On 26 Sep 2001 09:15:16 -0700, 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? 

The gouvernment has mandated extra security measures that cost money,
but do nothing towards reducing the risks and increase hassle to
travelers (and thus decrease value). So you could defend that some
compensation is justified. But 15 billion? Is this a record in rent
seeking by single industry?
As to the costs of higher insurance premiums: Airlines in Europe are
already passing them on the the travelling public, at around 10$ per
flight. I guess it will spell the end for the extremely low budget
companies like Easyjet...

Krist



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