Re: A hypothetical exam essay question

[Ed Weick]

I'll take a wild guess.  It's not really health of the airlines or the airline industry that's at stake, but the airline industry as a symbol of economic power, prestige and certainty.  An America without planes flying, even if those planes flew mostly empty, would be a tremendous blow to the American self-image.  The American Government's strategy has to be one of saying: "Look, the planes are flying.  They're safe.  Trust us, we'll keep them safe.  Now go back an use them."   Subsidizing individual consumers of air travel probably wouldn't work.  It's not an economic issue - something that people would respond to rationally.  Amercans who fly can afford to do so.  Given the shock of seeing four aircraft hijacked and crashed within the space of a few hours, the issue is one of overcoming tremendous fear and uncertainty and a reluctance to go anywhere near an airport no matter how cheap the flight.  The only way you can overcome that in a relatively short period is by a symbolic demonstration that very strongly appeals to emotion.   Ed Weick   Visit my rebuilt website at: http://members.eisa.com/~ec086636/ ----- Original Message ----- From: G. Stewart To: [EMAIL PROTECTED] Sent: Friday, September 28, 2001 11:35 AM Subject: A hypothetical exam essay question Background: (Excerpt from an article forwarded to me today)  From Slate magazine, an article by Steven E. Landsberg subtitled "The airline bailout enriches stockholders at the expense of taxpayers:"  "Let's be clear about what this bailout will do for the flying public: exactly nothing. It won't keep any planes in the air that wouldn't have been there anyway. Airplanes are flown when it's profitable to fly them, and they're not flown when it's not profitable to fly them. Giving cash to the airlines doesn't change the profitability of any given flight, so it doesn't affect any decision about which flights to offer. <snip> So, what does the airline bailout accomplish? One thing and one thing only—it enriches the millions of people who own airline stocks at the expense of the millions of others who don't. And in the process, it undermines the very principles that we uphold and our enemies want to destroy.   Hypothetical exam question:   Is Landsberg right? If so, why are governments not bailing out the airlines by making it less expensive for people to fly? Why is there no vociferous lobby for reducing ticket prices, perhaps through a voucher system temporarily reducing the costs of flying? Wouldn't this be a healthier form of bailout both for the airlines and the public than just giving cash to the airlines? Wouldn't a reduction in ticket prices to the consumer be more likely to maintain jobs and lead to a resumption of normal airline activity? Are resources that might be used against terrorism being needlessly wasted by a straight "bailout" of the airlines? Discuss.   Regards,   Gail