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Sorry Matt but bullpucky. In the many years before Covid airlines world wide made stratospheric profits. They, as in financial institutions in 2008, paid out those profits. But when down times occurs they EXPECT to be bailed out. This issue is bigger than regulation of operations. It is big capitalism running a fixed game and we the people are the punters who are paying for it while politicians and political leaders act like they are helpless. They are just hopeless.

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Aug 25, 2022Liked by Matt Stoller

I can't read the STAT story on Autism because of the paywall, but my son is autistic and I am in a lot of Facebook groups with families of autistic children. That may be an interesting story to dive into. My son is Level 1 (high functioning) and he does not qualify for ABA therapy anyway, but ABA is pretty controversial in the first place. Many adults with autism say it was harmful for them. However, a lot of insurance companies force families into that treatment. That is what I keep reading in these groups from parents who want to have other options.

I can see why equity would want to get into it, and how it is even better now because of COVID. We actually moved from a smaller city to a metro area because there are a lack of providers and the wait lists were exacerbated by 2020. There are more kids with developmental delays that need more help as well from school and daycare shutdowns (and IMO, masking neurodivergent toddlers). It would be profitable to clear out all those wait lists.

A lot of these services *should* be covered by the school system, but they are so backed up. Parents with means go private both for evaluations & therapies. That is what we do. My son does not get ABA, but he is supposed to get Occupational Therapy via his IEP and it has been months with no resolution.

These articles hit some points.

https://www.thenation.com/article/society/private-equity-autism-aba/

https://fortune.com/2022/05/13/autistic-community-reckoning-aba-therapy-rights-autism-insurance-private-equity-ariana-cernius/

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From the graph it looks like the Obama administration went from about 60 enforcement orders in 2011 to a low of about 15 in 2015. Sure they hit a **then** low of 6 under Chao, but Bit Boy has the NEW record low of 4.

The trend was well in place before.

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It seems like airlines could benefit significantly from partial re-regulation but perhaps not full re-regulation. Guaranteed rate of return and rate cases lead to lots of bloat and nonsense, and captive regulators at times (e.g. Alabama's public utilities).

The best case seems like the FAA (or some similar entity) acting as a middle-man / clearing house for all flights, with standardized rules for things like baggage, seat selection, etc. The companies could offer what flights they want at various prices (blind) and customers could select their flights based on the offerings. We very easily have the technology to run a market like that, and it would allow both the flexibility of modern cheap routes but also certain requirements (e.g. offer a certain amount of smaller city routes every day/week/month).

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Think its true that consolidation is what was needed to create financial stability in the industry.. but am not sure that it completely comes from price regulation as an oligopoly. There's a chance that by becoming larger airlines, the economies of scale gained would reduce a lot of the fixed costs (which Matt points out was a big issue previously) to a point where the industry could financially run more smoothly. From every big merger that happened starting 15yrs ago, airline prices in real terms have actually kept going down.. price competition is still there. That being said, flying does suck a lot more than it did 15yrs ago, and while they still might be competing on price, maybe as an oligopoly, they gave up competing on service.

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deletedAug 27, 2022·edited Aug 27, 2022
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I think its worth pointing out some of the negative consequences of regulation pre-1978. The CAB had to approve every single new route and the fares associated with those routes.. you can only imagine how inefficient that would be. There are well known stories of the CAB taking more than 5 years to approve a new proposed route, and only after being sued. Planes on average flew around half empty. Airfare in real terms were much higher than they were today and air travel was more inaccessible to the public. (Upshot though.. they treated their customers much better and flying was a much more comfortable experience).

Deregulation was not something pushed by the industry.. most major airlines at the time were against it. The regulatory system before had effectively served as a moat to their interests.

BTW.. I don't this is completely correct >> "consumers and states are barred from suing the airlines over consumer or safety issues… effectively a subsidy to the industry’’

A consumer can sue for injury. States are blocked because the ADA intended for all aviation matters to be handled on a federal level. The goal was for aviation to be regulated consistently across the country. That is beneficial to the industry, but I wouldn't call it a subsidy.

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deletedAug 28, 2022·edited Aug 28, 2022
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Some of your points I agree with you on.. I'm not a fan of the bailout model. I just don't think these points are applicable to the 1978 airline deregulation. We need new regs (and enforcement) today to correct the service problems we are seeing today.. but not sure the pre-1978 system is something we want to go back to.

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Okay.. I am just not sure that the pre-1978 airline regulations are the ones to dust off.

Have you considered that the pre-1978 regulations were actually designed by airline executives in the first place? Crony capitalism in the US has a very long history (tbh, I don't know when there was a "before crony capitalism"), and reading through how these regulations worked, it seems they were designed to protect and enrich the established airlines. Like I said in previous post, most airlines were opposed to deregulation, and in the subsequent years many that poorly run went out of business.

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