Oh, the ironies …
Pittsburgh International Airport (PIT) is one of several airports being paid to allow airlines to park their unused jets as the coronavirus pandemic plays out.
About 100 jets are stacking up on an unused runway. Most of them belong to American Airlines — subsumed by US Airways, which maintained the American name. US Airways once used PIT as a major hub. In fact, you’ll recall the “new” airport that bowed in the early 1990s was built specifically to the airline’s hub-design specs.
Years later, of course, US Airways abandoned PIT as a hub. And now, it’s using the facility as a something of “hub of the idled.”
Which bring us to the federal “rescue” package. Never mind American’s still relatively high valuation – and, yes, yes, we understand such a valuation is in jeopardy the longer flights are truncated — American will be among the carriers sharing about $50 billion (that’s billion with a “b”) in public bailout dollars.
And the government likely will be taking a financial stake, in one form or another, in the “rescued.”
But, still, whatever happened to the good old-fashioned way of lending. Surely, American has enough collateral in planes alone to secure traditional bank financing, yes?
As a Wall Street Journal editorial on the overall bailout concluded on Thursday:
“Helping the airlines weather a 100-year pandemic might be, arguably, within the government’s job description. Owning them isn’t. There used to be a company called US Airways, and there’s no sense dusting off that livery for Uncle Sam’s airline.”
Two economists – Amit Seru of Stanford and Luigi Zingales of the University of Chicago – raise a most valid point of economic order that should make those back-of-the-neck hairs stand up:
“The stimulus is the largest step toward a centrally planned economy that America has ever taken,” they write in a Wall Street Journal commentary.
And they recount this very basic economic premise for which too many Americans surely are ignorant:
All those lockdowns ordered to contain the coronavirus have constrained supply; “stimulating demand would lead only to a rise in prices.”
Of course, in this climate of crisis and “rescue,” state and local officials will decry such increases as “gouging” and prosecute the “gougers.” Heck, maybe they’ll even impose price caps to “control” the “outrage.”
This is what central planning hath wrought.
As the pair concludes:
“The urgency of the moment facilitated a giveaway to vested interests. Now that the Cares Act is law, policy makers need to find ways to impose restrictions on how the money is deployed.
“It isn’t only a question of fiscal prudence; the nature of American capitalism is at stake.”
If not its very future.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).