Deregulation never seems to result in more competition, just more consolidation and more and more powerful companies with increased lobbying powers and personal connections to top government officials.
Pre deregulation, the US government set the routes and prices, and even if an airline could exist. Eg. Southwest Airlines was forbidden to fly outside Texas. Prices were way higher and flight routes restricted. Very different today... Affordability and availability way up, overall enjoyment... that’s up to the traveler...
Southwest couldn’t fly outside of Texas because they chose to use Love field as their base. Love was cheap for them to get into because flights from there had already been restricted in an attempt to shift commercial flights to the fledgling D/FW international airport. Two airports in Fort Worth were similarly restricted and shifted entirely to general aviation.
Southwest back then was a very different airline vs. today; they acted more like a bus service between the major Texas cities than an airline- cheap fares, departures every 20 minutes to each destination, tickets generally available on extremely short notice without a markup.
They had to change their operating model significantly after 9/11 because of the new security measures. For example, They were exclusively using at-gate checkin, with reusable boarding cards that you gave back when you got on the plane.
That’s the origin of their first to checkin is first to board system; it originally reflected the order people physically arrived at the gate. And with the frequent departures, the first boarding card generally went to someone who had just missed the previous plane; there was no upcharge or hassle for getting on an earlier plane than you had a ticket for, so long as there were seats available.
Southwest was founded before deregulation and planned to fly exclusively intra-Texas routes to avoid federal route & fare planning. Obviously they also saw a market for the shuttle service they were running.
Separately, as part of the plan to build DFW all operating airlines at Dallas and Ft Worth signed agreements to move all service to the new airport once it opened. Key word: operating, Southwest wasn’t flying yet when the agreement was signed.
Between the agreement and DFWs opening Southwest started flying their shuttle service. Knowing that wouldn’t work from DFW, and since they hadn’t signed the agreement to leave, they planned to stay at Dallas-Love.
This sparked a bunch of lawsuits and other fights but the end result was the Wright Amendment which heavily restricted flights from Dallas-Love. The restrictions were a response to Southwest, not an initial factor in their plan. They were also another form of regulatory capture, since the incumbent airlines used their connections in the federal government to get a law passed restricting their competition.
Good regulation is good, and necessary. Bad regulation is bad, and should be adjusted or removed. Deregulation as a policy only addresses 1/3 of the above insights. Basically, it's lazy.
It's lazy because voters don't know or care about "common carrier" and "first to file" and arcana like that.
The alternative is to let all the folks who know the meanings of those sorts of things make the rules. Note that they will not be representative of the country as a whole. In particular they will be overrepresented by special interests andoneyed, entrenched incumbents.
One of the arguments for deregulation is that we just aren't good at fair regulations sometimes and no regulations is at least even-handed.
Hand waving all that as 1/3 the insight lacks quite a bit of nuance... and the lack of nuance is really why "good regulation" is so hard to come by.
Practically every position is nuanced. We all have complex reasons for why we believe things.
Would you say that your attitude describes typical de-regulation as a policy? I have a hard time believing that it's a nuanced view if instead of trotting out specific examples that you care about and will specifically address, you say "de-regulation" so your constituency cheers. (Not you, specifically)...
While most political positions are at least coming from a place of truth, what I think of when I hear de-regulation is not "some regulation is overreach and should really be peeled back because it's not fair xyz, here's what's not fair", it's the "government has no business injecting itself between me and the money I could make by introducing untold externalities into a free market system."
Good regulation is hard to come by, I think, because we don't like to maintain things. We see a problem, let's make a rule. Now the rule is a problem. Let's remove the rule. How about you decide if the problem would exist in the same or another form without the rule and try to adjust it to match the new problems?
> ...government has no business injecting itself between me and the money I could make...
Prepare again for more nuance. My position wasn't about rights but about competency. And it's not niche for folks with libertarian leanings. Reagan famously said the nine most terrifying words are "I'm from the government and I'm here to help" when criticizing government overreach.
I think part of the problem is that your mental model of problem solving presumes individual actors can have a lasting impact in complex and bureaucratic contexts.
It's not the same getting a committee of folks to think through problems the same way and to maintain the same rational approach over time. Keep in mind that these folk are biased (maybe unconsciously) in different ways, particularly in favor of competant lobbyists and potential corporate employers.
So it might be simpler to presume simple mechanisms, even doing nothing, might be the sanest and most democratic approach. Often problems, like lack of progressive pricing, should just be solved directly, through minimum incomes for instance.
Are you truly proposing doing nothing for critical domains like flight safety and food safety ? How many thousands of people will need to die before you change your position ? Are you even aware of the history of the formation of agencies like the FAA and FDA ? The FAA was formed after the Grand Canyon mid-air collision at the end of a series of air accidents. The FDA was formed after a truck-load of food adulteration and deaths. Please read up on Wikipedia on the conditions that resulted in their creation. You might possibly be enlightened.
I mean this is facially untrue. We’ve been undergoing a 70-year long period of deregulation, and it’s been overwhelmingly positive. (Not to mention, it’s been copied by nearly every Western European country, and has markedly improved what during the 1970s and 1980s were very weak economies.)
We can get next day packages from Amazon, for example, because of the deregulation of the airline and trucking industries: https://parcelindustry.com/article-5131-De-Regulation-of-the.... Previously, package delivery would take much long because packages would be transferred from carrier to carrier operating on regulated routes with regulated prices.
In the electric industry, deregulation of the generator side of the industry has caused wholesale electricity prices to plummet. Today, more than half the cost of electricity is from the still-regulated, retail distribution side.
We have also largely avoided regulation of the first major post-FDR industry: the Internet. If the US operated the way it did in the 1950s and 1960s, we’d likely have regulated prices per ad impression and things like that. Instead, the industry has flourished in the absence of regulation.
There is a reason anti-deregulation screeds focus on isolated incidents and are heavy on narrative. Why are we fixating in one instance of failure instead of looking at what airline safety records have looked like over the past decades overall? Objective views of numbers and long term trends make the situation look far more rosey.
It doesn’t seem very useful to talk about “regulation” as some sort of singular entity.
When you talk about the positive results of deregulation, that’s all economic regulation. Freight being run on regulated routes with regulated prices was protecting various groups’ economic interests. Usually at the implicit expense of the economic interests of everyone else.
Safety regulations are a completely different beast. Safety regulations in aviation have increased massively over this same timeframe, and the result has been an even more massive increase in safety. Crashes went from routine to unheard of despite a huge increase in activity. Cars have seen a similar increase in safety regulations and in actual safety, although the safety gains have been more modest and seem to have stalled out in the last five years or so.
That doesn’t mean safety regulation is necessarily good or that deregulation couldn’t be helpful sometimes. But the actual track record in recent decades is completely contrary to this idea of decreasing regulation providing better results.
We’re fixating on one instance of failure because it looks like a canary in the coal mine indicating a threat to the safest mode of travel ever devised.
> Safety regulations are a completely different beast.
Only they're not. If you impose a billion dollars in fixed regulatory burden then you can no longer have sub-billion dollar companies.
But lack of competition erodes everything -- even the safety rules, because bigger companies are more capable of capturing regulators.
Any regulation which is the direct cause of a lack of effective competition is doing more harm than good.
> That doesn’t mean safety regulation is necessarily good or that deregulation couldn’t be helpful sometimes. But the actual track record in recent decades is completely contrary to this idea of decreasing regulation providing better results.
That's kind of the point. The entire frame of "regulation bad / deregulation bad" is a farce. What you actually need is regulation that maximizes the ratio of benefits to regulatory burdens. That means removing burdensome and ineffective regulations and having efficient and effective ones.
But evaluating regulatory efficiency and effectiveness is dry and non-partisan. Framing it as "we need more regulation" is failing before you even begin.
This 737 MAX debacle is a case in point. It came about because Boeing was trying to avoid the high costs of recertification, so they didn't change things that could have made the plane safer because changing them would have required recertification.
So we have "safety regulations" negatively impacting safety by making it move expensive to improve safety than not. That's not a case of needing more overall regulation or less overall regulation, it's a case of needing to replace worse rules with better rules. The ideal outcome is that the net regulatory burden becomes lower and as a result it becomes less expensive to make changes that improve safety.
If I interpreted this argument correctly - regulation is bad, costs money. How much is a human life worth? Clear to me is that Boeing did that sick math and rolled the dice and F’d up royally and fatally.
FAA was gamed, but If you think Boeing would self regulate, I think you are on a different timeline where stockholder dividends are not the prime directive.
I understood his argument as: regulation is rigid and some regulations end up pushing things towards a bad ending, because actors in the real world don't always do what regulators imagine they will do. Eg the total costs of recertifying the plane are so high that it's worth it (for the company) to roll the dice to avoid it.
This isn't about whether more or less regulations should exist or not, but how we can build better administrative systems. When the regulations create an environment where only one or two mega-companies like Boeing can exist, combined with pretty much any democratic system where said company can have a direct influence on both the regulatory agencies (often through staffing via knowledge gaps in industry/academia where those in the company often are the only ones who know enough to make the policy) and policy making itself by elected officials in favour of just the current company not the future.
Simply put, the definition of 'failure' of a regulation needs to be broadened. Regardless if it reduced deaths by the company itself in the near term, if it adds long term risk to deaths/accidents in the future by encouraging regulatory capture and eliminating any competition but Boeings to exist - we are worse off as a society, period. The only option we are allowing is some pseudo-market mega-corps with monopolies and the mediocrity in both service and safety or public gov run companies (which do make sense occasionally, but rarely).
There's a few solutions I can think of here which isn't "all regulation is bad" or "lets only have mega corporations in every market via poorly designed regulation" or "let gov nationalize the markets":
a) Contextual oversight. Allow a certain level of freedom at the lower tiers of markets so a future competitor to Boeing can exist and challenge them on everything from prices, to technology, customer service, and safety (which yes is a massive competitive advantage, ask all the people who now refuse to fly in Max, what other options do they have? A single European version of Boeing?). While allowing the courts to expunge any company that sacrifices on safety or any other externality via tort laws, liability, via stronger consumer and property rights.
b) Constant pressure on regulatory agencies (possibly by an outside agency) to look for regulatory capture within agencies and severely punish civil servants and companies engaged in any backroom deals, creating policy/incentives which are barriers for competition with little/zero benefit to citizens, punishing companies for obvious lapses, etc.
c) Stop politicians from anointing themselves job creators and promoters of businesses. They should strictly be in an administrative role when absolutely necessary (to eliminate any forms of violence, coercion, externalities that courts can't handle, etc). This is the biggest source of the worst of a) and b).
When politicians think their job is to 'create jobs' themselves by creating monetary/policy incentives for companies, this inherently create incentives for kickbacks to politicians and moral hazards for companies, and therefore should not be the job of politicians period. The only "help" to companies should be to help get out of the way by eliminating useless policy OR streamline necessary administrative systems. Otherwise don't help them at all.
Companies should not be able to buy success and maintain success in markets (by that I mean monetarily regardless of behaviour or outcomes) by having influence from politicians. All policy should be neutral of company size (or tiered based on size, the way modern rent control has tried to stop disincentivizing new lower income buildings by not applying to new developments) and factor in small firms who can't afford a team of lawyers or checkbox checkers.
They might not 'like' it but they might not care enough as long as the stock goes up and the dividends keep flowing. The regulation should be there to prevent the erosion of certain boundaries, the eternalization of certain costs and the eventual public recovery of the profits.
Like most of the neoliberale 'economic theoretical models', the idea that the regulation is fully separated from the arena of the competition and thus cannot be captured and coopted is so ludicrous it begs the question how it ever became more than a joke in a b-list standup comedian's backup repertoire.
In theory, all regulations need to be carefully considered and walk a fine line in order to do more good than harm.
But I was replying to a pair of comments talking about the practical history of regulations over the past few decades. That history diverges wildly for the two types of regulation. Economic regulation was massively lightened, resulting in huge benefits. At the same time, safety regulations for airplanes and cars were massively increased, also resulting in huge benefits.
So, yes, the whole point is that “regulations good/bad/anything” is nonsense, as the recent history of economic and safety regulations illustrates.
What I'm getting at is that the types of regulation don't really have anything to do with it. It's not that all safety regulation is good and all economic regulation is bad (though if you wanted someone to disprove "all economic regulation is bad" you might be in for a wait). You can screw up safety regulations just as bad if you're not careful.
It's also difficult to evaluate these things based on statistical trends, because it's easy to pass a safety regulation that e.g. mandates a specific safety method, and then you get an immediate safety improvement by making that state of the art method universal, but as time passes that ossified requirement becomes stale and prevents newer, better methods from replacing it. And all you see in the numbers is the improvement from the original mandate spreading through the installed base over time, not the comparison to what would have happened when something even better was invented a year later but was prohibited by the rule from being deployed. (As evidence for this, the original 737 was introduced prior to the moon landing.)
It's also problematic to look only at the one target. If we improve aircraft safety per mile but only by making aircraft more expensive (or destroying competition, which does the same thing), that makes flying less competitive against alternatives that are much more dangerous, like driving. So you can get a safety improvement on paper even though the result is more people are killed.
That doesn't mean you can't make a rule that actually improves safety, but it's harder than it seems to get it right.
Sure. I’m just saying that the actual history of the past few decades in the US shows a stark contrast with these two types of regulations in terms of how they worked and the consequences they had.
Regarding measures that appear to improve safety but are actually a net loss because it encourages driving instead, the FAA does evaluate regulations this way. For example, this is why infants aren’t required to be in a child seat and are allowed to just be held by a parent. They determined that this requirement would cause more families to drive due to the extra cost, and the result would be a net loss of life.
>In theory, all regulations need to be carefully considered and walk a fine line in order to do more good than harm.
Yes, and one of the possible definitions of a (technical, safety related) regulation is "the added cost that the society is reasonably willing (or capable) to pay for a reasonable increase in safety"
The issues always revolve around how much the "reasonably willing to pay" is and what is the corresponding "reasonable" increase in safety (and how exactly to measure the latter).
Safety regulation might be a burden for aircraft manufacturers, but it is what enables competition among airlines. The reason we can have low cost airlines are because safety isn't really in question. Of course you want to "optimize" regulation, but deregulation as in leaving it up to the participants frequently can't support a competitive market.
It came about through short shortsightedness. The path they chose was in fact more expensive than the recertification cost. But even Boeing had come to dislike the regulatory paradigm they helped to create. I think most people are framing the regulatory paradigm as needing to revert to what we had, because clearly less regulation resulted in multiple bad outcomes.
Based on available reporting, Boeing chose this path not to avoid higher cost, but reduced time to market to compete with Airbus because, again, shortsightedness, lack of innovation and planning, and even lack of imagination that their competitor would do exactly what they did, and had no contingency and no response for ~9 months after the Airbus 320neo announcement.
I also can't take seriously any complaints about lack of competition in the U.S. market when it's so docile about competition law. The 1960's merger of McDonnell and Douglas is questionable, but the 1990's merger of McDonnel Douglas and Boeing directly lead to the loss of any remaining domestic competition in transport category aircraft. U.S. regulators are tacitly saying this is a natural monopoly, and yet should be regulated as if it's a competitive market.
Yeah, Boeing have made real clowns of themselves here.
> I also can't take seriously any complaints about lack of competition in the U.S. market when it's so docile about competition law. The 1960's merger of McDonnell and Douglas is questionable, but the 1990's merger of McDonnel Douglas and Boeing directly lead to the loss of any remaining domestic competition in transport category aircraft. U.S. regulators are tacitly saying this is a natural monopoly, and yet should be regulated as if it's a competitive market.
You're discounting the competition between Boeing and Airbus. They're clearly not a monopoly.
That said, it's possible to have two sets of bad rules at once, and it's even worse in that case. Then you get antitrust regulators approving mergers while industry regulators impose high barriers to entry, so that you get high consolidation with no way to break it because no one new will ever enter the industry.
Sadly that seems to be the status quo in multiple industries now. You have antitrust approving any merger that doesn't result in a literal monopoly even if there are only two or three companies left, meanwhile those companies practically ask the government for regulations that make sure nobody else can ever come up behind them because it takes a nation-scale company to survive the compliance costs.
Airlines are forced to certificate their pilots for the plane they're going to fly. How many lives have been saved by this regulation, in comparison with those which were lost because Boeing tried to cheat at said regulation? Ignoring that is the same as pointing to people killed by airbags, without considering those saved by them.
One example of a third way would be that when a plane is 97% the same as one you're certified on, have something between no and full recertification which is only 3% as time consuming because it only covers the differences between the planes instead of going back to square one.
I think you are also guilty of over constraining the solution space ... airlines want a new more fuel efficient plane with a certain size and passenger carrying capacity. Building a new plane for this need either involves training pilots on this new plane type or inherently unsafe engineering to deliver the new product without requiring the pilot retraining expense.
You suggest that we should sacrifice the rigor of pilot training to allow delivering planes without safety compromises ... I think there’s absolutely no justification for safety compromise in this scenario - the new plane will pay for retraining costs in a slightly longer amount of time than it would’ve had retraining not been required — oh well. That’s the cost of doing business and it’s absolutely without doubt that in this case - designing a plane that wasn’t inherently flawed would’ve been a better strategy for Boeing and for all of their 737 Max customers ...
The real question to learn from this tragedy is not how can we make it slightly less expensive to produce a new air frame — it’s how can we ensure that safety is not allowed to be compromised during the design phase of new passenger aircraft in service of _truly_ minor cost savings ... if we had a real regulator that was not captured - they should’ve had the flexibility to say no to the 737 Max very very early in the proposal process — and if necessary they should’ve been allowed to offer a tax incentive to offset some of the pilot retraining cost required by them not budging on safety requirements.
Building and deploying safe airplanes into real world use is more expensive than building unsafe airplanes — but that doesn’t mean it’s not worth the cost to society...
I'm all for having good regulations. The dichotomy comes from those which say that all deregulation is good (which implies that all regulation is bad).
In this specific case, though, I suspect that measuring the "X% the same", and what the new training should be, is much more difficult than it looks at a first glance.
> So we have "safety regulations" negatively impacting safety
No we don’t. Other companies have followed the regulations. Boeing chose to value cost avoidance over risk to human life. The owners and management of Boeing are culpable.
> That means removing burdensome and ineffective regulations and having efficient and effective ones.
When we're talking about human lives, there is no regulation too burdensome or inefficient.
And your argument about there being too little competition is a little odd since hundred have been killed in two crashes because of competition.
> It came about because Boeing was trying to avoid the high costs of recertification, so they didn't change things that could have made the plane safer because changing them would have required recertification. So we have "safety regulations" negatively impacting safety by making it move expensive to improve safety than not.
That's absurd! The safety regulations were good, and the reason they didn't work is because the FAA hired Boeing to enforce them and Boeing didn't do so. Boeing only managed to flout the regulations because they fraudulently signed off their own planes as being airworthy. And the only reason Boeing got away with this is because they controlled the people in the FAA.
Your argument appears to be that Boeing cheated to get around the regulations, so it would be better if there were no regulations, because then Boeing wouldn't have to cheat. American capitalists are truly a special breed of human.
"When we're talking about human lives, there is no regulation too burdensome or inefficient."
This is not only not true, it directly contradicts how regulations are evaluated. Regulations are judged at the cost per life saved (or similar metrics), and are rejected if that cost is above some threshold.
I don't find the evidence you provide to back up your claim compelling. Nothing that you say suggests that deregulation is the reason for economic improvement, rather than other things that have also happened over the last several decades, such as the rise of superior technology, the end of the Cold War, or the invention of New Coke.
The first article you cite, about delivery companies, is from an industry publication. Naturally, they're going to advocate things they view as beneficial to the industry.
Your claim that deregulation is the cause of electricity prices plummeting, and that the regulated side produces more cost, are wholly unsubstantiated. Even if there was substantiation of the trend, that doesn't mean one caused the other.
Likewise, according to the article you cite, there's now _more_ regulation in some areas of the airline industry, like security. Maybe _that's_ why fatalities have decreased. (I don't actually believe that, but it's equally plausible.)
Objective views of numbers and long-term trends are meaningless in the absence of an effort to understand the causal relationships. Correlation does not imply causation. Compelling evidence that deregulation provides economic benefit requires an evidence-backed explanation of _how_ it has done so.
Edited to address your edit re: the Internet as an industry: Again, it's the same issue. You don't present any evidence that the Internet being unregulated is the reason it's successful - or even a contributor. And the scenario you propose about ad regulation isn't anything like the kinds of actual regulations that have been proposed, like net neutrality.
It's not untrue. It depends on the industry and circumstances. But to make a blanket statement either way ends up in a misrepresentation of whether deregulation is good or bad.
For example there have been numerous financial crisis over the years, generally in the wake of the financial industry deregulation.
The deregulation of carriers in 1996 (Telecomm Act) helped spur some competition within known telecommunication products (mainly wireline) but was unknowing of the new and emerging markets. Which is part of the problem with deregulation of moving markets.
I think, however, many have a perspective that deregulated industry often creates monopoly. Healthcare, telecommunication, search, retail, etc are all monopolized by a select few. Is there still small, heel-biter competition? Sure. But DigitalOcean isn't a worry for AWS, GCP or Azure. It's a facade of competition in the "open" market.
As stated:
> There is a reason anti-deregulation screeds focus on isolated incidents and are heavy on narrative. Objective views of numbers and long term trends make the situation look far more rosey.
This isn't the the case of regulation strawman argument. Financial markets were plundered by greed in 2008 due to deregulation. That isn't an "isolated incident". Almost nobody spent time behind bars for the actions of those who abused it. And we know that it wouldn't have taken place with proper regulation and oversight.
Regulation of safety is paramount. Auto manufacturers didn't buy into providing the 3 point seat belt as standard equipment until they were forced. Deregulation isn't a silver bullet, but in many cases it plays out as a zero sum game. Many people lose and many people gain. It's often a vehicle to shift power and wealth as history so directly has shown us.
The assertion to which I’m replying is: “Deregulation never seems to result in more competition, just more consolidation and more and more powerful companies with increased lobbying powers and personal connections to top government officials.” That is clearly untrue.
To use financial deregulation as an example. Yes, the 2008 crisis was bad. But on the whole, are people still worse off? When my parents bought a house in 1989, their interest rate was multiples higher than I’m paying now. One of the things that caused interest rates to collapse was securitization. Moreover, the boom times of the 1990s was also partly due to the financial system. It was deregulated banks that provided the private capital for the first tech boom. And, this website covers an industry that resists regulation at every turn—its bankrolled by investors largely free of regulations applicable to investors managing retail deposits, and numerous companies stay private to avoid public company regulations. What is the net cost-benefit from financial deregulation over the last 30 years, accounting for both benefits and costs? Pro-regulation folks never look at it in those terms.
There is no doubt that deregulated markets are leas predictable than regulated ones. Regulation can smooth out the boom-bust cycle. Thus looking at busts, instead of long-term trends, is a convenient way for pro-regulation folks to distort the overall impact of deregulatory measures.
> Yes, the 2008 crisis was bad. But on the whole, are people still worse off? When my parents bought a house in 1989, their interest rate was multiples higher than I’m paying now.
In 1980, Congress passed the Depository Institutions Deregulation and Monetary Control Act.
> Moreover, the boom times of the 1990s was also partly due to the financial system.
So surely you remember the tech bubble then and all of the consumer loss. One snippet to jog your memory: "Pets.com stock had fallen from its IPO price of $11 per share in February 2000 to $0.19 the day of its liquidation announcement." [0] I'm sure there were plenty of consumers who bought into that company under false pretenses.
> Thus looking at busts, instead of long-term trends, is a convenient way for pro-regulation folks to distort the overall impact of deregulatory measures.
What about if we flip that around, maybe... Looking at falsely inflated markets, instead of real earnings and growth, is a convenient way for pro-deregulation folks to distort the overall impact of regulatory measures.
Get rich schemes are unfair to the unknowing victim. There are more parallels with many of the questionable financial vehicles and products that turn up when no rules are in place.
Interest rates now are incredibly low because central banks are keeping them low in the aftermath of the 2008 crisis. But the fact that our economies need such incredibly low interest rates to generate growth isn't good at all. What will they do with the next crisis? Go negative?
You're right about next-day air freight (which is a thing that exists now that is insanely expensive), but you're wrong about Amazon using it. Amazon has warehouses all over the country. When you buy something that arrives the next day, it's not going in the air at all; it's coming in a truck from a nearby warehouse to your local package distribution center, and then going out for local deliveries.
True cross-country air freight can easily cost >$100 to ship a small package weighing a single pound. Nothing you buy online is using this service unless you're paying out the wazoo for it.
Where do you get the $100/lb? Just extending it to passenger flights, a cross country trip costs $250 (LA to NYC) and most passengers are > 100 lbs, so it’s $2.50/lb for even the most expensive passenger. Last/first mile from the airport to the pickup and delivery site will add to the package cost, but I’m just wondering where you get the $100 figure.
They didn’t say $100/lb, they said a package as small as a pound would cost $100+, that cost would’t scale linearly with weight but it might with box dimensions, similarly to how a single heavier person doesn’t cost more in passenger airlines but multiple people(seats) do.
Also, for an apples-to-apples comparison, try buying that cross-country plane ticket 2 hours before takeoff.
You don’t even have to take their word for it, you can get an instant quote right now from the freight companies (most places that aren’t amazon-scale probably pay about 30-40% of that retail rate)
I didn't say per pound, I said for a single pound package (in shipping, the first pound is by far the most expensive). I got that figure by getting an actual quote for sending a package over night from NYC to SF. Feel free to play around on the UPS and FedEx websites; you'll see similar figures.
Also, the passenger thing isn't remotely comparable because last-minute plane tickets aren't that cheap, and you're forgetting to account for the 12+ hours of labor involved in sending a mule along with your package. If you already had someone going there and back that day anyway, sure, sending the package along with them would be cheaper than sending it through UPS Next-Day. But if not, just sending the package will be way cheaper.
> We’ve been undergoing a 70-year long period of deregulation
This is incorrect. Deregulation only started in the late '70s. There was adequate oversight and anti-trust enforcement until then. The unusually high growth in that period was during an _expanding_ government role (and wider union membership and 90% tax rate for the extreme brackets). Since the 80s, GDP growth has slowed to low single digits with continuously rising inequality.
>In the electric industry, deregulation...
Deregulation in this area also resulted cutting of power to tens of millions as blackmail for orders of magnitude higher rates until the state stepped in again.
And while initial deregulation of airlines has had many advantages, stifling the already inadequate oversight from FAA and thinking it will produce better out comes is literally fatally flawed reasoning.
> The unusually high growth in that period was during an _expanding_ government role (and wider union membership and 90% tax rate for the extreme brackets).
And also during a unique period in history, when the US economy was the only one in the world not devastated by World War II and when there were huge new markets opening up that made corporations willing to pay high wages and taxes in order to capture market share. By the 1970s that was ending as markets saturated and other countries rebuilt their economies and caught up.
Absolutely true. I was just dispelling the alternative history where the depression was due to over regulation and the post war boom was due to removing regulation.
And incidentally dispelling the idea that, where necessary, adequate oversight does not kill an economy.
Not a single point you made addressed what you replied to. They never said deregulation was bad for service or prices. It's bad for competition because it has been proven consolidation wins out, especially in Texas, by AT&T, American Airlines, NRG, etc.
I work for a large company whose goals are not only to become largest, most profitable, and never lose money ever again. But also, to gain strategic ownership where ever possible by acquisition.
Well, that is exactly to be expected and is exactly what is predicted by economic theory: Markets only actually function under regulation, unregulated markets lead to monopolies or monopsonies.
This may be true in US aviation industry (regulation is too weak) but certainly not applicable for supporting a blanket statement like "Deregulation never seems to result in more competition" above.
Deregulation is often a key to more competition. The change in telecom industry in Western countries between approximately 1985 and now is a great example. The evolution of Internet and mobile communications could not have happened with the regulatory framework, institutions and practices of 1985.
There can be too little regulation. There can be too much regulation. There can be wrong kind of regulation.
> There can be too little regulation. There can be too much regulation. There can be wrong kind of regulation.
Fully agreed. All markets are constructed, all markets are regulated — even if only by the existence of a court system for resolving disputes. But it is a difficult task to craft minimal regulation which fosters enduring competition and forestalls the natural tendency of markets towards monopoly, monopsony, and other varieties of market failure.
>Deregulation never seems to result in more competition
Deregulation won't result in more competition when there are big players that can use their money for advertisement, consolidation, buying smaller competitors, cartels, and so on.
What can result in more competition is regulation that favors competition. Breaking up behemoths after a certain size (a la AT & T) is one good way...
This does not look like deregulation, but corruption: having FAA regulate, but delegate to Boeing to "self-control". Like building prisons and asking convicts to guard themselves. I think I saw similar stories about FCC, but with no people dead as a result.
When has the US gov ever moved away from the pseudo market of mega firms anointed to succeed like Boeing in the last few decades?
After the financial crisis the regulations added only further excluded small firms from the banking market because they had ridiculous rules meant for mega banks applied to all banks. So why wouldn’t all the small banks just sell their firms to the big ones?
“Too small to exist” is the reality, not simply “too big to fail” (aka too well connected to fail). Now we only have 5 mega banks further entrenched. Aircraft manufacturer market is even more limited (the incident with Canada’s Bombardier vs US Boeing showed everything you need to know about that ‘private’ market).
I’m not sure what fantasy world people live in when they talk about deregulation of these markets as a common phenomenon, especially airlines, finance, health care, telephony etc (all of the worst industries for consumers in the US, which I should note has nothing to do with the value of public gov run markets which these are not). Absolutely none of those have less administrative oversight than a few decades ago. I guess they listen to politicians instead of any indicators from the market place or history.
If the ‘deregulations’ all further entrench the massive companies, while leaving all of the barriers to entry for the small firms. What outcome did you expect? More competition between the 3-4 mega companies that remain? Is that how we were supposed to benefit from competition?
Some things are better many important things are worse. Consumer goods are doing well, and are high quality where regulations are intact, the good can be trivially inspected on purchase, or reputation provides enough of a backstop to prevent quality decreases. That's the upside of capitalism.
On the downside, many people are underemployed even in a so-called tight labor market, fewer and fewer people own anything like a house or car and are highly indebted. Few people have any savings whatsoever and the administration in conjunction with the monied classes seeks to strip whatever protections remain while scapegoating immigrants. Additionally, the US and the west appear to be better off than they are because we use the power of our military, monetary system, and relationships to make sure items are produced cheaply overseas with negligible labor protections resulting in abusive labor conditions.
Also, the planet is dying due to unlimited resource extraction.
The depressing truth ... how do you deal with it? I’ve been going through depression cycles — sometimes I can ignore the depressing nature that comes from holding an inherently non-positive expectation for the future as basically my best attempt to rationally assess the present and predict the future from it — ignorance is bliss? - but sometimes I embrace that most rational perspective as the “most likely source of truth” and promptly get incredibly (deeply) depressed ... to the point where i can feel myself faking “normal” interpersonal interactions and struggling against the fact that most or all locally true reasons for a hopeful outlook basically pale in comparison to the macroscopic reasons to be non-hopeful ...
It’s deeply sad to know that future generations won’t have as much opportunity as I had to enjoy life ... but to pity them will feel patronizing to them - and so what is left for them to know of me and me to know of them ...?
Dear citizens of the future, know that some of us are sorry for how your life will go — and know that some of us are not for they got theirs before you arrived and that was enough for them ... for some of us this wasn’t enough - we lived your pain in our imaginations while enjoying a physical life of abundance that, in the end, has helped you in no way at all ...
Consumer goods is great, things nobody really truly needs except to satisfy a missing dopamine hit from no longer really being engaged in society, nature, and life, only living an image, an appearance, existing only as a commodity.
Just about everything else is worse though. Wages stay the same while costs rise, markets continue to monopolize and we get fewer choices.
If deregulation were to remove barriers to market entry for small competitors, it could. But big businesses are among the first to demand regulations: a. so they can say they were fully compliant, as a kind of certification and absolution by their sovereign; and b. so they can erect barriers to competitors.
The vast majority of law and regulations in the U.S. are written by industry trade groups, lobbyists. A huge part of the media depends on the massive advertising component of lobbying, both direct and what lawmakers end up spending to reach constituents.
We're way past time to take this seriously, but alas most conservatives had exactly zero problem with Citizens United, actively arguing in favor of the idea that corporations are persons, that money is speech, and corporations have free speech too and therefore can spend essentially unlimited money in the political system via advertising their positions totally disproportionately to the intent behind individual free speech. What we have now is an aristocratic concept, more money more speech. More money, more say. More money, wider broadcast of opinions and propaganda.
Individuals should be having these conversations and debates using critical thinking rather than inundated with corporate talking points delivered into our lives via devices that we pay for.
I think a company can issue unlimited press releases saying whatever the company wants to say. But the amount of money they get to spend on political, policy, and perhaps even social advertising, should be limited.
> I think a company can issue unlimited press releases saying whatever the company wants to say. But the amount of money they get to spend on political, policy, and perhaps even social advertising, should be limited.
The foundational problem is this. Media companies like CNN and The Wall St Journal are corporations and their business is talking about politics. What does it even mean, then, to restrict how much money they can spend on it? How do you even measure the value of being able to choose which anchor with which viewpoints gets which timeslot, or which story goes on the front page? Or being able to just not report on stories (like media consolidation) that they're not interested in people knowing about?
But if buying a TV network to get airtime for your viewpoint is speech then so is buying airtime from that TV network.
The solution to this isn't to restrict corporations from saying things. It's to make sure that everybody else gets to say things too. So that's things like public financing of elections, and decentralized social networks (in the style of email) so that nobody gets to gatekeep information.
Make it cheaper to reach voters without corporate sponsorship and you erode the corrosive utility in corporate sponsorship. Making it more difficult only does the opposite and makes it worse -- nobody wants Zuckerberg to have the power to determine the President with an algorithm.
> How do you even measure the value of being able to choose which anchor with which viewpoints gets which timeslot, or which story goes on the front page? Or being able to just not report on stories (like media consolidation) that they're not interested in people knowing about?
The value of that should be zero, because the rational response of individuals in the situation you describe (which is basically the situation as it is now) should be to simply stop watching and listening because the media have proven themselves untrustworthy.
https://www.travelandleisure.com/airlines-airports/history-o...
https://m.aviationweek.com/blog/law-changed-airline-industry...
https://www.theatlantic.com/business/archive/2013/02/how-air...