Monday, June 06, 2005

Corporatism is not Capitalism

George Will contributed a great column to the Indianapolis Star over the weekend about the federal government keeping poor airlines in flight.
Ronald Reagan said that Washington's approach to intervening in industries is: If it moves, tax it; if it keeps moving, regulate it; if it stops moving, subsidize it. Regarding airlines, the policy is: If they are failing, keep them flying; if they are prospering, burden them. But surely Washington, although difficult to embarrass, is embarrassed enough to repeal the Wright Amendment.

Will focuses on the Wright Amendment, but I want to take this opportunity to voice my extreme displeasure over the post-911 airline bailout by the federal government.

The airlines are for-profit corporations and should be allowed to succeed or fail according to market risks and demands. When the government steps in to save one of the big anachronistic airlines to avoid loss of the income taxes, social security taxes, and medical insurance taxes paid by the employees; it places a greater value on that company than the market will bear. That, my friends, is not well-regulated capitalism. It is corporatism and that way lies anti-competitiveness and for-profit fascism.


Blogger Mike said...

I read that article too. I get angry when I see the government bailing out airlines and Amtrak. Other airlines like Southwest manage to run a profitable business, why should bigger airlines get a break for running themselves into the ground? I have no sympathy for them. They run a bad business with poor customer service. I live in Philadelphia, home of US Airways. They will probably be the next airline to go under. Ever since Southwest has moved in to Philly US Air has been forced to reduce their prices. They are really hurting and I say good.

9:29 AM  

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