Jimmy Carter and airline deregulation

[Aurelius]

I frequently see people on here criticize Jimmy Carter for deregulating the airlines. But I have never seen an argument supporting this beyond "deregulation bad". The old system before deregulation was a price-fixing cartel that guaranteed airlines substantial profit, prevented competition, and made air travel exorbitantly expensive. Does anyone have an actual defense of this old system and why it's better than the current free-market system in which air travel is affordable for most people?

[Benjamin Frank]

1.The deregulation process started under Nixon, I'm not sure if Nixon started the deregulation of airlines or just trucking.

2.Some people, both the customers and espeiclally the employees, prefer the stability the regulations provided in terms of certainty that the airlines would remain a 'going concern.'  I agree with you that this came at the cost of enormously higher ticket prices as well as less routes.

[Хahar 🤔]

There is in fact no good argument for airline deregulation being a bad thing. If you want the same sort of service that airlines provided fifty years ago for the same sort of price, you can do that by flying first class. Personally I prefer airlines competing on price.

[FEMA Camp Administrator]

Only slightly related, a classmate of mine once stated they might prefer higher airline prices to prevent the Air B&B-ification of previously residential spaces in cities like New York. While they maybe had a point, such a stance strikes me as absurdly out of touch, and a conspiracy to trap the rest of us in the provinces all but 1-2 weeks a year.

[Pacific Republican]

One of the few good things he did.

[Kahane's Grave Is A Gender-Neutral Bathroom]

Do people against this think that flying was somehow both the same price and nicer before? LOL.

[Benjamin Frank]

Oddly enough, I started a discussion on this before on this board because I didn't think anybody was familiar with the Nixon/Ford/Carter deregulation of the airlines and trucking and I wanted to separate this deregulation with Reagan's ideological health and safety and environmental deregulations, and the people that replied were all negative about the trucking and airline deregulation as well.  I'll see if I can find that discussion.

[Benjamin Frank]

This is the reply I received the second time I brought the topic up. I think it makes a number of thoughtful points:

Carter’s a neoliberal

Carter picked Mondale as a concession to progressives.

And as President he deregulated the airlines and appointed Paul Volcker to the Fed to jack up interest rates.

Carter did not cut the health and safety regulations on the airlines, that was Reagan.

He's talking about policy changes which let airlines fly where the wanted, price tickets how they wanted, and actually compete with eachother for passenger flow (the government used to control these things for some reason)--the consequences of which of course led to mass affordable air travel. The fact that someone thinks this was a bad thing with hindsight is truly strange.

If one is only concerned about how cheaply one can get from city A to city B, sure, deregulation has been great. But one can also be concerned about the stability of that industry and what that has meant to its labor force. One can also be concerned about the level of service and comfort.

One can also say that deregulation did lower fares and barriers to competitors for 25 or so years, although clearly bankruptcies, mergers and acquisitions have led to decreased competition, which should begin to increase those prices.

Yes, on net, deregulation has been mostly positive. The question is whether it will continue to be so. Here's a good read:

https://www.researchgate.net/publication/223075818_The_Good_the_Bad_and_the_Ugly_30_Years_of_US_Airline_Deregulation

[I spent the winter writing songs about getting better]

On a side note something Carter gets basically no credit for is also deregulating the beer industry which is exactly why those cool hipster independent breweries can exist today. Setting up a small brewery was virtually impossible between Prohibition and the Carter Presidency.

[Benjamin Frank]

On a side note something Carter gets basically no credit for is also deregulating the beer industry which is exactly why those cool hipster independent breweries can exist today. Setting up a small brewery was virtually impossible between Prohibition and the Carter Presidency.

I think that was also mentioned in that previous post.

[jamestroll]

It does not sound particularly "progressive" or "liberal" to me to support regulations that make flying impossible for many working or middle class and especially poor Americans.

Of course, I am sure I can easily find a tweet from the online left that wants that to decrease emissions.

[If my soul was made of stone]

On a side note something Carter gets basically no credit for is also deregulating the beer industry which is exactly why those cool hipster independent breweries can exist today. Setting up a small brewery was virtually impossible between Prohibition and the Carter Presidency.

The throughline from Jimmy Peanuts to Frackenlooper and from Jimmy Peanuts to Peter Franchot deepens...

[Lexii, harbinger of chaos and sexual anarchy]

On a side note something Carter gets basically no credit for is also deregulating the beer industry which is exactly why those cool hipster independent breweries can exist today. Setting up a small brewery was virtually impossible between Prohibition and the Carter Presidency.

Thanks Billy Carter!!

[sting in the rafters]

While airline deregulation considerably reduced fares and generated unquantifiable positive externalities via outright enabling long-distance travel for more middle-class/working-class Americans, it also exacerbated existing stresses on the air traffic control staff. The Carter administration was well aware of these concerns as it both readied a scab replacement task force and plans to increase FAA academy sizes in face of work slowdowns.

These cold relations and increasing inflationary pressures which exceeded their 1978 CBA's raise scale led PATCO to break with the AFL-CIO and endorse Reagan in 1980. Whatever fears the membership had over Reagan's Friedmanist rhetoric melted as the Great Prevaricator Communicator spoke to their grievances of old equipment, an outdated wage scale, and long work hours. These complaints manifested during 1981's new CBA negotiations. The Department of Transportation met the calls for new training and inflation-relieving wage increases, however not the chief demand for a 32-hour workweek. PATCO long remained jealous of their foreign counterparts who enjoyed shorter weeks and more vacation time. The bargaining impasse culminated in PATCO members overwhelming voting to strike on the morning of August 3rd.

The rest is history. Reagan told his Secretary of Transportation to not negotiate, and promptly fired every air traffic controller who did not return to their post within 48 hours. The AFL-CIO, itself too disjointed from intersectional squabbles, failed to provide PATCO the general strike solidarity promised in such circumstances. While federal unions' strikes were nominally illegal under an Eisenhower-era statute, the law remained selectively enforced until Reagan's decisive bust. Alan Greenspan noted the move "gave weight to the legal right of employers".

The American labor movement wilted, deprived of their most effective tool. The number of annual strikes plummeted from 300 in 1970 to barely a dozen by the year 2000. The firings  appeared within business school management textbooks by the end of the decade. PATCO's predominantly veteran, working-class membership proved predictive in the demographics which endured the most hardship as organized labor crumbled. In hindsight, it's hard to view the episode as anything other than the 41-year long war on American middle class buying power's opening salvo, and one must consider the Carter administration's complicity in setting the stage.

Tl;dr: Airline deregulation generated numerous benefits for the average consumer and helped unleash certain aspects of the modern knowledge economy. It also proved a domino in what my dad cites as the darkest day in postwar American history this side of 9/11. Personally I just enjoyed a round-trip to LA for under $550 and have to wake up in under 7 hours for a job where despite being salaried I must code my hourly time to each project I work on for the benefit of my boss's profit analysis so I suppose one must take the good with the bad.

[Benjamin Frank]

While airline deregulation considerably reduced fares and generated unquantifiable positive externalities via outright enabling long-distance travel for more middle-class/working-class Americans, it also exacerbated existing stresses on the air traffic control staff. The Carter administration was well aware of these concerns as it both readied a scab replacement task force and plans to increase FAA academy sizes in face of work slowdowns.

These cold relations and increasing inflationary pressures which exceeded their 1978 CBA's raise scale led PATCO to break with the AFL-CIO and endorse Reagan in 1980. Whatever fears the membership had over Reagan's Friedmanist rhetoric melted as the Great Prevaricator Communicator spoke to their grievances of old equipment, an outdated wage scale, and long work hours. These complaints manifested during 1981's new CBA negotiations. The Department of Transportation met the calls for new training and inflation-relieving wage increases, however not the chief demand for a 32-hour workweek. PATCO long remained jealous of their foreign counterparts who enjoyed shorter weeks and more vacation time. The bargaining impasse culminated in PATCO members overwhelming voting to strike on the morning of August 3rd.

The rest is history. Reagan told his Secretary of Transportation to not negotiate, and promptly fired every air traffic controller who did not return to their post within 48 hours. The AFL-CIO, itself too disjointed from intersectional squabbles, failed to provide PATCO the general strike solidarity promised in such circumstances. While federal unions' strikes were nominally illegal under an Eisenhower-era statute, the law remained selectively enforced until Reagan's decisive bust. Alan Greenspan noted the move "gave weight to the legal right of employers".

The American labor movement wilted, deprived of their most effective tool. The number of annual strikes plummeted from 300 in 1970 to barely a dozen by the year 2000. The firings  appeared within business school management textbooks by the end of the decade. PATCO's predominantly veteran, working-class membership proved predictive in the demographics which endured the most hardship as organized labor crumbled. In hindsight, it's hard to view the episode as anything other than the 41-year long war on American middle class buying power's opening salvo, and one must consider the Carter administration's complicity in setting the stage.

Tl;dr: Airline deregulation generated numerous benefits for the average consumer and helped unleash certain aspects of the modern knowledge economy. It also proved a domino in what my dad cites as the darkest day in postwar American history this side of 9/11. Personally I just enjoyed a round-trip to LA for under $550 and have to wake up in under 7 hours for a job where despite being salaried I must code my hourly time to each project I work on for the benefit of my boss's profit analysis so I suppose one must take the good with the bad.

Interesting history, some of which I knew, but not that level of detail. But, I'm not sure how you can blame Carter for Reagan firing the air traffic controllers.

[sting in the rafters]

Interesting history, some of which I knew, but not that level of detail. But, I'm not sure how you can blame Carter for Reagan firing the air traffic controllers.

Rather than a question of blame it’s primarily an issue of inaction. To reiterate, Carter administration knew very well about the strain moving from a point-to-point system to a hub-based regime would place on the air traffic controllers and failed to offer the adequate equipment/training to handle the increased volume:

By the time airline deregulation became law, FAA had achieved a semi-automated air traffic control system based on a marriage of radar and computer technology. By automating certain routine tasks, the system allowed controllers to concentrate more efficiently on the vital task of keeping aircraft safe and separated. Data appearing directly on their scopes provided controllers the identity, altitude, and groundspeed of aircraft carrying radar beacons. Despite its effectiveness, however, the air traffic control system required enhancement to keep pace with the increased volumes.

Furthermore, PATCO walked off the job operating under the impression they held leverage due to the sheer costs/resources necessary to direct flights using scabs and/or the military's resources. While air traffic slowed, the skies remained open in large part due to the aforementioned contingency plans the Carter administration drafted in response to previous labor disputes:

Before the 1976 presidential election, PATCO had sought to trade a political endorsement of Republican Gerald Ford for more favorable treatment. Rebuffed, it endorsed Carter in 1976. But Carter only made conditions worse, with controllers seeing the erosion of early retirement along with a decline in real wages. In early 1980, the Carter administration began to make elaborate plans for dealing with the air traffic controllers union. PATCO was aware that Carter was singling it out, and, for this reason, endorsed Reagan for the presidency after the latter assured the union that he would respond to its grievances.
...........

Carter administration officials later publicly took credit for the PATCO union-busting operation. The plan was devised in early 1980 by Langhorne M. Bond, Carter’s appointee to head the FAA, and Clark H. Onstad, chief counsel to the FAA and also a Carter appointee. As early as 1978, Onstad began to work up plans for criminalizing a PATCO strike in discussions with Philip B. Heymann, Carter’s assistant attorney general in charge of the Criminal Division of the Justice Department.

The speed with which the FAA brought in replacement controllers under Reagan stands as a testament to these advanced preparations. At the beginning of the strike, the FAA academy in Oklahoma City suddenly increased its cohort from the typical class size of 70 to 1,400. Ray Van Vuren, director of operations for the FAA, said during the strike, “I knew we had too many (controllers) even before the strike, but it was impracticable to attempt to streamline the controller force because of expected resistance from the union.” If the controllers had not gone on strike, they would have faced as many as 3,000 layoffs.

“Incredibly detailed planning [went] on for more than a year because we just knew the strike was going to happen,” Onstad told the New York Times in the midst of the strike. The Times remarked, “Reagan administration officials enthusiastically polished and put into effect the plans first drafted in the Carter Administration."

These schemes cannot be explained on a purely fiscal basis. As PATCO workers noted, there would be enormous costs associated with training thousands of new controllers, to say nothing of the damage to the economy resulting from the inevitable restriction of commercial flights. The Reagan administration wound up paying some $2 billion just for the training of new controllers.

For Carter's part in particular, it was after all his appointed Fed chairman Paul Volcker who famously declared "The American worker's standard of living has to decline." Volcker later gleefully cheered the PATCO firings as instrumental in facilitating a borderline genocidal level of wealth inequality getting inflation under control. So while Carter left office in 1981, his administration's plans and own personal indecisiveness very much greased the wheels for Reagan's iron boot.