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Free Market Failures


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Free Market Failures
Topic: Miscellaneous 12:03 am EST, Dec 22, 2009

The Obama administration took aim Monday at tarmac horror stories, ordering airlines to let passengers stuck in stranded airplanes to disembark after three hours.

With its new regulations, the Transportation Department sent an unequivocal message on the eve of the busy holiday travel season: Don't hold travelers hostage to delayed flights.

Under the new regulations, airlines operating domestic flights will be able only to keep passengers on board for three hours before they must be allowed to disembark a delayed flight. The regulation provides exceptions only for safety or security or if air traffic control advises the pilot in command that returning to the terminal would disrupt airport operations.

This is another example where the mantra of "Let the market regulate itself" utterly fails. What are you going to do? Not fly on American? If its business travel you might not have that choice at all. Few competitors, enormous barriers of entry (both capital as well as access to new markets/airport gates) = shitty giants.

I'm beginning to see a pattern. The farther a market is from a perfect market the more companies can abuse the consumer. In fact, most abuse seems to happen in industries where the interests of the shareholders are orthogonal to the interests of the consumer: Transportation. Energy. Health Care.

Free Market Failures

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