Penny-wise and pound-foolish - Congress and the FAA reauthorization bill

I am pleased Congress reached agreement on the debt limit. I understand it took priority over all other legislative matters for the past few weeks. I also understand there are philosophical reasons to debate the budget for the Federal Aviation Administration (FAA). I do not understand why Congress would take a recess before addressing the FAA reauthorization. A temporary extension until Congress reconvenes seemed a reasonable compromise. Instead, the government cannot collect federal airport taxes, the FAA furloughed 4000 employees, and many airport construction projects are on hold. Has anyone noticed the economy is weak and tax revenues are down? President Obama correctly characterized the situation as "another Washington-inflicted wound on America."

The Green President

If you wonder whether the Obama Administration has a green agenda, the answer was obvious at the G20 summit in Seoul, South Korea. Headlines spoke of how other countries view the Administration's economic policies as out of line. Take a look below the headlines. The trade agreement between the U.S. and South Korea remains stalled. The reason is South Korea refuses to relax its emission and mileage standards so U.S. automakers can more easily adapt their cars for the Korean market. Yes, the U.S. asked the Koreans to lower their environmental standards. One could argue the President is willing to compromise on his principles, to account for what the American people conveyed at the polls earlier this month. Without solid economic growth, electoral support for "change" is unlikely, so he had to compromise to be able to sell more American-made cars in Korea. Does anyone believe in the short-term South Korea is going to be a major market for American-made cars and save American jobs? More realistically by keeping the barriers to trade higher than would be the case with a trade agreement, the Administration is hoping to keep more Korean cars from selling in the U.S. and save UAW jobs. Even this is flawed logic because the way around the barriers is to produce the cars in the U.S. at sites likely not to support the UAW.

The Administration's actions appear simply to be political payback for the support from the UAW. Yes, the Obama Administration has a green agenda - keep the green dollars flowing into the political campaign war chests.


References:

Richardson, Alex. "Factbox: Outcome of the Seoul G20 Summit | Reuters." Business; Financial News, Breaking US; International News | Reuters.com. Ed. John Chalmers. Reuters, 12 Nov. 2010. Web. 14 Nov. 2010. http://www.reuters.com/article/idUSTRE6AB1G920101112.

Griswold, Daniel. "President Obama Represents UAW Rather Than U.S. in Korea Trade Talks | Mad About Trade." Mad About Trade | Observations on Trade, Globalization and Immigration. N.p., 12 Nov. 2010. Web. 14 Nov. 2010. http://madabouttrade.wordpress.com/2010/11/12/president-obama-represents-uaw-rather-than-u-s-in-korea-trade-talks/.

Government and the Index of Economic Freedom

The Index of Economic Freedom is composite of ten economic measurements created by The Heritage Foundation and The Wall Street Journal. Its stated objective is to measure the degree of economic freedom in the world's nations. [reference 1)] Essentially these boil down to a composite measure of: a) good government; and b) less government.

The Baseline Scenario blog posted an article from StatsGuy [reference 2)], arguing contrary to its usual interpretation the Index of Economic Freedom does not support the position that less government is a good thing. Instead, StatsGuy outlines statistically how the Index makes the case for clean, non-corrupt, efficient government. I am not certain I agree with the logic espoused, but the conclusion seems reasonable. Unfortunately, it is naïve to think any large bureaucracy, especially a government, can avoid being anything but dirty, corrupt, and inefficient. The Deepwater Horizon Incident, okay, instead of labeling it what the federal government insists on, I will call it what it really is - a Disaster, is evidence of the ineptitude of large organizations, private and especially governmental, even when well-intentioned. Ronald Reagan over simplified when he said "Government is not a solution to our problem, government is the problem." [reference 3)] Nonetheless, he was far closer to what I see as reality than those who see government as a solution.

References:

1) http://en.wikipedia.org/wiki/Index_of_Economic_Freedom

2) http://baselinescenario.com/2010/05/27/heritage-index-good-government-vs-less-government/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+BaselineScenario+(The+Baseline+Scenario)

3) First Inaugural Address, 20 January 1981

Carrying On

I traveled this week. Both flights we were delayed as people boarding in the last groups brought on luggage for which there was no overhead storage space. As the people last to board are disproportionately seated in the back of the airplane, it takes inordinately more time to transfer the luggage up to the crew at the front door to be checked. One airline, Spirit, has incentivized passengers not to carry on their luggage. For this sensible move, the airline is being vilified. New York Senator Charles Schumer stated "Airline passengers have always had the right to bring a carry-on bag without having to worry about getting nickeled and dimed by an airline company" [reference a)]. Since when did a carry-on bag become a right? Let alone that it become one for which no charge is associated? If an airline prohibited me from carrying on my laptop, I would not fly on them. If enough people took the same position, the airline would change its policy. A solution without the government's involvement. By the way, Spirit is not going to charge for laptops or personal items or strollers or cameras or diaper bags or reading materials or any other personal item that is fitted under the seat [reference b)].

Why would the federal government insert itself into something for which it is unnecessary and at best a stretch of the intent of the Constitution's Commerce Clause (Article I, Section 8, Clause 3)? I suggest there are several answers. First - power. They do because they can and sometimes it makes our so-called leaders feel good they are doing what they think is good for us. Eroding the power of the people on minor matters such as this allows for further erosion down the road on items we would otherwise find unacceptable. Second - elitism. Whether they have read The Republic or not, I suspect they see themselves as The Guardians, the elite wise enough to make the appropriate decisions the masses are unable to make. Third and most importantly - money. The big bad airlines, or at least Spirit, has found a way to charge the consumer without giving a cut to the federal government. While it may be appropriate for the Secretary of the Treasury not to pay all the taxes he owes - tax evasion, it seems unacceptable for Spirit to use the regulations and legally not pay taxes on a source of income - tax avoidance. Here is what I believe is the root of the matter. In a revision to a federal rule written in January, airlines can exclude from their taxes fees earned on things deemed unessential to air travel [reference c)]. Senator Schumer suspects Spirit will lower their ticket price by the cost of the bag fees, and only pay taxes on the remainder. While I doubt Spirit will do that, I applaud them if they do. Why did the government revise the rule if it did not want the airlines to act upon it? If the government deems it is necessary to intervene, then why not simplify the tax code or require all fees and taxes be included in the price of a ticket so consumers can compare our flight options? Oh, I forgot, I am not a Guardians, therefore I can not be expected to understand the nuances and wisdom of the government's direction.

Senators Schumer (D, NY), Menendez (D, NJ), and Cardin (D, MD) have said they will pursue whatever measure works best if airlines do not relent [reference c)]. The bully pulpit seems to work as American, Delta, JetBlue, United, and US Airways have agreed not to follow Spirit's lead [reference d)] and consequently decrease the number of checked bags and increase the delays and commotion on our flights.

References:

a) http://www.nypost.com/p/news/local/chuck_to_carry_on_vs_bag_fee_JN54gm5XPohAVqcxKCLenJ#ixzz0m8ENbkPX

b) http://www.spiritair.com/Policiesbags.aspx#CarryOnBag

c) http://www.nydailynews.com/blogs/dc/2010/04/schumer-offers-bill-to-bag-car.html#ixzz0m8Kwi6o

d) http://www.newser.com/story/86345/5-airlines-agree-not-to-charge-fee-for-carry-on-bags.html