Eric Cantor on the airlines pocketing the FAA tax the government can’t collect right now with the FAA shutdown. In case you haven’t kept up, the FAA has not been renewed which means that thousands are out of work, including airport construction projects across the country, and over the month of August the US stands to lose one billion in revenues. Basically, just before taking off for vacation, the House stuck the Senate with a bill which would weaken unions in the industry forcing the Senate to sign it or wait until September. More “hostage taking” to come.
Apparently prices are not set by competition, and the extra money they will be making will thus not be transferred to consumers (nor invested for additional jobs), but will simply boost the airlines’ “bottom line” according to Cantor. This is a test case for the conservative economist’s mantras about increased taxes increasing prices, and by all indications the premise is being proved false. As local gas station owners once described their gouging of Humboldt County consumers when it did not appear that costs were impacting local prices, it’s all about “what the market will bear.” As in, what consumers will pay.
But no, there’s no collusion. That would be illegal, right?
Addendum: Up next in national politics – Wisconsin. Lots of money being poured in.
Meanwhile, here’s a nice cartoon on bipartisanship.
And CNN continues to cover the story about how badly “those people in Washington” are acting, as if there is equivalence between the parties in all this.
6 comments
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August 4, 2011 at 9:39 am
Sally
I love Mark Fiore!
August 4, 2011 at 10:01 am
Plain Jane
More evidence that the right doesn’t care as much about the economy as they do about changing our fundamental structure.
August 4, 2011 at 12:07 pm
Not A Native
Some(not many) airlines did not raise their fares.
But all in all, its not much different from the local HumCo business that charge monopoly prices because they have a captive market. Gasoline prices are the most commonly cited local example, but there are many others.
August 4, 2011 at 12:53 pm
Eric Kirk
You mean they lowered them? The point is that the fares, in most cases, didn’t change.
August 4, 2011 at 12:59 pm
Matt
“And CNN continues to cover the story about how badly ‘those people in Washington’ are acting, as if there is equivalence between the parties in all this.”
I agree with you on this point, but I would also argue that as long as the Democrats are impotent and ineffective, the “conservatives” (and I use that term loosely since there’s nothing really conservative about these clowns at all) will continue to wreck havoc, and so in a way, it really is a problem with both parties.
August 4, 2011 at 2:49 pm
Not A Native
No Eric, the FAA tax has been added on to the fare. Most airlines actually raised their fares by an amount equal to the (now defunct) tax, so their ticket prices were unchanged. Those airlines that didn’t, saw their ticket prices go down.