Congress should not bailout airlines.

Congress should not bailout airlines.

By bailing out the airlines, congress is breaking a fundamental rule in capitalism. The state should never intervene in the markets in anyway and for any reason. That includes bailouts and corporate subsidies.

It is obvious the U.S. has relied too much on air travel for its transportation. By NOT bailing out the airlines, congress would send a clear message that the markets should find alternate ways for transportation, maybe high speed trains or some other creative solution.

After all, it was the airline's faults for relaxing on security and for not providing adequate measures to prevent this type of hijacking.

Why does the government "promote" air travel so much in the first place? I think a main factor is its fear of monopolies. Air travel is very flexible, very open, and easy to establish and until recently the safest mode of transportation. A more efficient form of transportation such as bullet trains requires long term investment and tends to become "natural" monopolies. This fear of monopolies has crippled the openness of markets for different modes of transportation and now we only have high fuel consumption modes such as road travelling by cars and trucks and jumbo jets.

Anyway, "true" capitalism forbids the government into bailing out a sector such as how the Mineta is suggesting for the airlines. It is going to hurt the economy in the short run when some of the airlines fail, but in the long run, it will make the economy much stronger by having a much more diverse sector of transportation. We should resist the temptation for short term gains. This is what capitalism is all about.

Originally posted at the Internet Infidels forum