Airline deregulation consensus

Louis Proyect lnp3 at SPAMpanix.com
Tue Mar 6 18:30:48 MST 2001


While it is perhaps to soon to make the argument that the "neoliberal" turn
in the USA was a thoroughly bipartisan affair, I am struck by the broad
consensus around airline deregulation, which was one of the earliest
attempts to reverse the New Deal legacy. (Of course, it should be
emphasized that the Civil Aeronautics Board was hardly an instrument of the
class struggle to begin with. It was designed to make air mail routes more
efficient and routes were awarded to cronies of FDR.)

But the representation of liberal Democrats and conservative Republicans
alike in this major economic restructuring is something to behold. From
Thomas Petzinger's "Hard Landing" we learn that the initial moves against
the airlines were an outgrowth of the Watergate investigations which had
identified American Airlines as a major contributor to CREEP. In fact,
Robert Crandall of American Airlines, a totally repugnant character, was
one of the few airline bosses to resist deregulation, perhaps not sensing
his own class interests as acutely as United's Dick Ferris who believed
that his airline could gain in an unregulated market.

Two of Ted Kennedy's aides, Stephen Breyer and Phil Bakes, were apparently
involved with the antiwar movement at Harvard, in much the same manner as
Bill Clinton I suppose. For these two, the drive against airline regulation
was somehow akin to the 60s movements, even though the underlying rationale
was strictly Chicago-school economics. Another of Kennedy's aides was David
Boies, the Sears suit wearing super-lawyer of pregnant chad and
Microsoft-busting fame, who made his big dent in transportation
deregulation in the 1970s. Boies would marry Mary Schuman, a lawyer who
headed up transporations issues for Carter transition team in 1976. She
wrote a paper stating that airlines were "naturally competitive." Like in
our genes, I suppose.

>From the Republican side, we have Justin Dart on the Board of Directors of
United who applauded Ferris's proposal to go along with deregulation. Dart,
part of Ronald Reagan's inner circle, was typical of the Republican Party
sharks in the airline industry who were anxious to maximize profits, mostly
at the expense of union members.

To tie everything together, there could be no better choice to gut the CAB
than Alfred Kahn who was about as logical choice for this New Deal agency
as John Murdock is for the Pacifica Board. (I will have much more to say
about the impact of broadcasting deregulation on the people's radio network
later on.) Kahn, a Hayekian ideologue, was the choice of all ruling class
politicians concerned in the matter, especially Ted Kennedy whose committee
his testimony had held spellbound only two years earlier.

The deregulation bill reached the floor of the Senate on April 19, 1978. It
passed by a vote of 83 to 9.


Louis Proyect
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