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Big spenders spot their chance

By Vin Suprynowicz
web posted October 1, 2001

Even the $15 billion "bailout" of the American airline industry following the savage attacks of Sept. 11 is hardly an unalloyed example of economic wisdom and common sense.

Already economically troubled, "Lucky were the airlines to be a convenient and plausible object of pity just as Washington was casting around for a way to seem in charge and armed with bottomless resources from saving the economy," mused Holman W. Jenkins Jr. in his "Business World" column in Wednesday's Wall Street Journal.

"What are our policy makers thinking in handing over our hard-earned billions to airlines without at least some rollback of the huge wage increases and other imprudent management decisions" which had them on the ropes even before Sept. 11, asks former Fortune Assistant Managing Editor Paul Weaver, author of a forthcoming book investigating management-labor collusion in the employee buyout of United.

The perceived problem on Sept. 12, of course, was that one or more airlines might be forced into bankruptcy by lawsuits from the survivors of those who died both on their aircraft and in the Pentagon and World Trade Center on Sept. 11.

Well, don't those survivors have a right to seek compensation for their losses, and let the courts decide whether anyone exhibited gross negligence? Isn't that part of the "American way" we now go to war to defend? They had fair notice. Test after test had already demonstrated the so-called "airline security system" leaked like a sieve.

It's widely reported that federal law makes it illegal for pilots, air crews, and passengers to carry self-defense firearms on American commercial flights -- firearms which could have made quick work of the madmen of Sept. 11. But that's not true. Title 14, Chapter I, Part 108 of the Code of Federal Regulations (Federal Aviation Administration) not only allows virtually any federal or other government employee to travel armed, it also allows the "certificate holder" (airline) to "authorize other persons to carry arms" in free exercise of their Second Amendment rights, providing only that said persons have "successfully completed a course of training in the use of firearms acceptable to the (FAA) Administrator."

Had United and American airlines sought clarification as to which passenger training courses would be acceptable? Would any NRA firearms safety course -- or evidence of past police or honorable military service -- have sufficed? Had these airlines, at the very least, sought approval from the FAA to honor the concealed-carry permits of passengers from states which issue them?

If no readily available safety course has been so approved "by the Administrator," then the FAA regulation in question is probably void for setting a requirement no one can figure out how to meet, one successful local trial attorney tells me. So why didn't the airlines challenge it in court? Might not American and United stand doubly responsible for the fate of passengers whom they arbitrarily and capriciously rendered defenseless despite this federal regulation ... and in violation of the Bill of Rights?

Many airlines have successfully operated in bankruptcy, and plenty of entrepreneurs stand ready to buy the gate assignments and equipment of those that fail. Since it succeeded in saving numerous troubled 19th century railroads -- without government bailouts or takeovers -- through the innovation of "equity receivership," American bankruptcy law has remained the best in the world at protecting firms confronted with unexpected disaster.

So why should these carriers be "let off the hook" rather than allowing the free market to take its course -- creating a strong incentive for their surviving competitors to restore the right of their passengers to go armed, promoting liberty and increased deterrence to criminals at the same time?

(Why is it that terrorists -- any criminals, for that matter -- rarely attack police stations or active military bases? Why has John Lott of Yale discovered that violent crime rates drop markedly in neighborhoods where citizens are allowed to re-arm?)

But of course, it now turns out the airlines were just the beginning.

"Now the insurance industry is asking for a bailout," Mr. Jenkins reports. "The travel agents have put in a request for $3 billion. What about hotels, restaurants, and fishing guides?"

Amtrak, America's struggling subsidized passenger rail line, bellied up to the bar a few days after the terrorist assaults and asked for $3 billion to improve and expend service, and ... oh yeah, that's right, "augment security," as well.

(Americans, regardless of their Ninth Amendment right to travel, will now be asked to show a "government-issued photo ID" before boarding a train. Why? Didn't the Sept. 11 hijackers all have and show photo IDs? Is there a concern that Shi'ite hijackers will now seize a train and take it to any destination other than the one to which its tracks lead?)

After a few days of stunned silence -- how do you issue the rote call for more "gun control" when the terrorists used nothing but knives, apparently pre-positioned by contract caterers? -- Washington's big spenders finally seem to have regained their equilibrium and spotted an opportunity here to fill their own pre-positioned Santa sacks.

In a "spending panic," Congress has "encouraged everyone from insurance, steel, hotels and restaurants to hold out their hands," the Wall Street Journal editorializes this week. "Ideas are also flowing fast to push money for unemployment benefits, raise the minimum wage, and undertake a whole new national effort for schools, roads, bridges and waste disposal."

Are the mullahs of the Taliban really upset with us because the counter clerks at Wendy's are underpaid? Will they be defeated by improving garbage pickups at Cabrini Green? What, no "anti-terrorism" angle to justify expansion of the bee and mohair subsidies?

The American economy has indeed been catching its breath after the ill-considered exuberance, but a Keynesian grab-bag of tax-funded "economic stimuli" will only end up loading more debt on the shoulders of the very person whose renewed confidence and spending is now so desperately sought: the American taxpayer.

Such bailouts weaken economic discipline by creating the expectation that the federal helping hand will always be there ... before we even consider the strings which come attached to all such federal "help," leaving government regulators with powers of oversight over private sector decision-making which would have made Mussolini's fascist bureaucrats faint with envy.

The federal government does have a few important obligations in such an emergency -- primarily those directly involved with "providing for the common defense." New outlays for sky marshals, security checks for the janitors who sweep out our planes at night, firearms safety training and courtesy pre-fragmented ammo to top off the magazines of law-abiding American travelers? Fine. Seeking out those who backed and funded the perpetrators of the events of Sept. 11 for personalized, .308-caliber recognition?

Yes, these are the legitimate tasks and duties of the federal government. But proposing that Washington fund and run the entire economy? Cynically taking cover behind the tears and pain of a grief-stricken nation as they fill their own pork pails?

Where's the House Un-American Activities Committee when we really need it?

Vin Suprynowicz is assistant editorial page editor of the Las Vegas Review-Journal. To receive his longer, better stuff, subscribe to his monthly newsletter by sending $72 to Privacy Alert, 561 Keystone Ave., Suite 684, Reno, NV 89503 -- or dialing 775-348-8591. His book, "Send in the Waco Killers" is available at 1-800-244-2224.

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