Title: Re: Airlines
I watched discussion of this on C-Span last night, and I believe the politicians said there would be a deductable.

There is also, I would think, something of a moral hazard issue in compensating the airlines following a tragedy that was caused, at least in part, by the failure of their safety policies or lack thereof, is there not?
 
Bryan Caplan <[EMAIL PROTECTED]> wrote:
Alex Tabarrok wrote:
>
> The President has authorized some 15 billion dollars to bail out the
> airlines and now travel agents and a host of others are asking for help
> also. Question: Is there any economic defense for this sort of action?
> After all, if the demand for air travel has fallen then isn't the
> optimal response to reallocate resources from the airline and related
> travel industries into other industries?

Especially when the negative externality of flying has been shown to be
far bigger than anyone imagined!
--
Prof. Bryan Caplan
Department of Economics George Mason University
http://www.bcaplan.com [EMAIL PROTECTED]

"Familiar as the voice of the mind is to each, the highest merit we
ascribe to Moses, Plato, and Milton is, that they set at naught
books and traditions, and spoke not what men but w! hat *they*
thought. A man should learn to detect and watch that gleam of
light which flashes across his mind from within, more than the
lustre of the firmament of bards and sages."
--Ralph Waldo Emerson, "Self-Reliance"


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