Andrew...oh guru of airline economics gurus...riddle me this:
US Airways is about to start charging a few dollars for soft drinks. In a normal economic environment this would spur those of us who still fly to buy a can or two of Diet Coke at Cosco at 50 cents per can and bring it on the plane. But this isn't a market in any sense of the word because TSA reguations prohibit anyone from bringing any container with more than a few ounces of liquid...including a sealed soda can...through security.
So doesn't that make any airline selling soda or juice for $2/can (at least I assume you get the whole can) a government sanctioned monopoly?
But wait, there's more.
If US Airways is charging $2/can, shouldn't we expect that the one alternative passengers have to buy water and soda --the concessionaires at the airport -- to compete by selling the same thing for, say, $1.75?
If that's the case, shouldn't we look at the stock of companies with airport concessions as a good buy right now?
My day job is as a managing director in a public relations firm. Many of my colleagues and I know many people in the media because that's one of the things we're paid to do. But many of us knew Tim Russert because we wanted to.
I first met him about 30 years ago when he interviewed me to be Senator Patrick Moynihan's budget staffer. His questions were tough even then and I didn't get the job. He interviewed many clients and friends over the years since then and preparing for a Meet The Press interview was always one of the most intensive things I ever had to help them do.
My most recent meeting with Tim was at the Meet The Press 50th anniversary celebration. I was hardly the most important person in the room, or even the 500th most important person in the room. But he greeted me and the BTW with a sense of style and appreciation for our being there that made us both feel special.
I have been working my way through a fascinating book by Professor Geoffrey Hodgson, Economics in the Shadows of Darwin and Marx. They were the two great theorists of structural change in complex systems in the nineteenth century, and I've been looking for new ideas on how their theories have been applied and adapted in modern economic scholarship. This sentence, in a chapter comparing their worldviews, was too interesting and amusing to keep to myself:
Marx and Engels characterized Darwin's doctrine as an inappropriate extension of the norms of capitalist competition to the natural world.
Today, the Urban Institute Brookings Institution Tax Policy Center published a detailed analysis and comparison of the tax policies of Senators McCain and Obama. It represents the most detailed and analytically sound study of their tax policies we are likely to see before the election.
It concludes that compared to current policy, Senator McCain would cut taxes by $628 b. over the next 10 years and that Senator Obama would raise them by $734 b. over the same period. Most of Senator McCains cuts go to middle and high income individuals, while most of Senator Obama's cuts would go to low and middle income individuals. Both would raise revenue by broadening the corporate tax base, and Senator McCain would cut the top corporate tax rate from 35% to 25%. Senator Obama would also raise the capital gains and dividends taxes and eliminate certain foreign tax benefits for individuals and corporations.
It depends upon whom you ask. Most business leaders and investors favor Senator McCain's low tax, less government spending, free trade stance, despite McCain's admission to The Wall Street Journal on November 26, 2005 that "I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated." However, if you ask low-income workers, the poor, those without health insurance, and those whose jobs have been outsourced, Senator Obama would be favored, despite his lack of business experience. The differences are stark and clearly defined.
However, as a "deficit hawk," I have a much more difficult time deciding between the two. How much, if anything, would they do to lift the terrible $3.9 trillion of additional public debt that President Bush has incurred on behalf of our children?