in the bill. [Salon]
• The FAA and NATCA have a newly mediated contract; it now goes to the controllers for ratification. [FAA, NATCA]
• Richard Branson will be testifying before a House panel on September 16. Looks like a good show. [Aviation Week]
• Burt Rutan, climatologist? [Aero-News.Net]

The solution to NYC’s airport woes?

Gothamist calls it “almost certainly a Swiftian satire,” but there’s something striking about the Manhattan Airport Foundation’s “plan” to convert New York’s long underused Central Park into the closest in on close-in airports.

There are already aviation buffs out there saying “oh please, oh please” — if only to experience an approach that would rival runway 13 at Hong Kong’s old Kai Tak airport.

And… I’m back

Hi folks. It’s been a while. One reason is that I have switched day jobs! After three happy years as an editor at the American Enterprise Institute, I am now managing editor of Philanthropy magazine, which is published by the Philanthropy Roundtable. The transition and learning curve of the new job have limited my free time for blogging, but I’m ready to dive back in. And I am grateful that I have the freedom to continue writing about aviation policy as a sideline. (As I note on my “About” page, nothing I write here should be construed as an opinion of my employer or any other organization with which I am affiliated.)

Today I have an item on National Journal‘s Transportation Experts blog — have a look.

Nothing to see here

Echoing Terry Maxon and Cranky, let me just say that the attempt by members of Congress to limit carry-on bag sizes by statute is a classic example of congressional kibitzing in the private business affairs of private-sector businesses. This is also, however, a bill that will go nowhere. Like many other minor pieces of legislation, it is introduced to make a stand, win the member some plaudits in the district, and die silently because it is not actually an issue worth Congress’s attention.

Let your left hand not know what your right hand is doing….

The Senate is set to vote on a bill that would “establish a nonprofit corporation to run a nationally coordinated travel promotion program.”

[Senate Majority Leader Harry] Reid said the corporation “would market the U.S. around the globe as a tourist destination.” Reid told reporters earlier in the week that the bill could create 40,000 new jobs in the U.S. [B.S.--ed.]

Initially the corporation would receive $10 million in federal funding from money collected from travelers under the Electronic System for Travel Authorization (ESTA) system currently being established by the Department of Homeland Secretary. After Fiscal 2010, the corporation would have to raise matching contributions to qualify for additional federal funding.

Radley Balko comments that “this is all because tourism is down, due all the money we’ve spent on post 9-11 efforts to make it more difficult for foreigners to come here.” (Reason piles on, too.) I’m sympathetic to that line of reasoning — want to talk about winning hearts and minds around the world? Then try making it not so much of a hassle to get through our ports of entry. But the numbers just don’t back Balko up. According to a 2008 report (with data up to 2007) from the Department of Commerce, after dropping off sharply post-9/11, foreign tourism began to rebound (not from every country, but a slight upward trend is clear). It wasn’t until after the financial crisis last year that foreign arrivals began to tank year on year, continuing to post steep declines in the first part of this year.

The fact is, regardless of the effectiveness of U.S. border security policies, the downturn in tourism is primarily due to the current economic contraction, not post-9/11 security procedures.

Now, whether it’s helpful for the government to get involved in the tourism marketing business is something else altogether. But I guess with all the work the administration has done to discourage U.S. companies to bring tourist dollars to places like Vegas, it might as well make up the balance by bringing in some foreigners.

Evan around the web

I’ve written a couple posts recently for other blogs, filling in for a vacationing Dan Webb (welcome back, Dan, and congratulations on the new Airplane Geeks gig) and looking at airport competition on AEI’s new (you should subscribe) Enterprise Blog.

This is just ridiculous

An obnoxious letter to the editor of USA Today:

It would be irresponsible to get ahead of evidence [in the AF447 investigation], but important factors are emerging. First, some experts blame global warming for the increased severity and frequency of hurricanes (most of which originate at latitudes within 5 to 15 degrees of the equator). Second, the flight appears to have passed through a band of equatorial megastorms. Finally, levels of turbulence in such storms are being investigated in the crash. Perhaps the memorial service in Paris will be recognized as the first for airline victims of global warming.

Hat tip to Cafe Hayek.