“To be competitive globally, we have to reduce the corporate tax rate,” Ryan told The Hill in an interview from his Youngstown, Ohio, district office. “We’re just not competitive globally because of that.”
Booman, writing at the Washington Monthly, has the goods:
A major factor that has not received sufficient attention is the role of public policy. Throughout most of the country’s history, American government at all levels has pursued policies designed to preserve local control of businesses and to check the tendency of a few dominant cities to monopolize power over the rest of the country. These efforts moved to the federal level beginning in the late nineteenth century and reached a climax of enforcement in the 1960s and ’70s. Yet starting shortly thereafter, each of these policy levers were flipped, one after the other, in the opposite direction, usually in the guise of “deregulation.” Understanding this history, largely forgotten in our own time, is essential to turning the problem of inequality around.
And he proceeds to give us examples, let’s look at the first one. I think it is the clearest:
Beginning in the late 1970s, however, nearly all the policy levers that had been used to push for greater regional income equality suddenly reversed direction. The first major changes came during Jimmy Carter’s administration. Fearful of inflation, and under the spell of policy entrepreneurs such as Alfred Kahn, Carter signed the Airline Deregulation Act in 1978. This abolished the Civil Aeronautics Board, which had worked to offer rough regional parity in airfares and levels of service since 1938.
With that department gone, transcontinental service between major coastal cities became cheaper, at least initially, but service to smaller and even midsize cities in flyover America became far more expensive and infrequent. Today, average per-mile airfares for flights in and out of Memphis or Cincinnati are nearly double those for San Francisco, Los Angeles, and New York. At the same time, the number of flights to most midsize cities continues to decline; in scores of cities service has vanished altogether.
Since the quality and price of a city’s airline service is now an essential precondition for its success in retaining or attracting corporate headquarters, or, more generally, for just holding its own in the global economy, airline deregulation has become a major source of decreasing regional equality. As the airline industry consolidates under the control of just four main carriers, rate discrimination and declining service have become even more severe in all but a few favored cities that still enjoy real competition among carriers. The wholesale abandonment of publicly managed competition in the airline sector now means that corporate boards and financiers decide unilaterally, based on their own narrow business interests, what regions will have the airline service they need to compete in the global economy. (See “Terminal Sickness,” Washington Monthly, March/April 2012.)
I know that I’ve certainly experienced first hand how air travel has only gotten exponentially suckier (is too a word!) since being deregulated. The big carriers do not service many of the smaller, regional airports because the invisible hand of the market says no one is flying to/from there, but it seems like a chicken-egg thing.
I know that there are a lot of people in the Midwest who are driving (or taking buses and trains) for literally hours to get to an airport that the major carriers do service. Even taking a regional airline from a second tier airport to a hub is fraught with complexity: often there is only one flight per day and those 12-to-16 seat planes have waiting lists.
(I was on one once, and before take-off, they literally asked the people in the back of the plane to move up and stand in the aisle. They even force-swapped seats on a large person and a small person to have him up front.)
Anyway, Booman concludes thusly:
It was actually aggressive public policy that created the broad regional equality the country enjoyed before deregulation and lax antitrust enforcement took it all away. Tim Ryan doesn’t know who screwed him or how he was screwed, and his solution now is to just tax the bandits less– as if the rest of us won’t have to make up the difference.
And this is why we need to keep an eye on Ryan. It isn’t clear that he is another Corporate Dim (though he might be), but he is a useful tool to corporations. He has the populist anger with a typical Republican solution.