Concise summary of what privatized American air traffic control would look like: Amtrak, FannieMae

I wrote a longish post about the idea of the government privatizing air traffic control (at least some members of Congress are still pushing this). But the Institute for Liberty has done a better job:

what we do not support are the creation of entities that are some bizarre hybrid of governmental and private, since these generally contain the worst practices of both worlds (few, if any, of the incentives to innovate or compete, no oversight in how the public actually benefits or how the entity is governed, etc). One need only look at examples like Amtrak, the US Postal Service, or FannieMae and FreddieMac to see just how disastrous these hybrids can be over the long term.

(most easily viewed on SCRIBD)

[Separately, I think it is unfortunate that the analogy comes from an “Institute” that promises to deliver to Americans precisely the opposite of what they repeatedly vote for (i.e., a planned economy and Great Father in Washington taking care of most of their needs). But, nonetheless I think that their analogy might be persuasive to people on all parts of the political spectrum (well, at least those who have ridden an Amtrak).]

9 Comments

  1. Neal

    July 14, 2017 @ 11:03 am

    1

    I think that military contractors or maybe (but hopefully not) CCA would provide a better preview for privatized US air traffic control but point taken.

  2. Vince

    July 14, 2017 @ 12:11 pm

    2

    One interesting about the statement from the institute is that they start their statement with “what we do not support”. They assume that their the Great Father, with readers waiting to hear what they support or oppose. You see this with a lot anti-government freedom and liberty people on the Internet. Instead of making an argument they state what they want or what they don’t like.

    Also, I’ve heard anecdotally that it costs less to mail a letter in America than in many other countries, even those that are much smaller, such as the UK. A quick Google search shows that it’s close to a dollar there, around twice as much as the USPS.

  3. philg

    July 14, 2017 @ 12:59 pm

    3

    Vince: I’m not sure that the USPS stamp price is indicative of the true costs. https://about.usps.com/news/national-releases/2016/pr16_009.htm
    suggests that the USPS is not free to set prices: “Postal Service prices for Mailing Services are capped by law at the rate of inflation as measured by the Consumer Price Index for all urban consumers (CPI-U).”

    http://www.chicagotribune.com/business/national/ct-postal-service-finances-20170209-story.html says “The Postal Service has lost money for 10 consecutive years.” (see also https://about.usps.com/news/national-releases/2014/pr14_031.htm ) http://fortune.com/2015/03/27/us-postal-service/says “American taxpayers give an $18 billion gift to the post office every year”.

    So Americans might end up paying at least as much as UK customers.

    Also, I don’t think the services are comparable. A first-class letter in the U.S. could take a week to deliver. http://www.royalmail.com/personal/uk-delivery/1st-class-mail says that 65p buys overnight delivery of a letter. So the Royal Mail is offering something more like a Fedex Standard Overnight service for $1.

  4. Neal

    July 14, 2017 @ 1:04 pm

    4

    >So the Royal Mail is offering something more like a
    >Fedex Standard Overnight service for

    USPS service area is forty times bigger.

  5. philg

    July 14, 2017 @ 1:32 pm

    5

    That explains why it sometimes takes a week to get a letter from one Boston suburb to another (but usually at least two days). Metro Boston is way bigger than the UK!

  6. Neal

    July 14, 2017 @ 2:38 pm

    6

    @philg: The fact that it “sometimes takes a week to get a letter from one Boston suburb to another (but usually at least two days)” does not mean it is accurate to compare overnight delivery in the UK with overnight delivery in the US.

  7. ZZAZZ

    July 15, 2017 @ 6:41 am

    7

    Hmm, I wonder if it isn’t the case that the USPS hasn’t become something of a subsidy to the private enterprise delivery service because they have to take care of all the low margin bulk delivery and single letter delivery while FedEx and UPS chomp up all the lucrative package delivery. Plus USPS has miscellaneous other burdens like rural post offices, rural delivery, passport processing, and others I’m sure. It is a lot like the way Amtrak for most of its existence subsidies rail freight by relieving freight carriers of providing any passenger service, while leasing locomotives and paying for the right to use the right of ways.

    So many people castigate the government without realizing what a vast collection of private enterprises exist to feed off the government’s carcass. If we really had a small government, it wouldn’t be that the same things get done for less, it would be that many needed and useful things won’t get done at all, and that a vast number of private enterprises would go bankrupt.

  8. randall g

    July 15, 2017 @ 1:47 pm

    8

    Maybe it would end up something like NavCanada. As the owner of a small plane I pay $73 per year for all the ATC I can eat. Commercial services are charged per flight. It seems to work perfectly well.

    On the other hand, American federal bureaucracies seem to have metastasized into monsters that cannot be controlled or their growth slowed. Canadian ones can’t get anywhere near that big.

  9. Smartest Woman on the Internet

    July 16, 2017 @ 5:54 pm

    9

    @ZZAZZ: I wonder if it isn’t the case that the USPS hasn’t become something of a subsidy to the private enterprise delivery service because they have to take care of all the low margin bulk delivery and single letter delivery while FedEx and UPS chomp up all the lucrative package delivery.

    I remember about five to ten years ago, the news was reporting that the USPS was greatly downsizing because email had drastically reduced the amount of snail mail. But the other day, my mail carrier advised me that the USPS was busier than ever because they recently received a huge contract to deliver Amazon parcels. Then she told me she’s looking forward to her defined benefit USPS pension next year after 30 years w/ the USPS.

    After getting sent home from Vietnam after six months of non-combat for having flat feet or something, my secretary’s husband retired after 37 years in the post office (the last two being home on fully paid sick leave), retiring at age 55 on $65K per year pension. That was 10 years ago.

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