Re: Neoclassical bizarreness!!!

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

The article mentions the underlying problem.  In a competitive market, prices go to
marginal costs.  As long as there is an empty seat in a piece of equipment with
enormous fixed costs, there is pressure to cut prices.

Airlines can also cut costs.  I just read in the WSJ that one airline is only giving
blankets on international flights.  They can also cut maintenance ...  we don't want
that, but it might be happening & certainly would happen more often without
regulation.

Markets cannot work in that environment.  Yes, you are right that the airlines were
"coddled" before deregulation.  The treatment was successful, but the patient is near
death, if not dead.

In the end, the taxpayer will be left paying the costs.  David, you might be the only
honest libertarian left in the US.  Those in power are "pork libertarians" -- pork
for me and my friends, to hell with the rest.
 --
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu