Deregulation... > -sigh-

-sigh-

[Insert sarcasm] Geez, price deregulation never hurt the airline industry, did it? Flying on an airliner operated by a carrier in the red is good for the consumer, right? EVERY airline carrier in the US (except for two) was operating at a loss in the boom days of 2001, 20 plus years after deregulation. The rates were regulated many years ago to prevent this, but I guess congress figured human nature had changed when they decided to deregulate. Here's another exciting deregulation fact - that big tractor trailer load of gasoline or propane behind you on the interstate? His industry profit average is 1.89% since deregulation. His company is one the the lucky few of the thousands that has not yet filed for bankruptcy. Happy motoring!

reply to Marilla
Uh...this is America. You can disagree if you like. I know it's probably easier to fling dismissive labels, but you know....actually saying why you disagree is helpful.

reply to Grumpy
Yes, yes, assuming all those things you say are correct (and I trust you) the reason the airlines were operating at a loss and the tractor-trailer industry has such a measly profit (I thought profits were eeevil?) is because deregulation generally increases competition and when that happens, windfall goes away and the prices are cheaper for the consumer. Are you suggesting that congress should make a law re-regulating the shipping industry higher profits and making consumers pay a higher price? Why not just pass a law that every citizen has to give a trucker a quarter—they'd be rich then. (Whoops, the rich are eeevil too ).
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"You cannot separate fools from their foolishness, even though you grind them like grain with mortar and pestle" (Proverbs 27:22).

...and it's one heck of a lot cheaper to fly now than it was in the 1970's, taking inflation into account. That's largely due to the cost cutting inspired by competition from discount airlines.

Airline deregulation has been an unquestionably good thing, unless you were/are an airline monopolist or someone with an unlimited travel budget.

Yeah, we can all pine for the "good ol' days", but we need to remember that airline travel in the '70's was so expensive that only businessmen and the rich flew much. Cheap family travel by air just didn't happen.

Calvoiper
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VoIP--the death knell of remaining voice monopolies!

reply to Marilla
I agree that airline travel was very expensive. It still is, for the airlines themselves. If anyone is comfortable traveling with trucks and planes operating at a loss, then all I can say is, don't whine about it when it's you or yours caught in harm's way. Call me then and tell me how wonderful it is that you saved $100 last year. As far as the trucking aspect goes, I would hope that no one here is naive enough to believe that the consumer ever saw any any direct savings from cheap trucking. The shipper is the only one benefiting.

Pricing structures were originally regulated to prevent the problems of public safety vs. transportation sold at less than cost. Yes, I do believe that we should set minimum prices for trucking. Some of the rates I hear are unbelievable. A truckload from New England to MD for $300. Unfortunately for the motoring public, there are idiots with trucks moving freight for those types of rates. How much sleep do you think the driver that works that cheaply is getting? Enforcement is doing a good job, but they can't catch them all. When pricing was reasonable and regulated, a trucking company's success was based on safety and service - not price alone. Happy motoring.

reply to Minister
I got this one.

First off, I've been reading here at bbr for quite some time and it's obvious that Mr. Bode has a left-wing, perhaps even Marxist agenda. With him its always the eeevil corporation, us-v.-them mentality.

Second, after reading the CSE report I wonder if Mr. Bode read the same thing. Actually I know he did, but he glommed on to the passing mention of the uncertain regulatory environment as a reason to assail the report. (Does anyone disagree that an eeevil business would be hesitant to invest in an area that has uncertainty?) And how does Mr. Bode attack the report? By attacking ad hominem the organization that put it out. It's interesting to note that Mr. Bode has no problem citing non-profit type organizations when he agrees with them. A notable one is his interview with Center for Democracy and Technology here—just who is this group, where do they get their money? and ironically the same day as this news story, he cites an outfit called The Yankee Group here. But a group that has an outlook which he disagrees with gets inspected to see where their funding comes from; because you know, an economist isn't going to actually look at the facts, he's just going to say what his corporate masters want him to say. And is anyone under the illusion that any think-tank, be it left or right, doesn't have large contributors?

Third, the data written about in the CSE report are not from CSE itself. Dr. Brough cites two different reports, with two different methodologies, put out by two different outfits, but reaching the same conclusion, N.B.: that increased broadband deployment would benefit all these states—not deregulation as Mr. Bode says. See how he creates a straw man?

And fourth, on the point of deregulation. Unfortunately for Mr. Bode, the overwhelming majority of economics literature and economists agree that regulation per se is a drag on the economy creating artificial barriers to entry (even a poster in this very thread advocates regulations to raise prices for the consumer). George Stigler is a quite forceful proponent of deregulation as is Gary Becker and last year's Nobel Prize winner Vernon Smith (who has an elucidating article on regulation of the electric industry here). I'd like to see Mr. Bode read and comment on this article—but whoops—where does Dr. Smith get his funding?
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"Lunches don't get free just because you don't see the prices on the menu. And economists don't get popular by reminding people of that." --Thomas Sowell

Two thoughts:

First, uncertainty is a great disincentive to investment. That is the primary reason that the ILECs have fought a never-ending battle in the courts to upset the Telecom Act. With the prices of UNEs in flux, the definitions of UNEs in flux, and now even the availability of UNEs in flux, who is going to invest in a new business? That leaves only the Whining Baby Bells--who have the captive cash flow to be self-funding.

Second, I may seem like a broken record here, but I'll again repeat Alfred Kahn's maxim--"Deregulation does not mean that you fire the policeman." There is a big difference between regulating commerce (active price and route regulation, etc.) and regulating safety or anti-trust issues. Where the ILECs are wrong now (but still convincing too many people) is that they claim they should be free of the remaining regulations under TA'96--when in reality, those provisions weren't meant to regulate commerce generally, but only to protect from and make amends for the long history of antitrust offenses committed by the local monopolies we used to call the "Bell System".

Calvoiper
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VoIP--the death knell of remaining voice monopolies!