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Up, Up, and Away

Flying right in our bankrupt skies. Also: Lott gets no lift. Plus more.

12.12.02

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FLY RIGHT
Re: Michael Craig's Eat the Friendly Skies:

There are some misconceptions in Michael Craig's article about the
bankruptcy filing by United Airlines by that I think need correcting.

Mr. Craig claims that "The free market has broken down and can't fix things: the dominant players have developed an unsustainable economic model, but they are unable to change it and the profitable players are in no position to take over the market."

First, the free market has certainly not broken down; it is working as it should, forcing a poorly managed company, United Airlines, to enter bankruptcy. That is how it should be. In fact, Mr. Craig contradicts that assertion in the very next paragraph where he states "the government...wiping the slate clean so market forces can start to reshape it [airline industry]."

Secondly, as for the dominant players being unable to change their business model, this is simply not true. There is no law requiring that they operate a "hub and spoke" system where airplanes sit idle because connecting passengers can't make their flights. There is no law where employees cannot leave one airline to work for another one because they'll lose seniority, only an unspoken pact among airlines enforced through archaic and hands-tying collective bargaining agreements. Thirdly, the profitable players can fill the voids left by the failing dinosaurs: Just watch Southwest, Jet Blue and AirTran. They're doing so even today.

As to the employees who Mr. Craig states have the most to lose, he is certainly correct in that regard. But much of that is the fault of their own union leadership, especially in the case of United, where employees owned 55% of the company, and which had union leaders on the Board of Directors. The inherent conflicts of interest were a recipe for disaster from the get-go. There's nothing wrong with workers owning stock in their company, but plenty wrong when they have a controlling interest exercised by union leaders with no experience in running an airline.

Regarding employee salaries, Mr. Craig's question, "How can you overpay a pilot?" is silly. It certainly is possible to overpay a pilot, just like it's possible to overpay anyone. While safely piloting an airplane is of course a very important job, what would Mr. Craig pay? Half a million dollars a year? One million? Ten million? Surely Mr. Craig, as an investment professional, knows that market forces are the primary factor in setting wages in private industry. His argument recalls the nonsensical "comparable worth" controversy that was the rage a few years back. Besides, the evidence to the contrary is clear. Southwest, while still paying a respectable wage, pays its pilots less than the traditional carriers but has better service and a better safety record.

(This is not meant to begrudge a pilot his six-figure salary, as a Wall Street Journal column recently did. When the weather is at minimums and you're flying a coupled Category II ILS approach to get your jumbo jet into Frankfurt, Germany, with another airplane two minutes ahead and another two minutes behind, you want somebody in the cockpit who can operate under pressure. Throw in an emergency, like an engine out, and, well, you get the picture.)

No, union work rules , and employees' willingness to accept them, are the problem. While I can only speculate, I would offer that pilots and other airline employees would actually be paid more if the airlines had to compete for their services, as is the case in nearly every other private industry. But the unions and airline management have exploited the natural human desire for security, hence the seniority system (not that even it is a guarantee -- just ask all those former Eastern and Pan Am pilots.) But to paraphrase Franklin, those who would give up the freedom to work where they would be best treated for a little employment security deserve neither such freedom or security.

Cordially,
-- Paul DeSisto
Cedar Grove, NJ

Michael Craig replies:
Paul: Thanks for your careful and analytical response. Even when readers disagree, I appreciate that they consider the subject matter and my treatment worthy of discussion (though it would have been nice if you at least told me how clever my joke about United owing caterers $18 million was).

On the issues about the free market, let me start by clarifying my opinion, which I naturally consider "The Truth." I think the efficient economic operation of the marketplace generally leads to the best businesses, the happiest consumers, and the best solutions to society's problems. Generally. Someone who is 100% to the market as a solution would oppose safety regulations for airlines ("How much business will an unsafe airline be able to do after crashing a few planes?"), collective bargaining laws, unions in general, or bankruptcy protection from creditors. So my "free market" is, admittedly, a little convoluted. I simply think there are a few needs that don't get addressed in the best fashion by the profit motive, but the attempt to succeed in business usually works.

When I said the free market led to this result and is also the solution, I meant: (a) United is unable, without the intervention of the bankruptcy laws, to become profitable; (b) the Southwests and JetBlues of the world really can't -- and may not even want to -- replace United in the market; and (c) even if United disappears (as a real free marketer would say is the proper result), with air travel a necessity and no one to fill the need, it's a pretty reasonable compromise to have the bankruptcy court wipe the slate clean and give the market another chance.

I'd hesitate to blame the unions, other than the fact that they helped the employees get more money -- and paying them more money than Southwest's employees are paid seems to be a significant factor. These employees made concessions worth billions in exchange for the stock, and offered to give up more to help United get loan guarantees from the Air Transportation Stabilization Board. And that's the point I wanted to make: the employees are only the bad guys because they negotiated for, and got, more money than the employees of the low-cost careers. I'd have done the same in their position.

NOT A LOTT LEFT
Re: The Washington Prowler's The Whistling Dixiecrat:

Bravo for that article!!! I for one wish Lott would step down, but only because I feel he has little backbone. I understand he is ready to hand the equal opportunity over to Daschle again on committees. I am so glad to hear someone is going to watch him closely. Please do all you can to pressure Lott to stand tall and not let Daschle and the Black Caucus lead him around by the nose. Thank you. Thank you. Thank you.
-- Angie Bonham in Las Vegas.

You'd think that the Democrats would love to have Trent Lott remain in the Majority Leader position. After all, he's about the most inept wimp who's ever held that office.

Tom Daschle ran roughshod all over him, and Daschle's no LBJ, if you get my drift.

If the Republicans don't get rid of him, they're nuts.
-- Geoff Brandt

GUILTY UNTIL PROVEN REPUBLICAN
Re: Jackie Mason & Raoul Felder's Pariah Republicans:

This is a brilliant column which underlines what has been going on for quite some time.

The Jewish people are no different from any other races -- you think you have the monopoly on guilt?

Have you every seen an Irish Catholic American Mother in action? I would put two Jewish moms against one Irish Catholic mom in a room, and guess who would be the one standing at the end of the day? Yep, my mom ...

Please believe that you are now mainstream and that what you have always wanted for your families -- good upbringing, good education, good jobs, etc. -- is what the Republican Party wants too.

Get on the horn. The Republicans need your passion and your discourse. Thanks.
-- Trudy Gaffney Abramson

FULLY ACCOUNTED FOR
Re: The Washington Prowler's Absentee Makes the Heart Grow Fonder:

Just wanted to let you know that the Bush campaign coordinated a massive absentee campaign in Florida in 2000 with the Florida Republican Party. The reason many Bush staffers were convinced they had won on election night, in spite of the networks call for Gore, was they had tracked the exact number of absentee ballots sent to Republican voters. Remember the lawsuit the Gore people filed trying to get all the absentee ballots in two counties revoked because GOP staffers were allowed to fix the absentee request after a vendor flaw? The effort was extensive, and more than provided the Bush margin of victory.

Thanks for the reminder of how important absentees are to the GOP, and for the high quality of your online publication.
-- Matt Metcalf

GETTING ISLAM
Re: George Neumayr's Faith in Violence:

Having actually read the Koran myself, I am increasingly frustrated by Western politicians and pundits who, evidently taking their own holy books and religions at little real value, cannot believe that any one else would take his seriously. The Koran explicitly and repeatedly condemns Jews as liars, hypocrites and perverters of the true Word of God; it condemns infidels; and then condemns Christians as infidels who claim too much for themselves and who can never be trusted because they invariably support the Jews. And by Condemn, the Koran means explicitly Worthy of Death. It also explicitly and enthusiastically supports the Duty of all Muslims to enter a Holy War and combat infidels. There are upwards of a billion people on this planet who believe those things, these precepts having been repeatedly and violently preached from Mosque, School and Media where, for those geniuses in the West who don't read Arabic, Western people, countries and values, especially America, have been denounced for decades in the most extreme and vicious terms. To coin a phrase, OY! We just don't seem to get it. But I am very afraid we are going to.
-- Gene Wright
Laguna Niguel, CA

DEBLOVIATION
Re: John Nowicki's letter, "Howling at the Moon," in Reader Mail's All Over the Lott:

Bloviate?! Let us look at the word: "To discourse at length in a pompous or boastful manner." Now let us look at John Nowicki's "lengthy" discourse.

"In all due respect," he starts (implying that no respect is due), and continues in a pompous manner with "rapidly becoming old news Clinton administration" (he wishes), finds it "quite amusing" that someone still values the media, pulls up the rapidly becoming old news Gore performance in 2000, and boastfully mentions that he has "bandwidth and research time" to find the truth (as if "Truth" were to be found anywhere on the Internet!)

Well, Mr. Nowicki, with all due respect -- and some that's not due -- I took your advice and read a few offerings of Robert Somersby in his blog The Daily Howler. Thank goodness I too have bandwidth and research time (he said, boastfully), because in my years of law school and law practice (more boasting) I have seldom read any writings to equal Mr. Somersby's (he said, pompously). He takes longer to say less than even Larry King!

But if you like to read "Borking" of conservatives, Republicans, and even Harry Truman, that is the place to go for it. Thanks for the tip.
-- Bob Johnson
Bedford, TX

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