Deregulation never seems to result in more competition, just more consolidation and more and more powerful companies with increased lobbying powers and personal connections to top government officials.
Pre deregulation, the US government set the routes and prices, and even if an airline could exist. Eg. Southwest Airlines was forbidden to fly outside Texas. Prices were way higher and flight routes restricted. Very different today... Affordability and availability way up, overall enjoyment... that’s up to the traveler...
Southwest couldn’t fly outside of Texas because they chose to use Love field as their base. Love was cheap for them to get into because flights from there had already been restricted in an attempt to shift commercial flights to the fledgling D/FW international airport. Two airports in Fort Worth were similarly restricted and shifted entirely to general aviation.
Southwest back then was a very different airline vs. today; they acted more like a bus service between the major Texas cities than an airline- cheap fares, departures every 20 minutes to each destination, tickets generally available on extremely short notice without a markup.
They had to change their operating model significantly after 9/11 because of the new security measures. For example, They were exclusively using at-gate checkin, with reusable boarding cards that you gave back when you got on the plane.
That’s the origin of their first to checkin is first to board system; it originally reflected the order people physically arrived at the gate. And with the frequent departures, the first boarding card generally went to someone who had just missed the previous plane; there was no upcharge or hassle for getting on an earlier plane than you had a ticket for, so long as there were seats available.
Southwest was founded before deregulation and planned to fly exclusively intra-Texas routes to avoid federal route & fare planning. Obviously they also saw a market for the shuttle service they were running.
Separately, as part of the plan to build DFW all operating airlines at Dallas and Ft Worth signed agreements to move all service to the new airport once it opened. Key word: operating, Southwest wasn’t flying yet when the agreement was signed.
Between the agreement and DFWs opening Southwest started flying their shuttle service. Knowing that wouldn’t work from DFW, and since they hadn’t signed the agreement to leave, they planned to stay at Dallas-Love.
This sparked a bunch of lawsuits and other fights but the end result was the Wright Amendment which heavily restricted flights from Dallas-Love. The restrictions were a response to Southwest, not an initial factor in their plan. They were also another form of regulatory capture, since the incumbent airlines used their connections in the federal government to get a law passed restricting their competition.
Good regulation is good, and necessary. Bad regulation is bad, and should be adjusted or removed. Deregulation as a policy only addresses 1/3 of the above insights. Basically, it's lazy.
It's lazy because voters don't know or care about "common carrier" and "first to file" and arcana like that.
The alternative is to let all the folks who know the meanings of those sorts of things make the rules. Note that they will not be representative of the country as a whole. In particular they will be overrepresented by special interests andoneyed, entrenched incumbents.
One of the arguments for deregulation is that we just aren't good at fair regulations sometimes and no regulations is at least even-handed.
Hand waving all that as 1/3 the insight lacks quite a bit of nuance... and the lack of nuance is really why "good regulation" is so hard to come by.
Practically every position is nuanced. We all have complex reasons for why we believe things.
Would you say that your attitude describes typical de-regulation as a policy? I have a hard time believing that it's a nuanced view if instead of trotting out specific examples that you care about and will specifically address, you say "de-regulation" so your constituency cheers. (Not you, specifically)...
While most political positions are at least coming from a place of truth, what I think of when I hear de-regulation is not "some regulation is overreach and should really be peeled back because it's not fair xyz, here's what's not fair", it's the "government has no business injecting itself between me and the money I could make by introducing untold externalities into a free market system."
Good regulation is hard to come by, I think, because we don't like to maintain things. We see a problem, let's make a rule. Now the rule is a problem. Let's remove the rule. How about you decide if the problem would exist in the same or another form without the rule and try to adjust it to match the new problems?
> ...government has no business injecting itself between me and the money I could make...
Prepare again for more nuance. My position wasn't about rights but about competency. And it's not niche for folks with libertarian leanings. Reagan famously said the nine most terrifying words are "I'm from the government and I'm here to help" when criticizing government overreach.
I think part of the problem is that your mental model of problem solving presumes individual actors can have a lasting impact in complex and bureaucratic contexts.
It's not the same getting a committee of folks to think through problems the same way and to maintain the same rational approach over time. Keep in mind that these folk are biased (maybe unconsciously) in different ways, particularly in favor of competant lobbyists and potential corporate employers.
So it might be simpler to presume simple mechanisms, even doing nothing, might be the sanest and most democratic approach. Often problems, like lack of progressive pricing, should just be solved directly, through minimum incomes for instance.
Are you truly proposing doing nothing for critical domains like flight safety and food safety ? How many thousands of people will need to die before you change your position ? Are you even aware of the history of the formation of agencies like the FAA and FDA ? The FAA was formed after the Grand Canyon mid-air collision at the end of a series of air accidents. The FDA was formed after a truck-load of food adulteration and deaths. Please read up on Wikipedia on the conditions that resulted in their creation. You might possibly be enlightened.
I mean this is facially untrue. We’ve been undergoing a 70-year long period of deregulation, and it’s been overwhelmingly positive. (Not to mention, it’s been copied by nearly every Western European country, and has markedly improved what during the 1970s and 1980s were very weak economies.)
We can get next day packages from Amazon, for example, because of the deregulation of the airline and trucking industries: https://parcelindustry.com/article-5131-De-Regulation-of-the.... Previously, package delivery would take much long because packages would be transferred from carrier to carrier operating on regulated routes with regulated prices.
In the electric industry, deregulation of the generator side of the industry has caused wholesale electricity prices to plummet. Today, more than half the cost of electricity is from the still-regulated, retail distribution side.
We have also largely avoided regulation of the first major post-FDR industry: the Internet. If the US operated the way it did in the 1950s and 1960s, we’d likely have regulated prices per ad impression and things like that. Instead, the industry has flourished in the absence of regulation.
There is a reason anti-deregulation screeds focus on isolated incidents and are heavy on narrative. Why are we fixating in one instance of failure instead of looking at what airline safety records have looked like over the past decades overall? Objective views of numbers and long term trends make the situation look far more rosey.
It doesn’t seem very useful to talk about “regulation” as some sort of singular entity.
When you talk about the positive results of deregulation, that’s all economic regulation. Freight being run on regulated routes with regulated prices was protecting various groups’ economic interests. Usually at the implicit expense of the economic interests of everyone else.
Safety regulations are a completely different beast. Safety regulations in aviation have increased massively over this same timeframe, and the result has been an even more massive increase in safety. Crashes went from routine to unheard of despite a huge increase in activity. Cars have seen a similar increase in safety regulations and in actual safety, although the safety gains have been more modest and seem to have stalled out in the last five years or so.
That doesn’t mean safety regulation is necessarily good or that deregulation couldn’t be helpful sometimes. But the actual track record in recent decades is completely contrary to this idea of decreasing regulation providing better results.
We’re fixating on one instance of failure because it looks like a canary in the coal mine indicating a threat to the safest mode of travel ever devised.
> Safety regulations are a completely different beast.
Only they're not. If you impose a billion dollars in fixed regulatory burden then you can no longer have sub-billion dollar companies.
But lack of competition erodes everything -- even the safety rules, because bigger companies are more capable of capturing regulators.
Any regulation which is the direct cause of a lack of effective competition is doing more harm than good.
> That doesn’t mean safety regulation is necessarily good or that deregulation couldn’t be helpful sometimes. But the actual track record in recent decades is completely contrary to this idea of decreasing regulation providing better results.
That's kind of the point. The entire frame of "regulation bad / deregulation bad" is a farce. What you actually need is regulation that maximizes the ratio of benefits to regulatory burdens. That means removing burdensome and ineffective regulations and having efficient and effective ones.
But evaluating regulatory efficiency and effectiveness is dry and non-partisan. Framing it as "we need more regulation" is failing before you even begin.
This 737 MAX debacle is a case in point. It came about because Boeing was trying to avoid the high costs of recertification, so they didn't change things that could have made the plane safer because changing them would have required recertification.
So we have "safety regulations" negatively impacting safety by making it move expensive to improve safety than not. That's not a case of needing more overall regulation or less overall regulation, it's a case of needing to replace worse rules with better rules. The ideal outcome is that the net regulatory burden becomes lower and as a result it becomes less expensive to make changes that improve safety.
If I interpreted this argument correctly - regulation is bad, costs money. How much is a human life worth? Clear to me is that Boeing did that sick math and rolled the dice and F’d up royally and fatally.
FAA was gamed, but If you think Boeing would self regulate, I think you are on a different timeline where stockholder dividends are not the prime directive.
I understood his argument as: regulation is rigid and some regulations end up pushing things towards a bad ending, because actors in the real world don't always do what regulators imagine they will do. Eg the total costs of recertifying the plane are so high that it's worth it (for the company) to roll the dice to avoid it.
This isn't about whether more or less regulations should exist or not, but how we can build better administrative systems. When the regulations create an environment where only one or two mega-companies like Boeing can exist, combined with pretty much any democratic system where said company can have a direct influence on both the regulatory agencies (often through staffing via knowledge gaps in industry/academia where those in the company often are the only ones who know enough to make the policy) and policy making itself by elected officials in favour of just the current company not the future.
Simply put, the definition of 'failure' of a regulation needs to be broadened. Regardless if it reduced deaths by the company itself in the near term, if it adds long term risk to deaths/accidents in the future by encouraging regulatory capture and eliminating any competition but Boeings to exist - we are worse off as a society, period. The only option we are allowing is some pseudo-market mega-corps with monopolies and the mediocrity in both service and safety or public gov run companies (which do make sense occasionally, but rarely).
There's a few solutions I can think of here which isn't "all regulation is bad" or "lets only have mega corporations in every market via poorly designed regulation" or "let gov nationalize the markets":
a) Contextual oversight. Allow a certain level of freedom at the lower tiers of markets so a future competitor to Boeing can exist and challenge them on everything from prices, to technology, customer service, and safety (which yes is a massive competitive advantage, ask all the people who now refuse to fly in Max, what other options do they have? A single European version of Boeing?). While allowing the courts to expunge any company that sacrifices on safety or any other externality via tort laws, liability, via stronger consumer and property rights.
b) Constant pressure on regulatory agencies (possibly by an outside agency) to look for regulatory capture within agencies and severely punish civil servants and companies engaged in any backroom deals, creating policy/incentives which are barriers for competition with little/zero benefit to citizens, punishing companies for obvious lapses, etc.
c) Stop politicians from anointing themselves job creators and promoters of businesses. They should strictly be in an administrative role when absolutely necessary (to eliminate any forms of violence, coercion, externalities that courts can't handle, etc). This is the biggest source of the worst of a) and b).
When politicians think their job is to 'create jobs' themselves by creating monetary/policy incentives for companies, this inherently create incentives for kickbacks to politicians and moral hazards for companies, and therefore should not be the job of politicians period. The only "help" to companies should be to help get out of the way by eliminating useless policy OR streamline necessary administrative systems. Otherwise don't help them at all.
Companies should not be able to buy success and maintain success in markets (by that I mean monetarily regardless of behaviour or outcomes) by having influence from politicians. All policy should be neutral of company size (or tiered based on size, the way modern rent control has tried to stop disincentivizing new lower income buildings by not applying to new developments) and factor in small firms who can't afford a team of lawyers or checkbox checkers.
They might not 'like' it but they might not care enough as long as the stock goes up and the dividends keep flowing. The regulation should be there to prevent the erosion of certain boundaries, the eternalization of certain costs and the eventual public recovery of the profits.
Like most of the neoliberale 'economic theoretical models', the idea that the regulation is fully separated from the arena of the competition and thus cannot be captured and coopted is so ludicrous it begs the question how it ever became more than a joke in a b-list standup comedian's backup repertoire.
Planes are ordered because companies hope they can make a profit operating them (the hope is important, it does not necessarily mean they can). Which planes they order depends on many factors other than safety. Costs and risks of accidents are externalized through insurance, executive and shareholder indemnification and. as a last resort. bankruptcy. Then again, if they are seen as 'strategically relevant', or have the right connections, they can rest assured they will not have to pull in the 'last resort and will be bailed out of any troubles.
A German automaker was caught gassing the world population. They're still around, even having the audacity not to even change the brand name.
In theory, all regulations need to be carefully considered and walk a fine line in order to do more good than harm.
But I was replying to a pair of comments talking about the practical history of regulations over the past few decades. That history diverges wildly for the two types of regulation. Economic regulation was massively lightened, resulting in huge benefits. At the same time, safety regulations for airplanes and cars were massively increased, also resulting in huge benefits.
So, yes, the whole point is that “regulations good/bad/anything” is nonsense, as the recent history of economic and safety regulations illustrates.
What I'm getting at is that the types of regulation don't really have anything to do with it. It's not that all safety regulation is good and all economic regulation is bad (though if you wanted someone to disprove "all economic regulation is bad" you might be in for a wait). You can screw up safety regulations just as bad if you're not careful.
It's also difficult to evaluate these things based on statistical trends, because it's easy to pass a safety regulation that e.g. mandates a specific safety method, and then you get an immediate safety improvement by making that state of the art method universal, but as time passes that ossified requirement becomes stale and prevents newer, better methods from replacing it. And all you see in the numbers is the improvement from the original mandate spreading through the installed base over time, not the comparison to what would have happened when something even better was invented a year later but was prohibited by the rule from being deployed. (As evidence for this, the original 737 was introduced prior to the moon landing.)
It's also problematic to look only at the one target. If we improve aircraft safety per mile but only by making aircraft more expensive (or destroying competition, which does the same thing), that makes flying less competitive against alternatives that are much more dangerous, like driving. So you can get a safety improvement on paper even though the result is more people are killed.
That doesn't mean you can't make a rule that actually improves safety, but it's harder than it seems to get it right.
Sure. I’m just saying that the actual history of the past few decades in the US shows a stark contrast with these two types of regulations in terms of how they worked and the consequences they had.
Regarding measures that appear to improve safety but are actually a net loss because it encourages driving instead, the FAA does evaluate regulations this way. For example, this is why infants aren’t required to be in a child seat and are allowed to just be held by a parent. They determined that this requirement would cause more families to drive due to the extra cost, and the result would be a net loss of life.
>In theory, all regulations need to be carefully considered and walk a fine line in order to do more good than harm.
Yes, and one of the possible definitions of a (technical, safety related) regulation is "the added cost that the society is reasonably willing (or capable) to pay for a reasonable increase in safety"
The issues always revolve around how much the "reasonably willing to pay" is and what is the corresponding "reasonable" increase in safety (and how exactly to measure the latter).
Safety regulation might be a burden for aircraft manufacturers, but it is what enables competition among airlines. The reason we can have low cost airlines are because safety isn't really in question. Of course you want to "optimize" regulation, but deregulation as in leaving it up to the participants frequently can't support a competitive market.
It came about through short shortsightedness. The path they chose was in fact more expensive than the recertification cost. But even Boeing had come to dislike the regulatory paradigm they helped to create. I think most people are framing the regulatory paradigm as needing to revert to what we had, because clearly less regulation resulted in multiple bad outcomes.
Based on available reporting, Boeing chose this path not to avoid higher cost, but reduced time to market to compete with Airbus because, again, shortsightedness, lack of innovation and planning, and even lack of imagination that their competitor would do exactly what they did, and had no contingency and no response for ~9 months after the Airbus 320neo announcement.
I also can't take seriously any complaints about lack of competition in the U.S. market when it's so docile about competition law. The 1960's merger of McDonnell and Douglas is questionable, but the 1990's merger of McDonnel Douglas and Boeing directly lead to the loss of any remaining domestic competition in transport category aircraft. U.S. regulators are tacitly saying this is a natural monopoly, and yet should be regulated as if it's a competitive market.
Yeah, Boeing have made real clowns of themselves here.
> I also can't take seriously any complaints about lack of competition in the U.S. market when it's so docile about competition law. The 1960's merger of McDonnell and Douglas is questionable, but the 1990's merger of McDonnel Douglas and Boeing directly lead to the loss of any remaining domestic competition in transport category aircraft. U.S. regulators are tacitly saying this is a natural monopoly, and yet should be regulated as if it's a competitive market.
You're discounting the competition between Boeing and Airbus. They're clearly not a monopoly.
That said, it's possible to have two sets of bad rules at once, and it's even worse in that case. Then you get antitrust regulators approving mergers while industry regulators impose high barriers to entry, so that you get high consolidation with no way to break it because no one new will ever enter the industry.
Sadly that seems to be the status quo in multiple industries now. You have antitrust approving any merger that doesn't result in a literal monopoly even if there are only two or three companies left, meanwhile those companies practically ask the government for regulations that make sure nobody else can ever come up behind them because it takes a nation-scale company to survive the compliance costs.
Airlines are forced to certificate their pilots for the plane they're going to fly. How many lives have been saved by this regulation, in comparison with those which were lost because Boeing tried to cheat at said regulation? Ignoring that is the same as pointing to people killed by airbags, without considering those saved by them.
One example of a third way would be that when a plane is 97% the same as one you're certified on, have something between no and full recertification which is only 3% as time consuming because it only covers the differences between the planes instead of going back to square one.
I think you are also guilty of over constraining the solution space ... airlines want a new more fuel efficient plane with a certain size and passenger carrying capacity. Building a new plane for this need either involves training pilots on this new plane type or inherently unsafe engineering to deliver the new product without requiring the pilot retraining expense.
You suggest that we should sacrifice the rigor of pilot training to allow delivering planes without safety compromises ... I think there’s absolutely no justification for safety compromise in this scenario - the new plane will pay for retraining costs in a slightly longer amount of time than it would’ve had retraining not been required — oh well. That’s the cost of doing business and it’s absolutely without doubt that in this case - designing a plane that wasn’t inherently flawed would’ve been a better strategy for Boeing and for all of their 737 Max customers ...
The real question to learn from this tragedy is not how can we make it slightly less expensive to produce a new air frame — it’s how can we ensure that safety is not allowed to be compromised during the design phase of new passenger aircraft in service of _truly_ minor cost savings ... if we had a real regulator that was not captured - they should’ve had the flexibility to say no to the 737 Max very very early in the proposal process — and if necessary they should’ve been allowed to offer a tax incentive to offset some of the pilot retraining cost required by them not budging on safety requirements.
Building and deploying safe airplanes into real world use is more expensive than building unsafe airplanes — but that doesn’t mean it’s not worth the cost to society...
> You suggest that we should sacrifice the rigor of pilot training to allow delivering planes without safety compromises
Describing this as "sacrifice the rigor of pilot training" is illegitimate. If someone is already certified on a similar plane, the training they need is really only on the difference between the planes.
> I think there’s absolutely no justification for safety compromise in this scenario - the new plane will pay for retraining costs in a slightly longer amount of time than it would’ve had retraining not been required — oh well.
The problem is that monetary costs are still safety costs. Now the new thing costs more and people choose alternatives that may be less safe. If new planes are more expensive then older planes that are more likely to suffer wear-based mechanical failures stay in service longer. If air travel costs more then more people drive.
Boeing obviously screwed this up, but we gave them the incentive to screw it up, and that's on us too.
> The real question to learn from this tragedy is not how can we make it slightly less expensive to produce a new air frame — it’s how can we ensure that safety is not allowed to be compromised during the design phase of new passenger aircraft in service of _truly_ minor cost savings
But that is how you do it. You figure out how to achieve the cost savings without compromising safety. There is no law of nature that says they're mutually exclusive, and without forcing them to be at odds there is no longer an incentive to choose the wrong one.
>Boeing obviously screwed this up, but we gave them the incentive to screw it up, and that's on us too.
No WE didn't. THEY wanted to cut costs and it appears to me THEY cut corners to achieve it. This is like saying the professor made me cheat by making the exam artificially complicated and learning would have cost to much time.
This isn't a game or a class. If you have rules that result in preventable deaths in actual reality then you have bad rules. Even when there is plenty of blame to go around.
> ...but we gave them the incentive to screw it up,...
> ...Yes WE did...
Who is WE here? The general public who use the planes? The airlines who bought the planes?
The public and the airlines relied on the FAA. The FAA allowed boeing to self-cert. The FAA's job was safety. The FAA failed in that. It was their job and they didn't do it properly. It's the FAA at fault not some amorphous WE.
But that's not because 737 MAX aircraft flying in US airspace somehow didn't have the problem that caused the crashes. There has been plenty of coverage online of US pilots repeatedly filing reports with the FAA of "near miss" incidents in 737 MAX aircraft caused by the same problem.
So the FAA certifies planes that fly in US airspace but does not certify planes that fly elsewhere, and cannot therefore be held accountable for crashes caused by defective aircraft in those non-US airspaces?
According to the HN guidelines, you are in violation because you have assumed bad faith on my part. I will not engage further with you, tempguy9999, you are not responding to my most obvious argument. Good day.
Mine was not a bad-faith interpretation, it was the only interpretation I could make of your argument. I literally can't see any other. If that was my failure then in turn please don't assume bad faith on my part; instead assume my stupidity instead, and please re-explain in a clearer/different way.
Training to fly two very similar planes can be more dangerous than flying to completely different ones.
For example, some marks of Spitfire had engines that spun in the opposite direction to the rest of them. The aircraft were otherwise similar.
If a pilot gunned the engine during the take-off roll, the torque reaction will cause it to swerve. The pilot can catch it with the rudder if they are expecting it. If the engine is spinning the wrong way, and the pilot inputs opposite rudder, the aircraft will wreck it's undercarriage and roll over on the runway.
Whilst training to fly any variant, when a pilot has experience in other variants is obviously going to be quick and easy, expecting them to swap back and forth between variants is also clearly unsafe.
The aircraft type rating is exactly difference training. You don't start from scratch just because a type certificate differs between two airplanes. The whole point is to require that difference training, and for it to be specifically laid out.
Whereas without that, what did Boeing do? They gave pilots an iPad for difference training, and kept them in the dark about the differences between 737 NG and 737 MAX. That was their choice. The lie of omission by manufacturers is the whole reason why we have type certifications in the first place.
> The aircraft type rating is exactly difference training. You don't start from scratch just because a type certificate differs between two airplanes. The whole point is to require that difference training, and for it to be specifically laid out.
You're talking about training for completely different planes. Type training is commonly multiple weeks long. What I'm suggesting is something intermediate for two variants of a plane that are much more alike than that ("subtype training"), so that it's hours or days rather than weeks because there aren't as many differences to cover between two 737 variants than between a 737 and a 787.
> Whereas without that, what did Boeing do? They gave pilots an iPad for difference training, and kept them in the dark about the differences between 737 NG and 737 MAX.
Right, exactly. So they have the tiers too far apart. There is too big a jump between "here's an iPad" and tens of hours of training over multiple weeks, so there's a need for something in between for smaller variations.
I'm not talking about completely different planes. If you have a Boeing 737 type rating, obtaining a 757/767 type rating is more expedient than it is for someone who has no prior Boeing 737 type rating.
Further the regulations say whether a type certificate is required, and what goes into it, is up to the administrator. It's not strictly defined. You can in in effect have subtype ratings.
FAA regulations are very much dependent on delegating authority rather than detailing every nitpicky thing. They really aren't that complicated.
> I'm not talking about completely different planes. If you have a Boeing 737 type rating, obtaining a 757/767 type rating is more expedient than it is for someone who has no prior Boeing 737 type rating.
Aren't the 737 and the 757/767 completely different planes? Isn't the difference between a 737 NG and a 737 MAX a lot smaller than the difference between a 737 NG and a 767?
> Further the regulations say whether a type certificate is required, and what goes into it, is up to the administrator. It's not strictly defined. You can in in effect have subtype ratings.
It's not surprising that the regulators have that level of discretion, but that only helps if it's expected they'll use it like that, which seems contrary to what Boeing did expect given their apparent aversion to it.
>Aren't the 737 and the 757/767 completely different planes?
No. But then, given your questions thus far, we clearly don't have a common frame of reference, so I don't really know what you mean by completely different. They are not 100% different, that's for sure.
Consider this: the difference between a 737 NG and MAX is smaller than the difference between a 757 and 767. And yet the 757/767 share a single type rating. They were designed at the same time and have nearly identical cockpit layouts. And guess what, the Airbus 320 and 340 share the same type certificate as well, they're more different from each other than the 757 and 767 are to each other. But the two Airbus's also have the same cockpit layout, control systems, and software abstraction such that in normal flight they pretty much behave the same (obviously ground operations are different, they are rather substantially differently sized).
A "subtype" is just not applicable in this discussion. Any completely redesigned airplane from Boeing, in lieu of the 737 MAX, no matter its size, is going to so radically depart from any other airplane's flight characteristics and cockpit layout, that it would absolutely end up with its own type certificate. You can't design a new airplane model, and shove in the cockpit from a 737 NG. You can't and you wouldn't want to.
They dropped the ball. And the instant the Airbus 320neo was announced, Boeing was shown to have gotten caught with their pants down, and that has nothing at all to do with the regulatory paradigm.
I'm all for having good regulations. The dichotomy comes from those which say that all deregulation is good (which implies that all regulation is bad).
In this specific case, though, I suspect that measuring the "X% the same", and what the new training should be, is much more difficult than it looks at a first glance.
> So we have "safety regulations" negatively impacting safety
No we don’t. Other companies have followed the regulations. Boeing chose to value cost avoidance over risk to human life. The owners and management of Boeing are culpable.
> That means removing burdensome and ineffective regulations and having efficient and effective ones.
When we're talking about human lives, there is no regulation too burdensome or inefficient.
And your argument about there being too little competition is a little odd since hundred have been killed in two crashes because of competition.
> It came about because Boeing was trying to avoid the high costs of recertification, so they didn't change things that could have made the plane safer because changing them would have required recertification. So we have "safety regulations" negatively impacting safety by making it move expensive to improve safety than not.
That's absurd! The safety regulations were good, and the reason they didn't work is because the FAA hired Boeing to enforce them and Boeing didn't do so. Boeing only managed to flout the regulations because they fraudulently signed off their own planes as being airworthy. And the only reason Boeing got away with this is because they controlled the people in the FAA.
Your argument appears to be that Boeing cheated to get around the regulations, so it would be better if there were no regulations, because then Boeing wouldn't have to cheat. American capitalists are truly a special breed of human.
"When we're talking about human lives, there is no regulation too burdensome or inefficient."
This is not only not true, it directly contradicts how regulations are evaluated. Regulations are judged at the cost per life saved (or similar metrics), and are rejected if that cost is above some threshold.
I don't find the evidence you provide to back up your claim compelling. Nothing that you say suggests that deregulation is the reason for economic improvement, rather than other things that have also happened over the last several decades, such as the rise of superior technology, the end of the Cold War, or the invention of New Coke.
The first article you cite, about delivery companies, is from an industry publication. Naturally, they're going to advocate things they view as beneficial to the industry.
Your claim that deregulation is the cause of electricity prices plummeting, and that the regulated side produces more cost, are wholly unsubstantiated. Even if there was substantiation of the trend, that doesn't mean one caused the other.
Likewise, according to the article you cite, there's now _more_ regulation in some areas of the airline industry, like security. Maybe _that's_ why fatalities have decreased. (I don't actually believe that, but it's equally plausible.)
Objective views of numbers and long-term trends are meaningless in the absence of an effort to understand the causal relationships. Correlation does not imply causation. Compelling evidence that deregulation provides economic benefit requires an evidence-backed explanation of _how_ it has done so.
Edited to address your edit re: the Internet as an industry: Again, it's the same issue. You don't present any evidence that the Internet being unregulated is the reason it's successful - or even a contributor. And the scenario you propose about ad regulation isn't anything like the kinds of actual regulations that have been proposed, like net neutrality.
It's not untrue. It depends on the industry and circumstances. But to make a blanket statement either way ends up in a misrepresentation of whether deregulation is good or bad.
For example there have been numerous financial crisis over the years, generally in the wake of the financial industry deregulation.
The deregulation of carriers in 1996 (Telecomm Act) helped spur some competition within known telecommunication products (mainly wireline) but was unknowing of the new and emerging markets. Which is part of the problem with deregulation of moving markets.
I think, however, many have a perspective that deregulated industry often creates monopoly. Healthcare, telecommunication, search, retail, etc are all monopolized by a select few. Is there still small, heel-biter competition? Sure. But DigitalOcean isn't a worry for AWS, GCP or Azure. It's a facade of competition in the "open" market.
As stated:
> There is a reason anti-deregulation screeds focus on isolated incidents and are heavy on narrative. Objective views of numbers and long term trends make the situation look far more rosey.
This isn't the the case of regulation strawman argument. Financial markets were plundered by greed in 2008 due to deregulation. That isn't an "isolated incident". Almost nobody spent time behind bars for the actions of those who abused it. And we know that it wouldn't have taken place with proper regulation and oversight.
Regulation of safety is paramount. Auto manufacturers didn't buy into providing the 3 point seat belt as standard equipment until they were forced. Deregulation isn't a silver bullet, but in many cases it plays out as a zero sum game. Many people lose and many people gain. It's often a vehicle to shift power and wealth as history so directly has shown us.
The assertion to which I’m replying is: “Deregulation never seems to result in more competition, just more consolidation and more and more powerful companies with increased lobbying powers and personal connections to top government officials.” That is clearly untrue.
To use financial deregulation as an example. Yes, the 2008 crisis was bad. But on the whole, are people still worse off? When my parents bought a house in 1989, their interest rate was multiples higher than I’m paying now. One of the things that caused interest rates to collapse was securitization. Moreover, the boom times of the 1990s was also partly due to the financial system. It was deregulated banks that provided the private capital for the first tech boom. And, this website covers an industry that resists regulation at every turn—its bankrolled by investors largely free of regulations applicable to investors managing retail deposits, and numerous companies stay private to avoid public company regulations. What is the net cost-benefit from financial deregulation over the last 30 years, accounting for both benefits and costs? Pro-regulation folks never look at it in those terms.
There is no doubt that deregulated markets are leas predictable than regulated ones. Regulation can smooth out the boom-bust cycle. Thus looking at busts, instead of long-term trends, is a convenient way for pro-regulation folks to distort the overall impact of deregulatory measures.
> Yes, the 2008 crisis was bad. But on the whole, are people still worse off? When my parents bought a house in 1989, their interest rate was multiples higher than I’m paying now.
In 1980, Congress passed the Depository Institutions Deregulation and Monetary Control Act.
> Moreover, the boom times of the 1990s was also partly due to the financial system.
So surely you remember the tech bubble then and all of the consumer loss. One snippet to jog your memory: "Pets.com stock had fallen from its IPO price of $11 per share in February 2000 to $0.19 the day of its liquidation announcement." [0] I'm sure there were plenty of consumers who bought into that company under false pretenses.
> Thus looking at busts, instead of long-term trends, is a convenient way for pro-regulation folks to distort the overall impact of deregulatory measures.
What about if we flip that around, maybe... Looking at falsely inflated markets, instead of real earnings and growth, is a convenient way for pro-deregulation folks to distort the overall impact of regulatory measures.
Get rich schemes are unfair to the unknowing victim. There are more parallels with many of the questionable financial vehicles and products that turn up when no rules are in place.
Interest rates now are incredibly low because central banks are keeping them low in the aftermath of the 2008 crisis. But the fact that our economies need such incredibly low interest rates to generate growth isn't good at all. What will they do with the next crisis? Go negative?
You're right about next-day air freight (which is a thing that exists now that is insanely expensive), but you're wrong about Amazon using it. Amazon has warehouses all over the country. When you buy something that arrives the next day, it's not going in the air at all; it's coming in a truck from a nearby warehouse to your local package distribution center, and then going out for local deliveries.
True cross-country air freight can easily cost >$100 to ship a small package weighing a single pound. Nothing you buy online is using this service unless you're paying out the wazoo for it.
Where do you get the $100/lb? Just extending it to passenger flights, a cross country trip costs $250 (LA to NYC) and most passengers are > 100 lbs, so it’s $2.50/lb for even the most expensive passenger. Last/first mile from the airport to the pickup and delivery site will add to the package cost, but I’m just wondering where you get the $100 figure.
They didn’t say $100/lb, they said a package as small as a pound would cost $100+, that cost would’t scale linearly with weight but it might with box dimensions, similarly to how a single heavier person doesn’t cost more in passenger airlines but multiple people(seats) do.
Also, for an apples-to-apples comparison, try buying that cross-country plane ticket 2 hours before takeoff.
You don’t even have to take their word for it, you can get an instant quote right now from the freight companies (most places that aren’t amazon-scale probably pay about 30-40% of that retail rate)
I didn't say per pound, I said for a single pound package (in shipping, the first pound is by far the most expensive). I got that figure by getting an actual quote for sending a package over night from NYC to SF. Feel free to play around on the UPS and FedEx websites; you'll see similar figures.
Also, the passenger thing isn't remotely comparable because last-minute plane tickets aren't that cheap, and you're forgetting to account for the 12+ hours of labor involved in sending a mule along with your package. If you already had someone going there and back that day anyway, sure, sending the package along with them would be cheaper than sending it through UPS Next-Day. But if not, just sending the package will be way cheaper.
> We’ve been undergoing a 70-year long period of deregulation
This is incorrect. Deregulation only started in the late '70s. There was adequate oversight and anti-trust enforcement until then. The unusually high growth in that period was during an _expanding_ government role (and wider union membership and 90% tax rate for the extreme brackets). Since the 80s, GDP growth has slowed to low single digits with continuously rising inequality.
>In the electric industry, deregulation...
Deregulation in this area also resulted cutting of power to tens of millions as blackmail for orders of magnitude higher rates until the state stepped in again.
And while initial deregulation of airlines has had many advantages, stifling the already inadequate oversight from FAA and thinking it will produce better out comes is literally fatally flawed reasoning.
> The unusually high growth in that period was during an _expanding_ government role (and wider union membership and 90% tax rate for the extreme brackets).
And also during a unique period in history, when the US economy was the only one in the world not devastated by World War II and when there were huge new markets opening up that made corporations willing to pay high wages and taxes in order to capture market share. By the 1970s that was ending as markets saturated and other countries rebuilt their economies and caught up.
Absolutely true. I was just dispelling the alternative history where the depression was due to over regulation and the post war boom was due to removing regulation.
And incidentally dispelling the idea that, where necessary, adequate oversight does not kill an economy.
Not a single point you made addressed what you replied to. They never said deregulation was bad for service or prices. It's bad for competition because it has been proven consolidation wins out, especially in Texas, by AT&T, American Airlines, NRG, etc.
I work for a large company whose goals are not only to become largest, most profitable, and never lose money ever again. But also, to gain strategic ownership where ever possible by acquisition.
Well, that is exactly to be expected and is exactly what is predicted by economic theory: Markets only actually function under regulation, unregulated markets lead to monopolies or monopsonies.
This may be true in US aviation industry (regulation is too weak) but certainly not applicable for supporting a blanket statement like "Deregulation never seems to result in more competition" above.
Deregulation is often a key to more competition. The change in telecom industry in Western countries between approximately 1985 and now is a great example. The evolution of Internet and mobile communications could not have happened with the regulatory framework, institutions and practices of 1985.
There can be too little regulation. There can be too much regulation. There can be wrong kind of regulation.
> There can be too little regulation. There can be too much regulation. There can be wrong kind of regulation.
Fully agreed. All markets are constructed, all markets are regulated — even if only by the existence of a court system for resolving disputes. But it is a difficult task to craft minimal regulation which fosters enduring competition and forestalls the natural tendency of markets towards monopoly, monopsony, and other varieties of market failure.
>Deregulation never seems to result in more competition
Deregulation won't result in more competition when there are big players that can use their money for advertisement, consolidation, buying smaller competitors, cartels, and so on.
What can result in more competition is regulation that favors competition. Breaking up behemoths after a certain size (a la AT & T) is one good way...
This does not look like deregulation, but corruption: having FAA regulate, but delegate to Boeing to "self-control". Like building prisons and asking convicts to guard themselves. I think I saw similar stories about FCC, but with no people dead as a result.
When has the US gov ever moved away from the pseudo market of mega firms anointed to succeed like Boeing in the last few decades?
After the financial crisis the regulations added only further excluded small firms from the banking market because they had ridiculous rules meant for mega banks applied to all banks. So why wouldn’t all the small banks just sell their firms to the big ones?
“Too small to exist” is the reality, not simply “too big to fail” (aka too well connected to fail). Now we only have 5 mega banks further entrenched. Aircraft manufacturer market is even more limited (the incident with Canada’s Bombardier vs US Boeing showed everything you need to know about that ‘private’ market).
I’m not sure what fantasy world people live in when they talk about deregulation of these markets as a common phenomenon, especially airlines, finance, health care, telephony etc (all of the worst industries for consumers in the US, which I should note has nothing to do with the value of public gov run markets which these are not). Absolutely none of those have less administrative oversight than a few decades ago. I guess they listen to politicians instead of any indicators from the market place or history.
If the ‘deregulations’ all further entrench the massive companies, while leaving all of the barriers to entry for the small firms. What outcome did you expect? More competition between the 3-4 mega companies that remain? Is that how we were supposed to benefit from competition?
Some things are better many important things are worse. Consumer goods are doing well, and are high quality where regulations are intact, the good can be trivially inspected on purchase, or reputation provides enough of a backstop to prevent quality decreases. That's the upside of capitalism.
On the downside, many people are underemployed even in a so-called tight labor market, fewer and fewer people own anything like a house or car and are highly indebted. Few people have any savings whatsoever and the administration in conjunction with the monied classes seeks to strip whatever protections remain while scapegoating immigrants. Additionally, the US and the west appear to be better off than they are because we use the power of our military, monetary system, and relationships to make sure items are produced cheaply overseas with negligible labor protections resulting in abusive labor conditions.
Also, the planet is dying due to unlimited resource extraction.
The depressing truth ... how do you deal with it? I’ve been going through depression cycles — sometimes I can ignore the depressing nature that comes from holding an inherently non-positive expectation for the future as basically my best attempt to rationally assess the present and predict the future from it — ignorance is bliss? - but sometimes I embrace that most rational perspective as the “most likely source of truth” and promptly get incredibly (deeply) depressed ... to the point where i can feel myself faking “normal” interpersonal interactions and struggling against the fact that most or all locally true reasons for a hopeful outlook basically pale in comparison to the macroscopic reasons to be non-hopeful ...
It’s deeply sad to know that future generations won’t have as much opportunity as I had to enjoy life ... but to pity them will feel patronizing to them - and so what is left for them to know of me and me to know of them ...?
Dear citizens of the future, know that some of us are sorry for how your life will go — and know that some of us are not for they got theirs before you arrived and that was enough for them ... for some of us this wasn’t enough - we lived your pain in our imaginations while enjoying a physical life of abundance that, in the end, has helped you in no way at all ...
Consumer goods is great, things nobody really truly needs except to satisfy a missing dopamine hit from no longer really being engaged in society, nature, and life, only living an image, an appearance, existing only as a commodity.
Just about everything else is worse though. Wages stay the same while costs rise, markets continue to monopolize and we get fewer choices.
If deregulation were to remove barriers to market entry for small competitors, it could. But big businesses are among the first to demand regulations: a. so they can say they were fully compliant, as a kind of certification and absolution by their sovereign; and b. so they can erect barriers to competitors.
The vast majority of law and regulations in the U.S. are written by industry trade groups, lobbyists. A huge part of the media depends on the massive advertising component of lobbying, both direct and what lawmakers end up spending to reach constituents.
We're way past time to take this seriously, but alas most conservatives had exactly zero problem with Citizens United, actively arguing in favor of the idea that corporations are persons, that money is speech, and corporations have free speech too and therefore can spend essentially unlimited money in the political system via advertising their positions totally disproportionately to the intent behind individual free speech. What we have now is an aristocratic concept, more money more speech. More money, more say. More money, wider broadcast of opinions and propaganda.
Individuals should be having these conversations and debates using critical thinking rather than inundated with corporate talking points delivered into our lives via devices that we pay for.
I think a company can issue unlimited press releases saying whatever the company wants to say. But the amount of money they get to spend on political, policy, and perhaps even social advertising, should be limited.
> I think a company can issue unlimited press releases saying whatever the company wants to say. But the amount of money they get to spend on political, policy, and perhaps even social advertising, should be limited.
The foundational problem is this. Media companies like CNN and The Wall St Journal are corporations and their business is talking about politics. What does it even mean, then, to restrict how much money they can spend on it? How do you even measure the value of being able to choose which anchor with which viewpoints gets which timeslot, or which story goes on the front page? Or being able to just not report on stories (like media consolidation) that they're not interested in people knowing about?
But if buying a TV network to get airtime for your viewpoint is speech then so is buying airtime from that TV network.
The solution to this isn't to restrict corporations from saying things. It's to make sure that everybody else gets to say things too. So that's things like public financing of elections, and decentralized social networks (in the style of email) so that nobody gets to gatekeep information.
Make it cheaper to reach voters without corporate sponsorship and you erode the corrosive utility in corporate sponsorship. Making it more difficult only does the opposite and makes it worse -- nobody wants Zuckerberg to have the power to determine the President with an algorithm.
> How do you even measure the value of being able to choose which anchor with which viewpoints gets which timeslot, or which story goes on the front page? Or being able to just not report on stories (like media consolidation) that they're not interested in people knowing about?
The value of that should be zero, because the rational response of individuals in the situation you describe (which is basically the situation as it is now) should be to simply stop watching and listening because the media have proven themselves untrustworthy.
> In the middle of the Max’s development, two of the most seasoned engineers in the F.A.A.’s Boeing office left.
> In their place, the F.A.A. appointed an engineer who had little experience in flight controls, and a new hire who had gotten his master’s degree three years earlier.
This is how you grow an army of YES-men without any substantial backbone. The type that makes good middle managers and keeps the process moving smoothly. Unfortunately for these engineers, they might ultimately be responsible for the system they signed off on.
This is how the government works. The government is just an institution, and institutions do not care about you. They just don't. They follow their rules and guidelines. If the guide is to put a GS-13 in that slot (employment category), then that is what will happen. There's no magic. Just rules.
Boeing did not build great planes because of the FAA. They built them because their culture and expertise were aligned to do so.
In the fact, the safety culture at Boeing was once so great that they often worked with the FAA to establish standards and guidelines, because the FAA simply did not have the expertise that Boeing had.
"Boeing did not build great planes because of the FAA. They built them because their culture and expertise were aligned to do so."
People say things like this, that when a company is competent, or ethical, or whatever, that it's not thanks to the government.
Yet I hear/read every day where a company says that they cannot do a given sensible, or ethical thing because it is not mandated by law. Every disclosure (e.g. privacy) I get with a financial account says that they cannot give customers more rights than are mandated by law.
The disconnect appeared when companies stopped being driven by shareholders and become driven by Wall Street bean counters. I work for a very large company that lost the CEO because the Wall Street was not happy the guy did not fire enough people to meet their predictions; the next CEO fired the employees and contracted double the number as external suppliers, it was bad for the company and very bad for shareholders, but Wall Street was happy and the guy is still a CEO.
And Wall Street does not care about sensible or ethical things, so the companies are not allowed to. Not anymore.
Government regulation can certainly help, as long as you can somehow ensure adequate expertise and actions are taken. For example, a lot of farm raised shrimp from outside the US is not what it is advertised to be. This impacts legit US producers who want to sell healthy food by putting them out of business. If the USDA and FDA actually were competently regulating, then this would not happen.
Aircraft are much more difficult. When making the 747, Boeing was faced with needing to have it certified by the FAA, but FAA did not have the expertise to do that. So Boeing worked with the FAA to develop the regs and tests and so on. I really cannot imagine how the FAA would ever be able to hold on to a competent aviation grade software engineer for very long. Even if they could hire one, within a year or two their skills would atrophe.
The Faa engineer does not write code. They review archictal level changes and plans. I would be surprised if they even saw the raw code, it’s more likely to be a logic diagram or a higher level schematic and then a test plan to validate it works as expected
> This impacts legit US producers who want to sell healthy food by putting them out of business.
I'm sorry but there is no evidence for this claim. I can't think of a single Big Food company that wants to sell healthy food. Look at the poultry industry. Look at how milk, pork, and beef are produced. There's no reason to believe that "Big Shrimp" would be any more ethical.
Local corporations put profit before health and safety just as much as foreign corporations do.
Yeah, because the people who would have wanted to put healthy food before profit have either overcome that desire or gone out of business. Just as GP's model predicts. The corporations you get are the ones you regulate for.
The tech industry is the same: we'd love to protect users' data better than regulation demands, but it's hard to make the business case because you just do a lot of work to put yourself at a competitive disadvantage while the users don't notice or don't believe the difference. If data protection were effectively regulated then compliance woudn't be a competitive disadvantage, and then we might have a hope in hell of shipping a good product.
Perhaps it is simply culture, that is, in modern corporate culture, there is only one (usually) legitimate excuse to not do something you are told to, and that is that it is illegal.
Money is the new deity and we're selling out values to get it. Corruption and trust loss follow the insistence that the government can't be trusted. But it's a nation of spectators, people who want to be entertained, a decadent culture, not of citizens. It will continue to corrupt itself until we care to hold it accountable. And if we don't, it will turn into something where individuals have even less say than we do now.
It's hard to argue that post-citizens-united USA with businessmen using political offices to score business deals and increase revenue at their owned businesses is "least corrupt" compared to, say, 20-50 years ago when it was harder to buy political office and people like President Carter sold off their businesses to avoid a conflict of interest.
They will be the scapegoats thrown under the bus when the scandals will erupt. Remember Volkswagen's "rogue engineer" who apparently single-highhandedly caused millions of VW vehicles to cheat on emission tests?
Yeah, don't be that guy and whistle-blow on such things.
Kind of BS. Yes the regulations and oversight should be amazing and effective, but Boeing should have redesigned the airframe from the beginning when it became clear that the more efficient engines didn’t work with the frame. Let’s not misplace the blame here. Their business driven goals (don’t require simulator training) were smart until they couldn’t be made to work. Instead they forced it, resulting in death of human lives and possibly Boeing itself.
This is way over the top. Boeing will be fine on account of being too important to fail (and we can debate endlessly whether that’s a good thing or bad thing but that doesn’t change the veracity of the statement). Boeing’s customers wanted the Max to be built on the 737 platform. You’re vastly underestimating the impact of a new airframe on carrier operations if you think it’s as simple as simulator training.
I think above ALL, Boeing’s customers want airplanes that only make controlled landings. If that’s unachievable in practical terms with the current airframe, then it shouldn’t exist in its current form.
> Boeing’s customers wanted the Max to be built on the 737 platform.
You say that as if that's an excuse. What Boeing's customers wanted is irrelevant, but in any case, your claim is incorrect.
Airlines just want a plane that can make them money. Boeing could have build them a plane much better than the MAX, but they chose not to because if they had done so, then the airlines would have the option to switch to Airbus.
The Airbus option would not be on the table if Boeing was just selling them another 737 variant.
Boeing doesn't care much about what's ethical, it does what's cheapest/easiest (remember the Ducommun structural parts scandal of 2010?). That's the job of the regulator: to enforce protections and be another layer of sanity checks to prevent bad processes, bad designs, bad manufacturing, bad maintenance and bad operations from occurring. Capitalism is borderline anarchy, especially when all three branches of government are in the military-industrial complexes' pocket. The FAA dropped the ball because they got too cozy with those they're supposed to regulate because the political system is so damn corrupt. The political and apolitical parts of government MUST be firewalled from corporate influence, just like the separation between church and state... separation between church of money and state.
There are so many underlying threads here: the revolving door between government and industry, the influence of lobbying, lack of competition within critical American industries, deregulation, lack of funding for regulatory agencies. All sums up to regulatory capture. Sickening.
Time and time again regular people are getting screwed by the same patters, the previous paragraph basically summarizes what led to the 2008 financial crisis as well.
In a deregulated world banks wouldn't get bailouts. They would go bust. Governments wouldn't pressure France with import tariffs to protect their aviation industry.
In a heavily regulated you still got dieselgate. It got exposed by the private sector.
There's many factors at play. There exists no world where Boeing benefits from having their planes crashing.
There does exist a world. It's a world of calculated risks, where people figure out how far they can push things before the risks start eating into profits.
It's the same thing that occurs with risk analysis using customer data. They only fund exactly as much security as they need. Does the company benefit from having private data leaked? Not particularly, but if the cost of having data leaked is less than the cost of securing that data, then businesses will not secure their data.
Boeing benefits from cutting costs. Cutting costs can lead to decreased quality. The plane crashing is a risk of decreased quality. Making anything often involves tradeoffs and the point of Boeing's maximum profit is probably not the same as the point of the maximum benefit to society.
Isn't Boeing a part of society? How do you define maximum benefit of the whole society please share the wisdom! A point where there is maximum benefit to one part of society is probably not the point where there js maximum benifit to the other part of society.
One issue the article didn't cover, but I wish it did, was the obvious corruption of the FAA by industry lobbying. The revolving door of industry -> government -> private industry leaves any regulation weak and often ineffectual. We call it "lobbying" but the reality is that it's just corruption and bribery under a nicer name.
One specific example to highlight the issue...
Ali Bahrami works for the FAA, lobbies to delegate oversight to the airlines, then leaves for a lobbying job, then is back at the FAA again at a higher position. It's hard to believe he's always acting in the public's interest with so much industry money and connections.
Probably true but not nafarious/corrupt. It's just human nature that if you watch something and it appears to be safe for long enough, you stop watching so closely.
It's also alkind of a paradox: the safer something appears to be, the more the safety is taken for granted and pushed to unsafe levels. C.f. the mortgage crisis or a million other examples.
From what data are you deriving this theory of inevitable entropy? The safety record of the airline industry overall does not appear to be declining or regressing. On the metric of commercial jet fatalities, 2017 was the safest year ever [0]. Or are you suggesting that the 737 MAX is the canary in the coal mine of an imminent era of airline disasters caused by complacency? Why is that more likely than the lobbying and bureaucratic changes documented in the article?
The commenter I replied to is asserting that a regression in safety is the natural order of things, and this is in response to article alleging systemic dysfunction on the part of Boeing.
I wanted to know what statistical basis he's working from, because the phenomenon he describes is not at all self-evident, not when airline safety has been solid for decades. That we just recently had the lowest annual crash-fatality count, in a decade that is arguably the safest decade in history of passenger travel, undercuts his claim. Unless he thinks the Boeing crashes are the harbinger of this inevitable safety regression.
I don't understand your comment if it's meant to be a rebuttal to me. The fact that after 2017's record safe year, hundreds of airliner passengers have in crashes involving new Boeing airliners, is support for the NYT article's thesis that Boeing is to blame. Not just, "shit happens as things get better".
I don’t have a particular opinion one way or the other on the idea that safety tends to revert. But given the past couple of years, I see why someone might think it is starting to revert.
Yes, people thinking there might be a regression in airline safety is the entire basis of the article. The main factors for that regression, particularly with respect to Boeing's record, is what's being debated.
That doesn't contradict my point. We push things to the edge of our tolerance for safety, and inevitably cross over sometimes. Only when something bad happens do we step back and focus on safety again.
That's not even necessarily bad, unless the bad thing that happens is so catastrophic that it destroys whatever safety record you previously had.
Your comment starts off with "Probably true but not nefarious/corrupt", in an article that alleges the safety regulatory process has been corrupted. Yes, I agree that feeling safe can lead to tragic complacency. I disagree with the notion that we should think of corporate culture problem like we do when someone gets into a fender-bender in boredom-inducing bumper-to-bumper traffic.
That is so true. From ancient times all the way through to today. People lose their sense of hazard.
From the idiot in their car, "Last time I drove I texted, and there was no problem...."
To ancient Babylon: the ruling class was partying the night they were invaded by Persia because they thought there was no way the Persians would ever be able to breach their walls. They had no sense of hazard.
Kind of reminds me of politicians today. They actually have no idea that their stupidity has a real chance of breaking things.
A major problem is that regulatory capture leads to less competition, yet the common solution proposed is "more regulation/government". The US federal government effectively forced Boeings 2nd biggest competition to shut down their business in 2017 (Bombardier's C Series program, now sold to Airbus for pennies on the dollar). It seems to me that if a democratic government is given broad arbitrary regulatory power, it is a given that it will be used to limit competition for special interest's groups benefit. If anyone has any examples of a large federal agency that hasn't been captured, I would be interested to know more.
> A major problem is that regulatory capture leads to less competition, yet the common solution proposed is "more regulation/government"
Neither "regulation" nor "government" are single dimensional quantities that can be compared with a simple "more" or "less".
Having regulatory agencies act in the public interest is probably going to require constant oversight and guidance. It's a hell of a lot harder to have conversations like that when more than half of the political influence in the US is able to dismiss any suggestions with reflexive "more regulation = bad" arguments.
Some regulations decrease competition. Some regulations increase competition. Some regulations provide incentives aligned with the public interest. Some regulations don't. They need to be evaluated on a case by case basis.
Except the bombardier issue had literally nothing to do with regulation and to claim it did is misleading. That was 100% Trump with his tarriff BS. The FAA and safety regulations played 0 part in it. We could have literally an unregulated airline industry and it wouldn't have changed the bombardier situation.
Without speculating about political motivations, the Bombardier CSeries tariffs were imposed by two Federal regulatory agencies for "unfair competition/dumping". (US International Trade Commission, and the US department of Commerce)
Your original post started off with this sentence: "Except the bombardier issue had literally nothing to do with regulation and to claim it did is misleading".
> So even some of the people who have worked on Boeing’s new 737 MAX airplane were baffled to learn that the company had designed an automated safety system that abandoned the principles of component redundancy, ultimately entrusting the automated decision-making to just one sensor — a type of sensor that was known to fail. Boeing’s rival, Airbus, has typically depended on three such sensors.
“A single point of failure is an absolute no-no,” said one former Boeing engineer who worked on the MAX, who requested anonymity to speak frankly about the program in an interview with The Seattle Times. “That is just a huge system engineering oversight. To just have missed it, I can’t imagine how.”
No need to imagine - Boeing was selling the sane more-sensors solution as an extra, and just assumed - before the fact - that no airline would pass on the extra sensor. That would be insane. So, more money for Boeing, AND a lower list price. The airlines shouldn't have bought unsafe airplanes, but were crazy enough to do so. The buyers turned out to be even worse chancers.
> The airlines shouldn't have bought unsafe airplanes, but were crazy enough to do so. The buyers turned out to be even worse chancers.
The plane was made by Boeing, and signed off by the FAA as being safe. Some airline on the other side of the world isn't going to even pretend to know more about the plane than Boeing and the FAA do. It was a completely reasonable assumption to make that the aircraft was airworthy.
The only airlines who would know that the FAA is actually corrupt (captured by Boeing) and could be failing at their regulatory function are the US airlines.
It's unfortunate that you seem to be blaming Lion Air and Ethiopian Airlines for the crashes because apparently they should have known better than to trust that Boeing and FAA would approve a faulty plane. Keep in mind that the FAA approved the plane as is and not "airworthy only if you buy the extra features"
I agree with everything except the idea that U.S. government oversight (not just in aviation) had been so wonderful and so fulsomely funded in the last few decades that it should have been trusted. At all. The 2008 economic crash - the largest robbery in the history of the world - was spawned by America's awful lack of governance and suffered by the whole world (with considerable blame also going to U.K., Iceland and a few more.) Which is just a single example of how obvious it is and was before 737-Max that oversight had long, long since jumped the shark in the U.S.
The background of all of this is increased corporate power in American society relative to individuals. Regulatory capture happens more quickly and fluidly when government is more accountable to corporate money than to voters.
I think it's more a lack of long term thinking. Leaders that do not have a long term stake in the company but who can profit from a rise in the stock price in the short term.
What if executives could only sell their shares five years after they acquired them? What if they experienced losses when the company does?
Boards and shareholders need to get smarter. I'm hesitant to regulate it but I see no problem the SEC rating companies for their incentive structure. It should be updated whenever leadership changes or the company changes compensation.
Companies lad by founders who still have most of their wealth in company stock should garner the highest rating. Companies that don't require CEOs to invest and who allow CEOs to exercise options stock and sell stock whenever they want might get the lowest.
How executives can sell stock should be part of that rating. If executives can only sell an amount of stock gradually, say in 8% increments every month for the next year and can't change that schedule, that is safer for shareholders than allowing them to sell whenever they want.
Definitely something to that. 30 years might seem like too long a period. But if you want your pension to stay healthy, build it to last. That message would be pretty clear.
> What if executives could only sell their shares five years after they acquired them?
This is something like what Salomon Brothers did. Results were mixed.
That said, I like the idea of spreading them out a bit. CEOs and top execs do behave a lot like how agency theory predicts, it's just that if you can come up with the perfect monitoring scheme, you don't need a CEO.
It's seems easy to dogpile on Boeing in this situation - there is likely even truth to narratives of under valuing engineering at Boeing, I should know. But the story of corporate greed and callous corner cutting is too easy and starts to feel like group think. Boeing, as the plane manufacture, has the task of ensuring safety under a vast array of conditions. And in truth, they, along with industry have made flight incredibly safe. Not only are planes complicated, they are complicated systems composed of many more complicated subsystems operated by Airlines across the world under different regulatory agencies, with differing training and maintenance standards. It's complicated and it's always easier to see flaws in hindsight. Second, don't think that Boeing doesn't know that there business hinges on consumer confidence. Every time there is an incident with a plane - manufacturer's fault, operator's fault, or whatever, Boeing gets a black eye. Regulation is critical, but not a blanket solution to industry challenges. It may not be right, or ideal, but there are good reasons the faa delegates. How much more funding should we give them to make us feel safe? Fatality frequency is measured in "per billion" today. We want a bad guy when there is tragedy. I fear that want will further damage a company already fighting for it's life with Airbus. Let's not let them off the hook, but neither are the causes or solutions simple.
It's interesting how this lesson is never learned. We constantly see how oversight is reduced or removed because companies decide that the costs are too high and the rules too stringent. But as soon as the rules are relaxed the companies immediately begin to cut corners and things begin to fail.
It's human nature to find ways to get from point A to point B using the least amount of energy even if we need to break the rules. We should all keep that in mind.
This lesson will continue until we realise that the ultimate goal is the improvement of our society and that to get there we create markets which serve society.
At the moment we appear to be confused and think the goal of society is to have markets, so we regulate for the market and hope society gets an outcome.
Seems like another anecdote of where seniority and experience in engineering is something that can't be quite replicated/replaced by technical qualifications:
> In the middle of the Max’s development, two of the most seasoned engineers in the F.A.A.’s Boeing office left. The engineers, who had a combined 50 years of experience, had joined the office at its creation...In their place, the F.A.A. appointed an engineer who had little experience in flight controls, and a new hire who had gotten his master’s degree three years earlier. People who worked with the two engineers said they seemed ill-equipped to identify any problems in a complex system like MCAS.
I assume engineers new to the industry (and government regulation) would be lacking in "big picture" thinking and in confidence and skill in navigating and investigating bureaucracy – the NYT notes that Boeing's early MCAS report "didn't prompt additional scrutiny from the F.A.A. engineers". But the NYT also reports that the engineers made what seemed to be a straightforward technical misjudgment:
> In several briefings in 2016, an F.A.A. test pilot learned the details of the system from Boeing. But the two F.A.A. engineers didn’t understand that MCAS could move the tail as much as 2.5 degrees, according to two people familiar with their thinking.
Though it's hard to tell from that paragraph and its context whether the misunderstanding came from simple technical error and incompetence – e.g. misreading or not fully reading the specs – or deliberate deception/obfuscation from Boeing, and/or inexperience and naivety in doing regulatory work.
The underlying assumption here seems to be that if only the FAA had examined in detail every aspect of the development of the plane, of course they would have found all the problems. Underlying this assumption is the idea that Boeing is either trying intentionally to create unsafe planes (as though this is good for Boeing) or that the FAA could hire engineers that are way better than Boeing's engineers.
The latter half of the article makes specific claims to how lack of FAA expertise and manpower, and increasing deference and complacency to the industry's self-reporting, led to missed signals. For example:
> When company engineers analyzed the change, they figured that the system had not become any riskier, according to two people familiar with Boeing’s discussions on the matter...So the company never submitted an updated safety assessment of those changes to the agency. In several briefings in 2016, an F.A.A. test pilot learned the details of the system from Boeing. But the two F.A.A. engineers didn’t understand that MCAS could move the tail as much as 2.5 degrees, according to two people familiar with their thinking.
> Under the impression the system was insignificant, officials didn’t require Boeing to tell pilots about MCAS. When the company asked to remove mention of MCAS from the pilot’s manual, the agency agreed.
The "change" mentioned is Boeing overhauling MCAS to have a four-fold increase in magnitude of control over the stabilizer (2.5 degrees vs 0.6 degrees). Your belief is that the FAA, even with a better-staffed review team, and less of a culture of rubber-stamping industry engineer assessments, would have reached the same conclusion? And/or do you think the MCAS change is actually not a problem it's scapegoated to be, and that Boeing was right to tell FAA to remove it from the pilot's manual?
I'm saying I don't buy that the FAA was ever likely to catch the problems with this system that the engineers at Boeing didn't catch. In hindsight it's easy to say the system was a problem and clearly it was, but the FAA was never going to catch anything.
The meeting with the FAA pilot you mention only goes to reinforce this; nobody in the FAA is ever going to have all the right context to put this together. Rather than trying to find some meeting with the FAA where someone could have caught it, there were probably many many meetings inside Boeing where it should have been caught.
No one intentionally makes shitty products. Or at least I’ve never heard of anyone who does.
But I can sympathise with the people that made the decisions to put the plane in the air.
I never intended to make products that customers wouldn’t like. But I’ve shipped things that didn’t meet my own (low?) standards due to financial and social pressures for me and the companies I worked for.
Most employees have done the same. Most business owners have as well.
Except that if you launch in production a bad web site to sell bicycles people don't die because of it. You need to make the difference between bad products and dangerous products - if you put in production a bad plane, car, medicine or gun people can die and there is no sympathy for that.
And you “don’t buy it” because? Blind faith in Boeing and the FAA not being corrupt?
Fact is, the FAA has outsourced large parts of certification to the very manufacturer whose plane it was to certify. Either physically (by using Boeing manpower) or conceptually (by not testing everything because Boeing told them nothing has changed even though that was not true).
Parent poster's claim seems to be that Boeing is incentivised to make safe planes, and is likely to have better aeronautical engineers than the regulator. In that scenario, it wouldn't matter if the regulators were corrupt or Boeing certified itself.
Unfortunately there's a massive hole in that argument, which is that (i) Boeing might be incentivised to do things which aren't in the public interest, such as take risks to make a great deal more money, and (ii) it might suffer a decline in competence due to contingent or management factors.
Perhaps in a perfect world incentives could be so perfectly aligned that no industry would need regulating. But that's not the world we live in.
If there aren't any ramifications for Boeing building unsafe planes, why would they be incentivized to do so? Shareholders don't care about the lives of the passengers, only ROI.
Boeing looks around at all of the slaps on the wrists other companies get, including bail outs. Why shouldn't they hop on that gravy train also?
This was not regarded as a new aircraft development but a variant of an existing design. This meant less scrutiny. Variants deliberately push the boundaries of what it means to be the same design to avoid the scrutiny given to a new design
I think it's just an example of a common news article pattern: put the most memorable and/or important finding or anecdote at the top, and end with the second most memorable.
It's not a cliffhanger. It's an anecdote – a FAA employee asking what seems like a seemingly-too-basic question "days after the Lion Air crash". The Lion Air crash happened last year, and the body of this article is ostensibly the answer to that employee's outburst.
Systems are getting too complex for traditional methods of validation and certification to operate. Safety and correctness of intelligent machines should be validated by even more intelligent machines.
Another big problem is that there is very little competition. In reality there are only two players. Smaller manufacturers get absorbed by big ones. As a result grounding a single model causes economic catastrophe in many airlines - leading to significant ticket price increase!
I wonder if critical systems such as this would become more or less reliable if a law forced the companies to release the source code to the public so that anyone could audit. Something like the rewards Tesla gives to the hackers that compromise their systems should be set up by the government for critical software.
How on earth does 'airline creating startups' live in the same sentence as 'Boeing'? Boeing is an aircraft manufacturer, not an airline.
Airline creating startups do not compete with Boeing, they compete with Lufthansa, Air-France-KLM, Delta and so on.
And even if they did create airplanes, small start-ups do not usually directly compete with giants the size of Boeing on their home territory. Airline manufacture - even with shitty regulation - of a new model passenger plane is not something a 'smaller airplane creating startup' would successfully pull off. It will take a very large amount of money and a huge team to do this.
For anyone to try to compete with Boeing today, from zero, in that aircraft segment, they would need at least, as in bare minimum, $10Bi dollars. Minimum
And that would be to get the plane out of the door. Boeing (and Airbus) has several other non-tangible advantages to their product such as: extensive maintenance and parts logistics (including used parts that can be acquired), well known product, etc
There is one possible competitor in the future: COMAC
If your Boeing or Airbus plane suffers a non-trivial failure that makes it unable to fly, both companies have a team that are able to go and fix it there.
It’ll probably be Airbus that eats a portion of Boeing’s lunch (but not all of it). And whatever Airbus can’t eat will just go back to Boeing. An MVP for a passenger airplane requires considerably more effort and experience than an app, or even a car. You can’t just ship then iterate quickly.
This is what I always fear when I hear deregulation. It is not that regulation is gone, it is just that it is shifted to the regulated and this is one possible outcome, people die.
The elephant in the room is that we made requirements for getting a completely new plain design into the market so expensive and time-consuming, that Boeing cut corners and reused an existing design to get around the process.
Giving you the benefit of the doubt about the approval process for new plane designs, what does that have to do with the more directly relevant cost-cutting that Boeing pushed for: minimizing pilot training on the MAX system?
It is not pilot training. The root problem is that Boeing and Airbus are currently retrofitting larger engines into old airframes at the cost of pitch stability, when what they should be doing if safety was their primary concern is change the airframe to accommodate the larger engines.
Boeing in particular was under pressure from the more fuel efficient Airbus A320neo, and they needed bigger engines (larger fans) to compete on fuel efficiency. Those large engines don't fit under the 737 airframe, but getting a new airframe approved is time-consuming. So Boeing placed the bigger engines more forward from the wing, resulting in flight instability and pitch-up.
Boeing tried to fix that problem with software, but, as became apparent recently, weren't very successful with it.
When you make a product that will take billions of people 8 miles high in the sky, you need to make it as safe as possible, at whatever the cost will be. If you take the risk and the cost in consideration, the cost is low.
I don't have a problem with the requirements. I'm just saying that if passing the requirements is so time-consuming and expensive that companies start cutting corners to get around the approval process, the approval process just became worthless.
I'm pretty sure the requirements are fine, but the process is not streamlined and hence avoided whenever possible.
> I'm just saying that if passing the requirements is so time-consuming and expensive that companies start cutting corners to get around the approval process
You don't get to stay in business in a regulated industry with an attitude like that. What's next? Medical device manufacturers cutting corners because the regulations are too onerous? Regulations create a level playing field: all entrants get to abide by the rules. Or at least, that's how it should be. The FAA turning a blind eye here is as much a part of the problem as Boeing.
