
Bailing out the Airlines is a Moral Hazard - mutablematter
https://mailchi.mp/723a0c4072df/airlines-bankruptcy-bailouts-and-moral-hazard
======
PaulHoule
It is bailing out Boeing that scares me.

Back in the 1980s they closed down most of the US steel industry because it
was based the obsolete Open Hearth Furnances that Siemens had invented more
than 100 years prior.

The US steel industry was getting it's clock cleaned by other countries that
were using the post-WWII basic oxygen process that produced a better and
cheaper product.

Their answer was to lobby the government to keep out foreign steel, which
damaged other US industries such as the car industries since they were forced
to make more expensive and inferior products than their competitors.

Instead of keeping up with aerospace technology, Boeing decided to string
along the 737 with minimum investment. They didn't have a cent to spend on
developing a better plane, but they sure have $18 billion and counting to pay
because they screwed up.

If we bail out Boeing they will try to make noisy and cramped 737s with foul
air until 2080, they will hold back our aerospace industry, and will be a
fifth column that helps Russia, China, Brazil and every other country get a
jump on the USAF.

That's a hazard, not just a moral hazard!

------
treyfitty
Bailing out the banks were a moral hazard too. The moral hazard didn’t stick
to just banking- it’s evident in hindsight that bailouts in general are a
moral hazard. Too big to fail wasn’t just a banking phenomenon. It’s a
corporation phenomenon.

