With whopping 100-25 and 35-2 votes in the House and Senate, respectively, state lawmakers have already approved spending $5 million a year for five years to help Wichita Mid-Continent Airport keep and expand low-fare service. Gov. Kathleen Sebelius signed the bill last week. So what’s the problem?
Well, as the Legislature’s wrap-up session starts today, the airfares program remains unfunded and at risk of being inappropriately linked to a last effort to leverage votes to expand gambling. Casinos are a worthy issue, but in their own bill. On its own merits, this bill already won passage and Sebelius’ signature. Now, deliver the dollars.
Posted by Rhonda Holman
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45 Comments
The Kansas Legislature? Do something right? You mean, the first time?Stop! You’re killing me!HAHAHAHAHAHAHAHAHAHA!!!!
The problem is the legislature just found out the planes of today evolved from the Wright Brothers airplane and they don’t know what to do. They were under the impression the planes just appeared one day. So many problems, so little minds.
EVOLVED? (gasp). And here I thought planes were created by the intelligent Flying Spaghetti Monster…
I tell you what. I went to Atlanta last week and that flight was booked completely to the last seat sold. They were even oversold, said the flight attendant. Pluse the airport was packed.
When I got back on Sunday, I couldn’t believe how busy the airport was at Mid-Continent. There was so many people walking around that I felt like I was still in Atlanta.
I fly quite a bit, but this is by far the busiest I ever seen. Good news for Wichita.
Can’t wait for the new airport.
The airport, Wichita’s biggest welfare momma.
Good news Joe. Now we will see how the aurport and flight go for me in a couple of weeks on my free-market unsubsidized flight.
Hope it goes well, Ben. By the way, airfares at MidContinent are down something like 30% across the board since AirTran arrived. You can’t thank your “free-market” for that, but you can thank some progressive, open-minded leaders who decided to save YOU and the rest of us a few bucks.
I a blessed to be able to go to London in October. Flying out of Wichita, we are spending less than $700. Yes, flying out of Wichita…Kansas…to London…England. Deals like this are unheard of. Thank God for Fair Fares.
Anyway, enjoy your flight.
Shocker – I haev not seen much change in Chicago or West Coast fares as a result of Fair Fares.
Some years ago I flew to Myrtle Beach and got there fairly cheaply. “Air Maybe” was a crucial link from Wichita to KCI. Unfortunately, there are no longer based here.
We still need some help going west.My upcoming flight from ICT to SFO will cost me 150 percent more than my flight from SFO to MNL.And bringing back a wife and a kid? Yeesh!
And where would your local legislators be on this issue?
Still trying to defeat gambling? Even if it loses money for Wichita? Oh wait, no gambling already means no extra money for Wichita.
Must… be…. thought… pure….
NO INCUMBENTS!!!!!!
Actually, you do have some good incumbents. Don Betts, Tom Sawyer, Judy Loganbill, etc.
Now if you could just get rid of the wingnut taint that makes people laugh and holds your community back…
I am curious to learn how those who claim a certain amount of savings know what that amount is. Since we don’t know what airfares would be had the subsidy not been in place, there really isn’t any way to know, is there?
We are now in a position where it is unlikely that any new air service will come to Wichita without the new service receiving a subsidy. Existing carriers have reduced the number of flights they provide, which is not surprising. When the price of something is held artificially low — which is the goal of the subsidy — less will be supplied. If legacy carriers such as American and United withdraw from or reduce their presence in Wichita, we will be in a lot of trouble. As we seek to punish them for being in business, we should hope that they don’t notice our hostility towards them.
By the way, I think that accounting services in our city happen to be overpriced due to lack of meaningful competition in the market. Can the city, county, or state subsidize one accounting firm, so that others will meet that firm’s lowered price?
KCL – we can compare current fares with historical fares. That will show, for example, that fares to “politically correct” destinations like Atlanta have declined. Unfortunately, fares to “politically incorrect” destinations like California have gone up.
Accounting firms obviously don’t have the same cost structure as an airline, KCL. I’m sure you know that. ;)
I take your point generally, though. The thing about subsidizing airlines is just a finger in the dyke. We’re depending on econ dev to bring in new sources of airline revenue (i.e., new companies in Wichita or extant ones willing to relocate).
If the demand for airline seats doesn’t pick up before the political will for subsidies flames out, then we’re hozed and all’s for naught as some companies currently in Wichita will probably relocate to hub cities.
Then the city shrinks, perhaps fatally given global economic conditions. When that happens, accounting fees will likely drop in real dollars – but so will choice in accounting firms drop in number and probably in quality.
I don’t see what cost structures have to do with anything. Could you enlighten, please?
Comparing today’s fares with fares from four or more years ago isn’t very valid, is it? That assumes nothing in the airline industry has changed.
No time for education, KCL. Very quickly it relates to the ratio of fixed to total costs, which is very high for airlines but much lower for accountants.
Google is your friend.
Uh, finger in the dike…unless you mean something else.
Dijk.
What, you an editor? ;)
flike, if you won’t explain your argument, how can we understand?
heheh git.
KCL, your “free-market always knows best” mentality left this city with some of the highest airfares in the nation. It left us with an empty building that Pizza Hut ONCE called its world headquarters. It left us with another empty building that Rent-A-Center once called its world headquarters. It left us with another empty building that Brite Voice once called its corporate headquarters. We are probably damn lucky it didn’t leave us with an empty building that Koch Industries calls its world headquarters. Oh, and it left us with a ghost of an airport that people once flew out of.
I’m glad some people around here actually cared for this city enough to do something about this situation. Otherwise, we might have ended up a city of people serving fast food to each other. MidContinent is one of the fastest growing airports in the nation because airfares have dropped on most routes, even ones not served by AirTran. Just the presence of AirTran has caused many of the airlines to stop gouging prices on other routes.
You’re probably dancing in the street because of the gas prices, aren’t you? After all, your beloved “free market at all costs” has sent oil prices through the roof.
In your world, Wichita should just close the airport and ship our white collar jobs to other cities, airlines and oil companies that feel like charging whatever the hell they want just because they can get away with it should be left alone, and then we’d all be better off.
You might want to look at the air fare program before you criticize it. The governor said it was good economic development for the state and that it would keep more revenue in Kansas. She also signed the bill. She said that was because Wichita is the only major airport in the State of Kansas.
Shocker ‘07, it’s pretty easy to win an argument when you attribute things to someone that they didn’t say. It’s also dishonest.
You may want to check your facts, too. From the article “Airport traffic down; AirTran traffic rises” in the April 20, 2006 Wichita Eagle: “In March, 256,391 passengers arrived at and departed from the airport. That is down 6.4 percent from March 2005. … For the first quarter, traffic was 667,780, down 4.1 percent for the year.”
Furthermore, fewer passengers were enplaned at ICT in 2005 (742,363) than in 2004 (749,416). Comparing growth in passengers at ICT with the nationwide trend, we see nationwide growth in passengers from 2002 to 2005 to be about 20%, while in Wichita, the same number is 11%.
For the companies that you mentioned: do we really believe they left because of high airfares? I’m aware that some of them said that airfares were a consideration, but I wonder if that was really a factor.
Finally, airlines and oil companies are continually investigated by various governments, and they haven’t found evidence of collusion in pricing. Don’t you believe that if there was evidence, that it would be trumpeted by the many opponents of these industries? So I don’t think it’s honest to say these companies price at “whatever the hell they want just because they can get away with it.”
KCL, never said you said those things. Just letting you know what the fruits of your misplaced idealism can sometimes be–pretty rotten fruits.
From the SAME article you quoted, “They are changing their fares so rapidly, mostly to cover their cost of fuel,” White said.” Looks like passenger traffic is down due to the impact of fuel prices, but AirTran was able to price competitively due to Fair Fares promotions.
A recent press release at flywichita.com: “United Airlines has lowered its non-promotional “everyday” fares from Wichita to Chicago.” This was in response to pleas from airport leadership and not the free-market.
Other interesting tidbits:”While 2003 set passenger numbers at an all-time record for Mid-Continent Airport, 2004 broke that record to have the most passengers that flew Wichita Mid-Continent Airport than any other year in the airport’s history.”
“Wichita Mid-Continent Airport set a yearly passenger traffic record with 1,498,749 total passengers in 2004, an increase of 5% over 2003. The record set last year was 1,431,610 passengers which surpassed the record set in 1996 when passenger traffic was 1,427,542.”
“While passenger traffic has continued to rise since the inception of Fair Fares two years ago, ticket prices have steadily fallen. The average one-way fare out of Mid-Continent Airport in 2003 (most recent yearly comparison date available) was $137, compared with $182 in 2002 and $216 in 2001. In total, conservative estimates state that passengers have saved over $200 million on airfares since low-cost airlines AirTran Airways and Allegiant Air entered the market.”(press release)
At least you have the honesty to admit your figures that show us trailing the national average is actually only “enplaned” passengers and do not count arrivals. These poor forgotten arrivals are just as important, as it is important for businesses operating here that clients can come here cheaply, as well as prospective new residents/employees. Also interesting is that your numbers include two YEARS before Fair Fares started. Hardly fair, don’t you think? No pun intended.
Finally, check this out:”A new study [2004] published in AviationDaily ranks Mid-Continent (ICT) as the 19th fastest-growing airport in the country, ranking higher than larger airports in cities such as Sacramento, Calif., Ft. Lauderdale, Fla., and Rochester, N.Y.”
“With an average fare of $131.40, Mid-Continent offered lower fares than 57 percent of the airports listed on the study’s Top 50 Passenger Growth Airports list.The growth occurred at a time when many airports saw major decreases in passenger travel – some declines were as large as 67 percent, the study revealed. Tulsa, Okla., Dallas, Boston and San Francisco are just a few of the cities with airports posting passenger declines.”
Not bad for an airport that closely resembled a ghost town at the turn of the century. I most liked the fact the average fair dropped from $216 in 2001 to $137 in 03 (and apparently to $131 in 04). On average, anyone who uses our airport is saving $85 a crack since before Fair Fares. That Fair Fares, what a “waste of money.” KCL, you’re a silly guy.
Oh, and about the oil. I’m not saying there’s collusion. I’m saying the market is to blame. You don’t have to be a rocket scientist to understand that just because someone COULD charge a lower price doesn’t mean they WILL. I believe the market’s undue fear about political instability is causing a lot of the problem. One does have to question the record profits at oil companies, though, and it does make me wonder about collusion. One thing the market cannot do on its own is give a damn about our society and national economy. This is one of those rare times when the government needs to consider price controls.
Can we agree that press releases from the Wichita airport might be self-serving, and anything stated in them needs independent verification?
I chose 2002 as the starting year as that was the year Fair Fares started. Should I have chosen a different year? Or do you think Fair Fares started some other year?
I believe that enplanements are a common way to measure an airport’s traffic. Nonetheless, I looked it up. Total passengers at ICT in 2005: 1,486,590. In 2004: 1,498,749.
The fact that average fares have fallen at ICT might have more meaning if placed in context. What has happened to fares nationwide during the same time? As for the article that said ICT is a fast-growing airport, I am not able to reconcile that article’s findings with my own. Perhaps ICT traffic grew quickly over some short period of time. But over the past few years, from 2002 to 2005, it grew much slower than traffic nationwide.
I don’t think I said that the AirTran subsidy is a waste. It is almost certainly true that money has been saved on airfares, probably much more than has been spent on the subsidy. It’s even a better deal for Wichita and Sedgwick County now that the entire State of Kansas will probably pay for most of the subsidy. But none of this is justification for it, and “good” ends don’t necessarily make good economic policy or moral correctness. As I’ve said, we should be grateful that the legacy airlines still provide service to Wichita, as we treat them with hostility by providing a competitor with millions each year.
I asked before, if we believe that accounting services are too expensive in Wichita, why don’t we subsidize one accounting firm so that it can charge lower prices, and other firms will be compelled to meet its price? Couldn’t we do that with a few gasoline stations in town? Or a few grocery stores? Am I wrong, or is there a distinction to be made between these examples and the airline subsidy?
I don’t think nobody likes subsidies, but we have to do something to turn ICT around. There might have been a few thousand less passengers from 04, to 05, but that has mostly to do with Salt Lake City and Detroit being off the destination cities. This has nothing to do with demand, but with re-structuring of the Airlines that provided those destinations. Both Delta and Northwest are in Bankrupsty and just a few weeks ago, Delta almost bit the dust.
Ok! So there is not overwhelming demand for some flights, but what we need to do is keep people from using OKC and KC to fly out of. The catch-22 situation is because of that. Southwest Airlines said they would fly to Wichita, but don’t because people drive to OKC to fly them instead.
In general, the number of passengers flying in the USA is down or flat. But we will experience another boom in airtravel once fuel prices stabilize in a couple of years. Wichita is just positioning themselves for the long term, not short term price reductions. Although in the short term, it helps, the long term is the goal.
Yes! We need west coast flights, but its difficult when west coast cities aren’t big in passenger load like they are in Atlanta or Chicago.
And yes! We lost world headquarters not only because of Airfares and lack of flights from here, but because we were too small of a city.
I hate to say this, but we really need to grow our city to be successful, retain and recruit businesses and headquarters.
We need to get off our butts and do something. The downtown arena helps, Fairfares helps, and anything we do to progress helps. If we sit and complain and keep baging on Wichita, it’s going to go down and I don’t want to see that happen.
Nice post Joe.
About accounting fees, KCL, if you can make a good case that subsidizing a particular firm would provide a dramatic boost to downtown redevelopment, or that it improves the image and quality of life of Wichita as a whole, or that it corrects the wrongs of other firms that have been charging outrageous rates that are higher here than most other cities in the nation, I’d say let the subsidies roll!!!
Subsidies in themselves aren’t always great. In some ways they are a necessary evil. In certain situations, they should be used to generate a desired effect that otherwise would not have happened. It is not always best to leave fate up to the whims of the market or let it decide what is best for you and I and all of us as a society. Sometimes, just sometimes, the market–made up of individuals who are entirely concerned only with their own self-interest–is the worst possible option to carry out the wishes of society.
I’m a free-market guy and I think you know that. But I am a middle-of-the-road kind of guy and I wonder if sometimes you can’t grasp that concept.
By the way, you are right, your figures do correspond with the year Fair Fares was started (’02). I don’t know why I thought I read 2000. My apologies of course. You failed to say where these 20% national vs 11% local passenger numbers came from. Were they part of the article you referred to earlier in your post? Couldn’t find them. Anyway, sorry I don’t have my own research staff to verify the claims put forward in a press release. I figure if the airport is going to stick its neck out to a bunch of nosy reporters, its claims are probably at least close to the truth.
I’ll disagree that justifications for subsidies do not make economic or moral sense. The economic sense is inherent in how our country has evolved from a largely laissez faire system to the mixed system we enjoy today. Honestly, the market in a purer form let us down way too many times. You don’t have to be a historian or a student of human nature to understand why it is important sometimes for government to intervene in the market. Too many scandals, abuses of power, and monopolies in the past, not to mention the interest our government has in a stable national economy. The moral correctness of subsidies, of course depends on your moral lens, be it deontological or teleological, among others. Point is, there is not necessarily a “right” or a “wrong” answer. But you probably hate this “gray” area stuff, right? Correct me if I’m wrong, but you seem to prefer things pretty black and white. Trouble is, that is practically impossible to expect in situations like this.
I chuckled about the “nosy reporters” in Wichita. If you find any, will you tell me about them? That’s really funny.
I think I can understand how you like subsidies and taxes. If things don’t work out the way you want, you look to government to correct it. That’s a pretty good deal for someone who isn’t willing to let people live their own lives.
Considering downtown development: what happens when people and businessmen invest their own money? Not much gets spent downtown. Instead, development happens in other parts of town. I gather that you don’t think that’s right, so you propose to tax and give money to people to induce them to build where you think they should have. This is government, by force, overriding the decisions that people made themselves using their own free will. It substitutes your judgment for theirs. You may believe that downtown development is a good thing, and certainly our local government does, but people spending their own dollars haven’t totally agreed.
Does taxing people to subsidize business — that is, providing corporate welfare — improve the image of Wichita, and the quality of life in Wichita? That is not a given. Subsidies overrule the judgment that our capital markets have made. It forces us to invest in ways that people have decided against, unless forced to. The result is that we, as a town and a nation, are poorer. Capital has been allocated inefficiently.
And by the way, profits are the way that companies can know if they are meeting a need and doing so efficiently. You seem to imply that self-interest and greed are bad things. Isn’t it true that a business can’t charge any price it wants? That it must compete in a market and provide a service or product that people want, at a price they are willing to pay? How is it that a business increases its profits: by raising prices to whatever it wants, or by efficiently providing what customers want? But with subsidies, businesses don’t have to worry so much about that. They are isolated from the discipline of the market. They rely on governments rather than markets for survival. Instead of earning money by satisfying the customer and increasing efficiency, they rely on government — that is, taxpayer — handouts. Instead of raising capital in markets where they must compete with others, they ask government to give it to them. I ask you: who is greedy and consumed with self-interest?
Should we examine the self-interest of politicians? You mentioned scandals and abuses of power. Do we need anyone to connect the dots here?
I think you implied that airlines had been charging outrageous prices for flights to and from Wichita. After all, isn’t that what the subsidy cures? But was there ever any evidence that airlines “wronged” and illegally charged fares that were too high? It may be that providing service to a small market like Wichita is inherently expensive, and therefore high fares follow. But the subsidy doesn’t do anything about controlling the costs of providing air service to a small market like Wichita, while it does set a limit on the price that can be charged. This creates a situation where we should not expect to see any improvements in air service in Wichita, unless we pay subsidies. As I mentioned earlier, there are fewer flights to and from Wichita today than at this time last year.
Can you imagine an airline such as American or United deciding whether to add service in Wichita, or even stay in this market, when we pay their competitor several millions each year, and are preparing to pay even more?
We must rely on markets — people freely transacting for whatever motivations they may have — instead of government. To rely on government means those who take the time to lobby and cultivate politicians win, and their victory means that everyone else must follow along. When markets provide solutions people get what they want, instead of what others believe they should want.
Please don’t say to me that you believe in free markets. I think you believe in them as long as they produce results you agree with. Any other result, and you want to tax and subsidize. Tell me, who is greedy and self-interested?
I’m moving to JoCo, so I don’t have a horse in this race. I’ll fly Southwest Air, so I’ll get to places faster nonstoop, and cheaper than Wichitans. Why don’t you examine landing fees? Maybe Wichita’s “leaders” have overpriced Wichita. Maybe if you are a hicktown “flyover” town, you need to give airlines ultra-low costs, to encourage them to land and fly out frome here.
Or maybe the problem is that Wichitains don’t care to get out much. Five years ago, I noticed that Tulsa’s population was 60% higher than Wichita’s. But Tulsa’s reported air paessenger volume was 400% higher.
How many of you know people who have never seen Niagra Falls, or an ocean, or a blue-water lake, or a snow-clad Rocky Moutain peak? I know more than a few.
I believe in free markets to the extent they produce good for society, not to the extent they do things that I want. You are still the one who is greedy and self-interested because you believe blindly in something that exists only to maximize profits. I believe in profits as well, but I also believe in something greater. Again, I take the middle ground and recognize there is not just black and white.
I believe it is wrong to let people live their lives to the extent that it hurts the lives of others. I have no quarrels with the stockholders of airlines–they deserve maximum returns, but these returns must be earned with honesty and integrity. I own stock and mutual funds myself, and I expect my executives and fund managers to conduct business according to principals. I expect solid returns, but I expect them to be earned appropriately.
Either you missed my point or I have not stated it clearly enough. I rely on the free market, but I also rely on government to provide checks and balances so the free market does not get out of control. We should not expect either the market or the government to be perfect–they have BOTH demonstrated their inadequacies. But to blindly trust one or the other to always do what is best is dangerous.
Heartlander, I’ll agree I don’t think Wichitans get out much. I think this has a lot to do with our reliance on a manufacturing economy. As I understand Tulsa, it has a much more professional workforce. Your average professional travels for business and for liesure far more often than your average blue collar worker does.
Nothing against blue collar workers, but this city needs to ditch its dependence on them. They might have built this city in another day and age, but the realities of the 21st century are beginning to bite us in the ass. Manufacturing is dying in America, so we desperately need to refocus our economic development efforts on the professional sector.
Case in point:Ticket from ICT to Manila: $1859Ticket from ORD to Manila: $1159Fly courier from SFO to Manila: $65-800, depending on your schedule and their need.ICT to SFO: $551OKC to SFO: $280Bus from Wichita to OKC: $61 round trip.City officials need to quit patting themselves on the back and get to work on something going west.
What honesty and integrity is there in AirTran asking our government for a handout, and in their implicit threat that the moment the handout stops, they stop their service to Wichita?
For the record, please, state what was dishonest about airfares before the subsidy started. Then, please, state what is honest about any government taking the property of one person and giving it to another. Because that’s what the subsidy does. Dress it up any way you want, but at the core, that’s what the subsidy does.
Your point is quite clear, Shocker ‘07. You want to reserve the right to overrule the decisions freely made by others so that the world conforms to what you want it to be. Is that the “something greater” that you believe in?
MrC – consider what might have happened if, instead of AirTran to Atlanta the city had gone with locally-based Air MidWest to KCI as a shuttle.
What is up with Manila?
Mr. C, agreed, we desperately need to find a way to expand the program to western destinations. Seattle, LAX, and Phoenix would be good starts.
KCL, you poor soul. I just don’t know what else to say. If you cannot understand that sometimes people’s self-interest cause them to do dishonest things, then obviously a discussion about ethics with you is a one-sided concersation because you don’t know the meaning of the word ethics.
Was it wrong for Robin Hood to rob from the rich to give to the poor? I’m understanding that your answer would have been a resounding yes. My answer is, “it depends.” In this example, the “rich” is of course the airlines but the “poor” is not Airtran. The “poor” is the flying public out of Wichita, KS, who paid some of the highest airfares in the nation prior to Fair Fares. They charged the maximum amount the market would allow, which is not inherently wrong. However, this did not benefit the city and its citizens whatsoever. It harmed our ability to function as a city. It harmed our ability to attract quality jobs. It harmed our ability to retain and attract residents. There’s a lot of harms there, KCL, for you to be so intent that these fares were appropriate. You are demonstrating something that is a major fault of our society these days: tunnel vision on the bottom line. Is it ethical for companies to employ sweatshot workers in other countries just to keep their costs down?
You believe that it is wrong for the government to intervene in any situation for whatever reason. I believe the free markets sometimes get out of hand and the self-interest of a few end up screwing the collective interests of society. There is no winning this argument for either of us, especially if you insist on ignoring any other consideration than what maximizes corporate profits.
Of course I understand how self-interest can cause people to do dishonest things. To the extent that means they cause harm to others, or to the property of others, that is wrong. That is one of the appropriate roles of government: to protect us from harm and coercion.
I find it very confounding for you to mention ethics and dishonesty in this discussion. I notice you did not address one question that I asked: what is honest — strike that — what is moral about the government taking the property of one person and giving it to another?
The perceived harms that you say high airfares caused Wichita: Do we really know if those were in effect, and to what extent? Of course people say high airfares were bad. The high cost of anything is bad, to the extent that low prices are preferred to high. Try an experiment, if you will. Consider a company with some number of employees who travel a lot. Estimate how much additional airfare that company might have to pay because of higher airfares in Wichita.
(Of course, we don’t know what airfares would be today if there were no subsidy, do we?)
After this, take into account that Wichita is a relatively low-cost city for many things a business needs. Try to estimate how much additional the firm would have to spend on rent, salaries, taxes, etc. if it was located in a city with low airfares. What do you think the outcome will be?
You accused me of the fault of considering only the bottom line. Isn’t that what the subsidy does — let people and firms increase their bottom line at the expense of someone else? Am I wrong on this?
As to sweatshop workers, ask yourself this: are these workers forced to work in these factories? To my knowledge, the answer is no. So as bad as the conditions in sweatshops might be, they must be preferable to the alternatives available to those people. They may make $2 per day or whatever, but that is more, and the working conditions better, than their available alternatives. The people who boycott sweatshop-produced products should realize that when these boycotts are successful, the sweatshop closes, and the workers go back to either starvation or to the worse jobs they had before.
OK, KCL, I’ll hold your hand and answer all of your questions directly.
First of all, AirTran did not ask the city for a handout. The city offered a handout. I know that is splitting hairs, but it is an important distinction. AirTran has publicly stated it is not interested in permanent subsidies. It wants to grow the market and operate profitably. The subsidies were intended to lessen AirTran’s risk in coming into a small market like our’s, not to sustain its operations here. It’s the Fair Fares organization’s job now to convince companies and citizens to take advantage of the service AirTran provides. Since AirTran did not ask for the subsidy, there is nothing wrong with them being honest and stating the obvious that they cannot continue to operate in a market that does not support them.
Here’s what was dishonest about airfares prior to Fair Fares: nothing. However, the effects of the airfares hurt our economy. Companies here cited airfares as a major concern to continuing operations and others jumped shipped partly because of it, ie Pizza Hut.
To illustrate my point, consider two types of discrimination recognized by courts: disparate impact and disparate treatment. Disparate treatment is overt discrimination. Disparate impact is discrimination that results from something that is not inherently discriminatory but still results in a discriminatory effect. In disparate impact, the disciminatory act did not have to have the intention to discriminate, just the result of discrimination. Now, I’m not saying that the airfares were discriminatory, I’m just illustrating the point that even though the airfares were not unethical, they resulted in harmful effects to society. The city, in this situation, had an obligation to protect its economy from further harm.
See my Robin Hood point to understand my feelings about whether or not it is appropriate for government to take property from one person and give it to another. In certain situations, this is appropriate if not desirable. Such practices should be limited in scope, result in bettering many more than it inconveniences, and of course, be legal.
Subsidies do not just increase the bottom line of someone at the expense of someone else. They result in other benefits–some nonfinancial–and that’s what I keep trying to explain to you. You are so focused on the bottom line, economic effects that you cannot fathom the intangible non-financial benefits. Or maybe you do not care about these things and only money matters to you. I don’t know, please clarify this.
Sweatshops are an interesting situation, aren’t they? What if the sweatshop employs children? What if child labor is legal in that country? What if the working conditions are dangerous? What if the workers do not understand the dangers? What are the company’s responsibilities in situations like these? This is heady stuff, ya know, and there’s not necessarily a black and white solution.
You said Wichita being a low cost city in which to do business offsets high airfares. If this were really the case, we would probably still have Pizza Hut, Rent-a-Center, Brite, etc. Obviously, either your free markets are faulty or your arguments against low fares are.
Oh, and none of us know exactly what fares would be today without Fair Fares, but the definition of insanity is doing the same thing over and over and expecting a different result. I think it’s common sense that fares would be very similar to what they were, adjusted for inflation and other economic factors, before Fair Fares. The airlines would not have lowered fares 40% just because they felt sorry for us.
What about all the bad conditions in sweatshops? If people choose them, then they must prefer sweatshops to what they were doing before. Is there any other explanation?
I don’t promote high airfares. I promote letting markets set prices rather than politicians. Markets represent people transacting freely, engaging in trade that they believe will benefit them. Politicians intervene in markets for all sorts of reasons, most of which are venal.
By the way, what are the non-financial benefits of the subsidy? Does a cheaper airline ticket have any benefit other than financial? Does subsidizing one company at the expense of other make you feel better in some way? It ought to make you feel awful, as to take the property of one person through coercion and give it to another is immoral, no matter how noble the purpose, and no matter how many legislatures say it is legal.
Pizza Hut took a $17 million charge for costs relating to the move to Dallas. How long do you think it would take them to recoup that cost in reduced airfares? Even if they could save $4 million a year, it would take four years to recover their investment, and that recovery would by no means be certain. Given that the Wichita guarantee to AirTran was $4.5 million for the first two years of the subsidy, Pizza Hut might have been wise to pay for the subsidy themselves.
The Christian Science Monitor reported that Rent-a-Center moved to Dallas because that’s where its new owner lived. The Wichita Business Journal reported that Brite-Voice moved partly because of the desire for better air service, but also because Florida offered a huge tax break and other incentives. Now they may all say that high airfares in Wichita caused them to move, but I think they are being polite when they do so.
And again, I’m not arguing against low airfares. Those are your words. It’s not obvious to me that my arguments for free markets are faulty.
I am continually surprised that you are so opposed to the forces of self-interest and people trading in free markets to better their own lot. I borrow a quotation from the economist Walter E. Williams, who in turn quotes Adam Smith:
Through serving the wants of one’s fellow man, one acquires more for oneself. That is precisely what Adam Smith meant when he said, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.” He added, “By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”
Shocker ‘07, I don’t even know why you bother to argue with me about this. The forces in favor of the subsidy won, and by a huge margin. The subsidy is likely to be a fixture for many years to come. I think your willingness to keep up this dialogue reflects that fact that many people, deep down inside, are uncomfortable with things like this, and they need to rationalize their feelings.
Actually, KCL, it pisses me off that there are people who don’t give a damn about this city and would rather see it wither away and die than intervene in the precious free markets. That’s why I’m arguing and that’s why I feel intervention is necessary–the interests of the many outweigh the interests of a few.
Your quote reinforces my argument that people and organizations will always act according to their own self-interest, so something needs to protect our collective interests from abuses. In the situation where airlines acted in their own self-interest to the point where it harmed the economy and quality of life of an entire city, the city is then justified in taking action to eliminate or lessen the effects of the self-interest.
Again, you seem perfectly content in letting people’s self-interest take control of themselves and take advantage of others. I am not comfortable with this from not only an economic perspective but also a moral perspective. You seem to be against redistribution of property in any context, I feel it is sometimes justified. To me, sometimes the end justifies the means, but not always. This is a gray area so I’m not surprised if you don’t understand.
You claim that the high airfares harmed our city, and I think your prime evidence is the companies that left. I presented some evidence to the contrary. I’m sorry that pisses you off.
And when does self-interest lead to taking advantage of others? If by taking advantage of others you mean harming them or taking their property, then I am not for that. Harming people or taking their property is immoral. Charging whatever price you want for the product or service you provide harms no one. As long as we have free and competitive markets, firms can’t charge whatever they want. They have to compete.
When you talk about harming our city, don’t you realize that we have fewer options for air service (no connections through Cincinnati or Salt Lake City, for example) in Wichita than what we had last year? Don’t you realize that price controls — that being the stated and desired effect of the subsidy — lead to less product being offered, and to less desirable product being offered? That is always the result of price controls. The only people who dispute that are the politicians who use price controls to gain votes. I am surprised that you, a person educated in business, do not realize this.
Someday when the so-called legacy airlines are tired of being punished by our local governments and they reduce or withdraw service in Wichita, that is when we will realize the harm that the subsidy has caused.
Shocker
Haven’t posted to this. It is interesting reading.
Shocker you are spending time arguing with a person who won’t even be honest as to their own political beliefs.
KCL before you get the dictionary out again I really do not care how you spin your nic. You are no liberal. As a liberal myself I find your use of the word offensive.
Shocker? This guys posts as to sweatshops should have been the “jumped the shark moment”,. Why waste your time with this GOP gargoyle? I’d jump in myself and tell this guy that the only reason people work in sweatshops is to avoid starvation. That would just make him smile.Then I could tell him that many would rather die than work in those conditions. He’d probably respond “Then they’d better do it, and decrease the surplus population!”
Recongnize that line?
What you got yourself here Shocker is either the epitome of an Ebeneezer Scrooge before the ghosts came capitalist, or a particulalrly long winded troll. Neither is worthy of your time. You’ve done nothing when you’ve bested a poster who can’t read anything but a ledger or a bottom line.
I mean he is evoking Adam Smith via Walter Williams for crying out loud. And you are asking him “Please sir, may I have some more?”
You may as well be arguing with a paricularly articulate cash register.
JR, I am no liberal, you are correct, if you use the meaning of a liberal as used in today’s politics. But classical liberal, that’s what I am. Evidently you did not read the definitions that I posted for you.
And I don’t advocate sweatshops. I simply remarked that sweatshops may be the best alternative that some people have. That’s not the same as approving of them. I think you’re saying the same, aren’t you, when you point out that their alternative is starvation.