Volume 2 Issue 37
March 25, 2003
Fly the Unfriendly Skies!
Bogging down in front of Baghdad, why are we bailing out airline CEO's, and some attempts at humor
So slightly off the war topic today...
The airlines are at it again, whining to Congress and the Administration about how badly they need more government money to stay afloat. In fact, their lobbying group, the Air Transport Association, says that without a bailout, nationalization may have to occur. Airtrak, anyone? Amair? Hmm...
For some reason though, I can't seem to appreciate the airline's concerns, given the way they run their business. I'm all for subsidies for air travel, since no transportation system in history has made money, but we already give the airlines subsidies in airports, air traffic control systems, security (yes, the airline's pay a bit of that, but most of it is the government), as well as the new guaranteed loans offered to them after 9/11. Yet the ATA estimates that the airlines may lose over $10 billion this year, the most in history, and by the end of 2003 we could see most of the major airline companies in bankruptcy or facing liquidation, especially if the war goes poorly, or another terrorist attack takes place in the United States.
So why am I against helping the airlines this time? Simply put, it makes no sense to again and again bail out an industry that does nothing to make itself more stable. For example, Delta Airlines yesterday announced that it would cut their flight schedule by 12%. OK, good cost saving measure, huh? Delta also yesterday announced that last year it paid its CEO, Leo Mullin, 13 million dollars. Now, say what you will about Amtrak, but you can be damn sure that David Gunn (Amtrak's president) is not making 13 million dollars. Did I mention that Delta lost $1.27 billion last year? Unions are also part of the problem, with their unwillingness to make many concessions, but in bankruptcy proceedings companies can get contracts thrown out, so no real federal intervention would seem necessary.
Most importantly, there are airlines out there that are doing well. JetBlue, AirTran, and Southwest all seem to be making some money, though they are also burdened with debt that makes their long-term outlooks bad if anything should happen. The point is that these airlines have a better business model than the other large carriers, from their contracts to their flight schedules and turnaround times. The government should not intervene to stop the normal market process from working and allowing the airlines to keep running a flawed system. During the recession of 1991-92 after Gulf War I, 7 carriers went bankrupt, and 4 liquidated, including stalwarts like Pan Am and Eastern, yet the airline industry seemed fine a few years later, when carriers like United and US Airways (both now in bankruptcy) were expanding routes and buying planes like they were Matchbox toys. Even if some of the larger companies go under, there will still be a demand for air travel, and people will still pay for it, and someone will provide the service. I disagree with those who say that prices would have to skyrocket in this case - yes, prices may have to be a bit higher than they are now, but the airlines making money currently are the ones with the lowest fares!
Having a comprehensive air travel system in the US is important to our security and economy, and the government may have to help maintain that service if terrorism or some other outside force causes major disruptions. But the government should not bail out the airlines for poor decisions made in the 1990's or flawed business strategies. That money could be better spent on helping to equalize our national rail system, which can be an attractive substitute for short and medium-haul airline routes, and which receives only pennies on the dollar to the money we already provide to prop up the airline industry.
Onto today's war blotter:
Target Baghdad: A reporter inside Baghdad says that the Iraqi's are moving into the streets to prepare for house to house combat -
http://slate.msn.com/id/2080432/
Baghdad could end up being a worst-case scenario for the allies -
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/03/25/MN107316.DTL
Bad Sandstorms have slowed the allied advance however, and the storm may last another day or two -
http://news.bbc.co.uk/2/hi/middle_east/2885359.stm
http://www.nytimes.com/2003/03/25/international/worldspecial /25CND-MARI.html
The Siege of Basra: OK, that stuff about not hitting civilian areas? Yeah, um...let's forget that. The British have decided to take Basra by force, designating the whole city as a military target, in an attempt to provide "humanitarian aid" to whoever may survive the coming bombardment of the place -
http://www.nytimes.com/2003/03/25/international/worldspecial /25CND-MILI.html
Why Basra didn't welcome us as liberators...and it's not just because they are still afraid of Saddam -
http://news.bbc.co.uk/2/hi/middle_east/2884769.stm
Nassiriya: Um...what the hell?
"Two days after a first bid to cross the river and the Saddam Canal was blocked by Iraqi irregulars, the Marines laid down a two-mile corridor of armored vehicles and the convoy charged through the streets under cover of helicopter rockets and a barrage of artillery, tank and heavy machine gun fire. Once the trucks and other vulnerable vehicles were across, the tanks and other armor rolled out behind, leaving Iraqi fighters still operating in Nassiriya, a dusty city of more than a quarter of a million, 225 miles south of the capital."
We can't beat 'em, so we just pass them? And now a main body of the invasion force is cut off from their supplies and reinforcements. What the hell are these people thinking? -
http://www.nytimes.com/reuters/international/international-iraq-nassiriya.html
And we're not winning any hearts and minds in Nassiriya either -
http://www.guardian.co.uk/Iraq/Story/0,2763,921393,00.html
Managing the War: Are there enough troops in the theater? Both Barry McCaffrey and Wesley Clark say maybe not. Here's Clark -
http://www.timesonline.co.uk/article/0,,1-623140,00.html
And McCaffrey -
http://www.washingtonpost.com/wp-dyn/articles/A21450-2003Mar24.html
Despite happy pronouncements from the allies, pretty much no place in Iraq is secure, as a traveling group of reporters found out. Is Iraq turning into a guerrilla conflict? A group of British soldiers say it reminds them of Belfast -
http://www.washingtonpost.com/wp-dyn/articles/A19912-2003Mar24.html
Nick Kristof reports that things aren't going well either, but that the military did spend a lot of money on a nice briefing center -
http://www.nytimes.com/2003/03/25/opinion/25KRIS.html
The First Attack: Newsweek discusses how the CIA got the intelligence that located Saddam on the war's first night -
http://www.msnbc.com/news/889577.asp
The POW's and the Geneva Convention: Is the US violating the Geneva Conventions too?
http://slate.msn.com/id/2080616/
And what the hell are the Geneva Conventions anyway?
http://slate.msn.com/id/2080617/
The Aftermath: The US is planning to bring civilians in to run the new Iraqi government as well -
http://www.nytimes.com/2003/03/25/international/worldspecial /25POST.html
The Weapons: So is the Patriot missile really working this time around?
http://slate.msn.com/id/2080615/
The President: Yet another piece on Bush as a wartime leader -
http://www.nytimes.com/2003/03/25/international/worldspecial /25CHIE.html
And this is a disturbing piece from Newsweek on Bush's obsession, from even before 9/11, with taking Hussein out. In fact, according to Evan Thomas, Cheney believes "that war is the natural state of mankind...Great leaders understand this...They are not fooled by Utopian visions about world peace; they face evil and deal with it." I'm scared. -
http://www.msnbc.com/news/889490.asp?0cv=KB10
The Russians: Boy, man them Bushies are good. Just when you think the next war will be in Korea, they come out with one out of left field. Russia! Yeah! The US yesterday accused Russia of selling arms and military equipment to Iraq. Russia struck back by saying that we sell to other countries too, and basically told us to go to hell -
http://news.bbc.co.uk/2/hi/europe/2884895.stm
Jordan: Jordan is doing better than it thought they would so far. The flood of refugees hasn't really happened, mainly because the only gas station on the road to Jordan through the desert has been blown up, as well as the only pay phone. This is a great story...what's a "one camel" village? Is that like a one-stoplight town here? -
http://www.upi.com/view.cfm?StoryID=20030321-023627-5923r
The Budget: In a shocking Democratic victory, the Senate today slashed the size of President Bush's tax cut by more than half -
http://www.nytimes.com/aponline/national/AP-Budget.html
Bill Gates' father on why the estate tax should stay, especially at a time of war -
http://www.washingtonpost.com/wp-dyn/articles/A21781-2003Mar24.html
Look Who's Running for President: The Dems are still out there, though with less fanfare, as they approach the key fundraising deadline of March 31 -
http://www.nytimes.com/2003/03/25/politics/campaigns/25POLI. html
Look Who's Voting for President: Michigan continues to plan to move ahead of New Hampshire in the primary process, and New Hampshire is not pleased -
http://www.theunionleader.com/articles_show.html?article=194 21
Look Who's Voting for President 2: And DC Mayor Anthony Williams signed a bill yesterday to move up the District's primary. Um...why was there like no real article on this in either of the DC papers? I have to go to the Vegas papers for this?
http://www.lasvegassun.com/sunbin/stories/bw-elect/2003/mar/24/032408070.html
Space Shuttle Update: The recovered data recorder may be in good enough condition to be helpful -
http://www.cnn.com/2003/TECH/space/03/24/shuttle.investigati on.ap/index.html
And NASA is considering pushing up the "Orbital Space Plane" and making the shuttle just a cargo hauler, which would allow it to reduce or eliminate the crew -
http://www.nytimes.com/2003/03/25/national/nationalspecial/2 5SHUT.html
The SARS Outbreak: Epidemiologists now say that SARS may actually be more related to the common cold than anything else -
http://www.washingtonpost.com/wp-dyn/articles/A21028-2003Mar24.html
In a setback, the chief health official in Hong Kong has now contracted the virus -
http://www.nytimes.com/2003/03/25/international/asia/25HONG. html
And they want us to bail them out? I think the airline's plea of poverty may have a bit more influence if they weren't paying their CEO's 13 MILLION DOLLARS! Yes, on the same day it cut its flight schedule by 12%, Delta gave it's CEO $13 million. -
http://www.nytimes.com/reuters/business/business-airlines-delta-pay.html
Joke of the Day: Hey, I'm trying to introduce a little levity in here somewhere...I saw this one online somewhere today -
Q. What did the fish say when it swam into a wall?
A. Dam!
Have a great day!
