Our Regulated Society

When we boarded the flight, the airline pilot announced that the fog cover in Monterey was low (I think I’ve got the term right) …

Not bad. Fog is a cloud which extends to the ground. You may have meant that (the pilot announced that) the ceiling was low, i.e., that the bottom of the clouds near and above the airport was relatively close to the ground.

Here’s the NOTAM (Notice to Airmen) that is probably relevant to your story:
!MRY 09/014 MRY NAV ILS RWY 10R OUT OF SERVICE 1409091810-1409232359
I.e., instrument landing system for landing on runway 10R out of service Sep. 9-23. Such a system typically provides vertical guidance down to 200 feet above the runway (plus lateral guidance).

Count your blessings, David. At least you have banking services.

Americans living abroad are being cut off by banks and brokerages as financial institutions seek to steer clear of a U.S. crackdown on money laundering and tax evasion.

delicious chilli at wendy’s? where else have you been eating…

Notices to Airmen? Regulation!

David Henderson:

Ah so, my friend. My point was that posting a warning to pilots about the temporary non-operability of instrument landing capability was probably a good thing, with beneficial results — I don’t want to lose you, David! — and the regulations that caused the airport to disclose the temporary conditions, and the regulations that caused pilots to read the warning, and so on were probably good things.

Now the background issues — did the Monterey airport have the sort of traffic that really required lengthening? did construction actually screw up the environment in some fashion or is this simply NIMBY-related objection to the noise and confusion of such construction? — are different matters. Possibly an ideal technocrat with access to all sorts of data could make a factual judgment.

I’m not that guy, and I don’t have that data. But on balance, making my own seat-of-the-pants judgment, I think I’d go along with you — the Monterey airport was probably fine as it originally was, and the construction unnecessary, and at most the Notices to Airmen should simply have stated that the airport was off-limits to aircraft above some weight limits or landing speed requirements. But that’s an argument for BETTER regulation, not for NO regulation.

I suspect in an ideal world, there might be only 10 % of the regulation we currently have, and we’d both be happy with it. I think you’re trying to nudge us in that direction by pointing to the ill effects of regulations, in hopes of swaying people who might be convinced that Utopia consists of having NO regulations. I’d like to live in Utopia also, but the contrarian in me is always going to think we need SOME regulations for practical reasons.

So. I was teasing, not making an angry refutation of your essay. Carry on, please, and God bless.

Mike,
why is it an argument for better regulation? Let’s say some free market airport screwed up. Would you say it is an argument for a better free market?
‘Regulation’ is an ecosystem. In a similar way a market is. Isn’t preaching for better regulation in a sense as nonsensical as preaching for ‘better market’?

It’s probably worse than David thinks. The current system of government controlled air traffic control and navigation depends mostly on technology from the ‘60’s. The ILS approach to 10R at Monterey is basically the same approach that aircraft would have used while David was a boy chopping cotton in Manitoba (or whatever they chop in Manitoba or wherever he was chopping it). The more modern technology– GPS enabled LPV approaches (Google it. Very cool)–don’t rely on old, expensive gizmos installed at the airport. That means you can have more precision approaches, which means that when an airport is having a no-good, very-bad-day—runway restrictions and fog—arrivals can usually move to a different runway.

But GPS approaches are just now becoming common. It looks like Monterey, an airport that probably gets lots of fog, only has a non-precision GPS approach. This is not surprising. The FAA makes it very challenging to get the in-aircraft equipment approved and installed. I understand that there’s even more red tape in getting the approaches up and running. In a privatized environment the airlines would do a very, very good job of making sure that the GPS receivers in their aircraft worked. They would also make sure the airport they contracted with published only safe, well-tested approaches. Commercial aviation is very safe. Most of that is because the airlines want it to be very safe, but the FAA has contributed as well, a fact we should celebrate. However, commercial aviation is also very inefficient. That’s the FAA’s fault.

David, next time you get stranded at SFO, try to share a ride home with a big-government progressive. An unnecessary two-hour car ride after a long day of flight delays does concentrate the mind.

@Joel Avilla:

Neighbors scarcely lose (if at all), unless you count the privileged psychic pain of having “tourists” staying in the house next door.

Maybe you’re selling the neighbors short. I can easily imagine that it’s more than just “privileged psychic pain” to see your neighborhood turn into a tourist trap.

Besides, what if there’s a reason that native residents don’t like having tourists around? I can easily imagine tourists littering more, clogging up the infrastructure, and generally changing the culture towards the commercialized and generic. That seems to be a common complaint about tourists anyway, so there’s likely some truth to it.

Don’t get me wrong, I think there are a few places where a service like AirBnB truly does facilitate a win-win-win (that third win being for neighbors) and maybe Monterey CA is one, but I don’t think these places are anywhere near as common as the people behind/on board with AirBnB might wish it to be.

So, to restrict stuff like AirBnB out of hand doesn’t seem like such an unreasonable precaution.

Yes markets self regulate. And in the case of air travel, the result would be that no one would fly. The liabilities could not be resolved. The only conceivable way to allow 700,000 lbs of steel, plastic and human bodies to hurtle over cities and towns would be if there was a regulatory accommodation agreed to via the democratic process. No private party has a right to take such a risk.

Tom, privatized and self-regulating are two different things. I don’t know anybody who wants an air transportation system that is unregulated. There may be some people who want the system regulated by tort law rather than the crazy mixture of tort law and FAA regs we have today (although even that view is rare). But a lot of people, including me, think we’d be much better off if the airports and the ATC system were controlled by the private sector. In a world where the dimensions of a typical airline seat are discussed more often than celebrity selfies, airlines have a huge incentive to make flying very, very safe.

Mike- I don’t understand your point. We aren’t talking about privatization. We are talking about regulation. Incentives don’t matter here. Consent does. No one can do activities like fly enormous planes with market style consent. It simply isn’t possible for everyone placed at risk to agree to terms. You have no right to risk my life that way, no matter how strong your incentives are. It requires democratic consent on a national level, or it doesn’t happen. The regulations are the terms of the agreement.

David,

Some folks at Reason Foundation have been very keen on the Canadian/Australian model of regulation, which involves a privatized monopoly that aviators are required, by law, to use.

If there is one thing that has greater potential for abuse than government, it is a private monopoly that people are legally required to use.

Abuse is supposedly minimized by having the entity be a) a non-profit and b) overseen by a board with representatives from the airlines, government, and general aviation.

Of course, in practice, the airline representatives control the board (they outnumber the GA representatives, and capture the government representatives). And, to be precise, they are the representatives of current incumbent airlines – you can’t be a representative of an airline that doesn’t yet exist.

The non-profit aspect hardly matters. If, handed the reins of the regulatory system, representatives of incumbent airlines cannot figure out how to a) raise barriers to entry and b) curtail general aviation, they lack all imagination.

I therefore do not share the Reason Foundation’s enthusiasm. Indeed, I think the solution it advocates is actually worse than government. The reason private markets work is that they offer competition and customer switching options, neither of which affects Transport Canada. If we must have a mandated monopolist, let’s at least not explicitly hand it over to an interest group to run! And, if we must privatize FAA functions, let’s make sure it’s done in a way that creates real service provider competition.

@Joel Avila (with one “l”, sorry)

Sometimes the negative externality is hard to articulate even though it’s recognized and agreed upon by the people affected.

This means it’s difficult or impossible to create a tax or restriction on any specific thing that might solve the problem.

Another thing to consider is that simply having a regulation sends a message. I’ve said before (though maybe not on here) that one critical but unstated function of the law is to send messages that would be awkward or unpleasant to send interpersonally. A law says something about the character of the place that created it.

David Henderson wrote:

General aviation and airports gets a lot of implicit and explicit subsidies from government. But it’s not a free lunch for them. The feds eat up a lot of the value that the subsidized get from the subsidies by heavy regulation. So the subsidized are still better off from the subsidies than they would be without, but not much better off. Given that a lot of the regulations are inefficient, I think there’s a huge deadweight loss.

Breaking that down a bit…

There are certainly explicit federal subsidies to regional airports.

The airlines like to claim that general aviation gets a lot of implicit subsidies for air traffic control (ATC), because it takes the same amount of ATC to handle a Cessna as an airliner. That’s simply not true, even if the Cessna uses ATC – which it is much less likely to do at all. In fact, as far as many Cessna operators are concerned, ATC must be tolerated because it is mandated by… the needs of the airlines.

Indeed, small-plane pilots routinely – extensively – bypass the FAA’s services, flying around areas that require heavy use of ATC (because those are airline-use areas), and paying for market-provided services for weather information and flight planning (even though the FAA services are “free”, or, in fact, paid through aviation gas taxes).

On the other hand, business jets DO operate much more like airliners, in their use of ATC.

There’s no question that FAA regulation has been a deadweight loss to general aviation at the small-plane end. Small planes are mostly stuck in the 1950s, because improvements – whether for speed, safety, convenience or functionality – are cripplingly expensive to get through FAA certification. Introducing a competitor to an old design is not economic. Consequently, today, the flying equivalent of a ’57 Chevy is still one of the most popular small planes sold, but now costs $350,000, and sells about 100 a year, worldwide.

Regarding Airbnb, there are plenty of ways for people to keep tourists from living near them without any regulation. Condos, co-ops, homeowners’ associations, and rental properties all can forbid them, so residents who want to avoid being near short-term renters can always choose to live in a place that bans Airbnb and similar services.

I’m having trouble thinking of a good reason for the government to step in, other than regulatory capture by the hotel industry or people trying to force their no-tourist preferences on their neighbors when both those people and their neighbors have intentionally avoided arrangements that could provide that same end without government interference.

@Thomas Boyle,
If there is one thing that has greater potential for abuse than government, it is a private monopoly that people are legally required to use.
I’m not sure that’s true. It could be true; I just don’t know. What I’ll grant is that there’s lots of potential for abuse.
Of course, in practice, the airline representatives control the board (they outnumber the GA representatives, and capture the government representatives). And, to be precise, they are the representatives of current incumbent airlines – you can’t be a representative of an airline that doesn’t yet exist.
Good point, but notice that that means that the consumers of the services are on the board, which would presumably limit the power of the private monopoly to exploit them.
It’s an empirical issue: any data on this?
if we must privatize FAA functions, let’s make sure it’s done in a way that creates real service provider competition.
I agree with you there.

@NZ,

I heartily agree with the point that laws reflect character. I also agree that negative externalities (NEs) can be sometimes difficult to articulate. The real question at hand is when to use the law to address an actual or perceived negative externality. In a society that values (at least in principle) “innocent until proven guilty,” we can’t convict people unless the evidence is clear. If the NE is hard to articulate, how do we – or local authorities or anyone else – know people are actually being affected and agree that they are affected? What we’re left with are tastes and preferences. And so it should be no surprise that a solution (taxation or what have you) is hard to difficult when it’s demonstrably *not* clear that there’s a real problem.

While I recognize that the spectrum of NEs can sometimes be gray, I shudder to think that tastes and preferences should be the primary driver of legislation (history is littered with figurative and real corpses of such a model). Rather I think a law is appropriate when the externality is very much on the black-and-white side of the spectrum. We should create rules when others’ lives, liberties, and properties are clearly at risk, and use other mechanisms when not (e.g., moral and social norms, voluntary associations/activism, public awareness, etc.) Otherwise you’re diminishing private property, innovation, growth, diversity, and, in the case of Airbnb, a historic and genuine practice of hospitality. Broad rules against vague neighborhood effects inhibit human flourishing, both in general and in particular.

I’ll use a personal example of a negative externality that isn’t hard to articulate. I like going to the beaches along the Gulf of Mexico in northwest Florida. In cases like the BP oil spill, I want the EPA to force negligent firms to pay big-time for violations, since neither I nor anyone else along the beach wants to get cancer or destroy the livelihoods of people who depend on the local environment. BP knows this (or so one would think), so they do (or should do) whatever they can to pollute less.

We are probably going to agree to disagree on the point at which we pass a law to address a NE. That said, if laws are limited to clear NEs, they’re actually *helping* to increase freedom for *everyone.* The well-aimed rule protects neighbors and creates opportunity for the agent of the NE to become “freer” of the noxious thing he is doing.

Once again, all of this doesn’t repudiate the need or desire for a well-targeted set of rules for services like Airbnb. I and the petition drafters I mentioned very much share the desire for such rules to address the obvious neighborhood effects of the type I’ve described. I think such rules should evolve so that as other externalities become more obvious, they get addressed too. Sadly, I think tastes, preferences, and vague, hard-to-articulate notions of neighborhood effects might prevail in Monterey County and other similarly-minded places. Even reasonable people can be prone to prefer the status quo than to dare greatly.

By Oklahoma standards, Wendy’s Chili is actually chili flavored soup. But it’s OK.

I work for an HMO that does a lot of Medicare work. You haven’t seen ridiculous regulations until you deal with the federal government on medical issues. A tiny example: CMS (Center for Medicare and Medicaid Services) frequently require reporting long before they have the computer infrastructure to accept the reports. Regulations are so complicated and conflicting that few know what to do. It’s so bad that our staff finds it more humorous than irritating.

Just listened to a story on reduced service to regional airports because labor costs are going up too fast and business is improving too fast at the larger passenger and cargo airlines.

Which reminded me of this article.

The reason you have schedule air service at this small regional government owned and run airport is because strong government regulation by Congress until Carter signed deregulation ensured MRY was served by scheduled air service, building runways, terminal, and a market, often at the expense of more private transit services, like bus and rail.

MRY is a feeder airport for the now limited number of large airlines served by regional airlines with code sharing agreements. The regional airlines have been screwed in the past few decades by the contract terms jammed down their throats as the major airlines went through bankruptcy (even as they got Federal bailouts from Congress). The USAF is training far fewer pilots and will train fewer as drones eliminate the role of pilots.

According to AMBAG reports, MRY is the only one of 14 regional public airports with scheduled service. AMBAG budgeting forecasts Federal funding for airports at $140 million vs $100 million for aging bridge replacement, based on the 2008-2011 Federal funding. Revenue from the airports was $80 million in contrast to the $140 million Federal funds. AMBAG places a priority of “improvements” for the Monterey Regional, Salinas Municipal, King City, Municipal (Mesa del Rey), Marina Municipal, Watsonville Municipal, Hollister Municipal. Following the politics of the regional public airports in NH, “improvements” generally means getting airlines to provide scheduled air service.

If MRY had remained privately owned or was allowed to become private, I’m sure it would be closed, and turned into a resort for rich people. Using the land for an airport just can’t generate enough revenue to pay for the costs its operation, much less offset the opportunity costs of failing to use it for private purposes.

Without government regulation, you would never had any occasion to have a scheduled flight diverted.