Jimmy Carter and airline deregulation

[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.

[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

[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.

[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.