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To: GVTucker who wrote (143863)	9/20/2001 4:02:37 PM
From: fingolfen	Read Replies (3) \| Respond to of 186894

Exactly what benefit to the US consumer or the people of the US in general (at least those that do not own stocks or bonds in airline companies) do you see from a bailout of the airlines? Again, you raise some very good arguments, but I think you're missing parts of the picture. Yes, there are capacity issues with some of the major carriers. Yes, a few select carriers will be able to weather the storm better than others, but part of the problem with the airlines and their (lack of) profitability has nothing to do with over capacity, it has to do with government regulation. Government regulations cover everything from airports, to airport security, to airline trade unions. As I mentioned in my response to another post, Yahoo! has an interesting interview with Lushkin covering this topic. Would the airline industry completely disappear? No. Would that industry be as cost effective for the consumer if they aren't bailed out? Maybe not. I don't want to see plane tickets start costing 2X to 3X what they run now in the years ahead. That's going to be bad for consumers and business. A bailout may prevent a major industry contraction which would limit competition in the future. Clearly some fat can be trimmed, but in a situation as clearly bad as this, local monopolies could arise. I'm primarily concerned about cascade effects (not the Intel processor). Today we lose 100K out of the airline industry. That is yet another blow to an already weak economy. What then happens to the travel agencies? They cut. What then happens to the hotels. They cut. These people now are chasing bare necessities rather than producing and spending in the economy which further weakens the economy. What industry cuts next? In short, the government needs to put liquidity into the hands of the consumers. The only way to do that is to break the downward spiral of cutbacks, layoffs, and down-sizing. I'm still looking for an fundamental change in policy that will accomplish that. An airline bailout could be the first step. I agree, it's a band-aid. That's all it is. More fundamental changes are needed (lowering the capital gains tax or gasp eliminating it all together could also help). The bottom line is there are too few dollars chasing too many goods. Continuing to cut back and reduce the number of goods is only perpetuating the problem because every cutback in production creates a proportional cutback in dollars chasing that production. American goods, services, and securities are dirt cheap and getting cheaper. Consumers need money to start buying at these prices. We then need to be able to create capital to sustain some real growth. Dumping the capital gains tax could help that. There is, however, no one real answer. I still stand by the analogy that an airline bailout is a credible EMT measure to keep the economy stable long enough to get it into the ICU where it can really be helped. I do, however, want to see some "real work" beyond bandaids, IV, and life support performed ASAP in Washington.