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Regulate Industry or Trust the Free Market?

I hate to fly, so these news reports about faulty wiring and grounded planes scare the crap out of me. On one hand I’m relieved to know that the FAA is waking up from an eight year snooze and forcing airlines to address the problem. On the other hand, what the hell have they been doing all this time?

According the NY Times, “Congress’s stance toward the industry has shifted from benevolence after the terrorist attacks…to a more combative approach.” Turns out the FAA has been giving the airline industry a free ride in deference to lost profits after 9/11.

This points to a fundamental argument about the function of government in our society. Should government “back off” and trust businesses to self-regulate? Or should government soften the edges of the profit drive, making sure that planes don’t fall out of the sky?

There’s a natural antagonism between businesses and consumers, just like the natural antagonism between workers and bosses. The airlines want to make money. I want to survive my flight. I can’t go out and inspect every plane before I put my seatback in an upright position, but the FCC can. That’s the power of government when it’s organized to serve the public good (don’t those airline execs travel their own planes now and then? Talk about willful self-deception in the face of profits.)

Here’s the bottom line: We’ve had a generation of deregulation, starting with the conservative ascension under Reagan in 1980 who declared that “the era of big government is over.” That really meant the end of the New Deal which – along with the once-mighty power of organized labor – had created the greatest distribution of middle class wealth in American history, if not world history. Wasn’t perfect, a lot of people were still left out, but we were on our way.

So take a look around at our crumbling infrastructure, at the healthcare debacle, at the mortgage crises, at energy costs, at the middle class squeeze and the expanding working poor, at the massive economic growth of the top income earners, at media oligopoly, at the revolving door between industry and regulatory organizations at the FDA, at the FCC, etc. etc. and ask yourself: Are we really better off with deregulation?

So back to the airlines: They’re fixing the wiring problem, finally. Makes you wonder what other regulations are being ignored. Think about that self-regulating free market the next time you step onto an elevator. Going down?

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April 11, 2008   |  Filed Under Political   |    Permalink

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