"Robert M. Gary" wrote:

On May 9, 4:39*pm, Larry Dighera wrote:
On Fri, 9 May 2008 16:11:13 -0700 (PDT), "Robert M. Gary"

In fact, that is what gov't regulation does. It disrupts the natural
forces of the market and directs artificial amount of money towards
certain people.

There's little question that government regulation "disrupts the
natural forces of the market," but I don't see that as a bad thing. *

I understand, and I understand there are a lot of people like you. For
many of us the natrual forces of the market are very intuitive but for
others its a difficult concept. In a nut shell, as long as producers
have to compete for customers, customers will get the best value
(based on what is important to them). In the airline industry
passengers have said over and over again that they want cheap fares
and are not willing to pay extra for comfort. Several have tried to
create "premium" airlines but they always fail. If someday passengers
prefer comfort over price the market will change. There is a reason
BMV sells better cars then Kia and its not because they are nicer
people.

I agree with all your points above, but am not against government
regulation. I think it has its place, where social objectives
over-ride what particular participants in a completely free market
transaction may prefer. For instance, in a completely free market, the
best win-win transaction between a chemical company and a farmer may
be pesticides that, when used, create environmental or health risks to
the rest of us. Regulating the market for those products is more
efficient than trying to police their use. Back on topic, there are
valid social reasons (such as safety) to regulate air travel. But
regulating which carriers can go into which markets, and fixing prices
to force carriers to compete on services that buyers would rather give
up for more attractive prices is not a legitimate government role,
IMHO.

Controlling consolidation is a legitimate role for regulation, but
that is not an airline regulation issue. That is an issue of proper
enforcement of anti-trust laws to preserve competition.
--
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