Robert Whitcomb: Drawbacks of deregulation and DIY

  For years, deregulation and the Internet have been pulling us into a more decentralized and freelance economy, in which there’s wider consumer choice, albeit with stagnant pay and a decline in person-to-person service that forces us to do more tasks ourselves that were previously done by those dinosaurs called “employees’’.

Consider Uber. As I discovered when one of my daughters pulled out her iPhone a couple of years ago on a busy Manhattan street to summon an Uber driver, it’s sometimes faster to find one of these mobile freelancers than it is to find a regulated Yellow Cab in a big city.

But the cabs, being regulated, function as a public utility. They have to meet certain basic minimums of availability, cleanliness and safety that can’t be imposed on the likes of Uber, whose drivers are, of course, not obligated to provide services in the same way as cabbies. I don’t think that we want unregulated drivers to totally replace generally reliable and regulated cabbies.

Long before Uber, of course, there was the partial deregulation of the airlines. While this led initially to lower prices for many travelers, it has also made travel more chaotic and unpredictable. And deregulation, the “Hub-and-Spoke’’ system and relentless airline mergers mean that mid-size cities get shorted on flights.

While better electronics systems make planes less likely to crash these days than three decades ago, air travel itself is increasingly miserable.

In the old, tightly regulated days, figuring out airline schedules and fares was comparatively easy. Now it’s an ordeal, and conditions within airplanes are increasingly crowded and unhealthy. And as the airlines, like other businesses, seek to outsource service to computers so that they can lay off more people, addressing problems by communicating with customer-service humans gets tougher.

Then there’s the new do-it-yourself, deregulated and decentralized energy world. Consider that many affluent folks are saving money and reducing their carbon footprints by having solar panels installed on their roofs. Good in itself! But this takes business away from the utility companies, which could jeopardize the viability of the huge electric grids that utilities maintain. We’ll continue to need that grid to support modern society, with its ever-increasing supply of electronic devices.

Might not it be better if we put more focus on producing green electricity with huge solar-panel arrays and wind-turbine farms maintained by utilities that serve everyone – rich and poor?

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The Obama administration has worked very hard to craft a deal with Iran to try to get it to at least postpone continued work on nuclear weapons.

But the administration’s effort will probably turn out to have been in vain. For one thing, the corrupt theocratic dictatorship that runs Iran will cheat and cheat as it evades inspections. It may receive technical help in this cheating from the likes of fellow police states Russia and China, two of the signatories to the nuclear deal, which will happily sell them militarily useful stuff.

Iran will almost certainly use the billions of dollars freed up by the ending of economic sanctions to increase its troublemaking. Iran’s regime seeks to dominate the Mideast – partly to protect and promote its fellow Shiites and partly because domination is fun and profitable for its leaders. And Tehran hasn’t really toned down its “Death to America and Israel’’ rhetoric.

Now we have made the mullahs more macho. No wonder Iran’s neighborhood is scared.

Some complain that America, as the first nuclear power, is hypocritical in trying to keep nuclear weapons out of the hands of other nations. That seeks to make an equivalence between a democratic nation like America and a dictatorship like Iran. And remember why we started our nuclear-weapons program in the first place – to defend ourselves from Germany’s mass-murdering Nazi regime, which was working hard to create an atomic bomb.

Some say that expanding trade with Iran will somehow make it kindlier. They said that about Germany before World War I and China now. Nations have other reasons besides economics to be nasty – for instance, paranoia, power for the sake of power and religion.

Robert Whitcomb (rwhitcomb51@gmail.com) oversees New England Diary. He's also a Fellow at the Pell Center, in Newport, and a partner at Cambridge Management Group (cmg625.com), a healthcare-sector consultancy. He used to be the editorial-page editor of The Providence Journal, the finance editor of the International Herald Tribune and an editor at The Wall Street Journal, among other jobs.

Robert Whitcomb: High anxiety; keeping up with the swells

  We’re all hearing more and more complaints about bad airline service. But then, flying has been miserable for years, except for some of the relatively few folks who can afford business or first class.

Back in the late ‘70s, as Americans started to fly much more, there was a push to deregulate airlines. The idea was that this would encourage more competition that would, in turn, lower prices. And indeed prices fell for a while.

But deregulation also reduced service quality – except for safety. In fact, as unpleasant as these airborne cattle cars have become, flying has until recently been safer than ever, because of technology and heightened security. Now, however, tighter seating might cause a pulmonary-embolism epidemic.

Deregulation also slashed service to smaller cities and, as airlines created giant new hub systems, it got a lot harder to get direct flights to and from mid-size cities. That’s especially where, as at such airports as  Rhode Island's T.F. Green, politicians delayed lengthening runways to please some loud locals.

Meanwhile, the World Wide Web let airlines dump a lot more work on their passengers, who now must deal with an extreme complexity of flight options on their computers. Schedules and pricing, like taxes and much else in America, have become far too complicated. (Read “The Paradox of Choice,’’ by Barry Schwartz.)

When it comes to flying, most Americans are willing sheep as long as they think they can find a cheap flight. But whatever the original aim of deregulation to boost competition, we’re down to four airlines – American, Delta, Southwest and United – controlling 85 percent of domestic flights and in a better position than ever to gouge us, through higher ticket prices and fat new baggage and other fees. The old regulated, orderly and predictable airline system is looking better and better.

The happy valley of “choice’’ via late ’70s deregulation has paradoxically led to fewer choices and much less enjoyable travel. And a lot of us miss such quaint carriers as Mohawk Airlines that could take us to, say, about a dozen cities in upstate New York

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My colleague Froma Harrop has written eloquently about the case in which Manhattanite Thomas Gilbert Jr. allegedly shot to death his father, Thomas Gilbert Sr., after the latter had reportedly tried to cut his subsidy of his troubled son. See: http://www.providencejournal.com/opinion/commentary/20150118-froma-harrop-the-rich-indeed-are-different--and-more-messed-up.ece

What struck me was the pressure that the older Mr. Gilbert apparently felt to keep up with the Joneses of New York’s mercantile aristocracy. Not only was the estate that he reportedly left ($1.6 million) astonishingly paltry for someone in his crowd, with his Beekman Place and East Hampton residences, but he was working seven-day weeks at age 70 to pump up a tiny ($7 million) hedge fund.

And why is it that so many of these people see Wall Street as the only socially acceptable way to make money? Indeed, Thomas Jr. wanted to start a hedge fund himself (even as the giant fees asked by them are increasingly turning off investors). It seems somehow connected with his sense of entitlement.

Then there’s New York House Speaker Sheldon Silver, who’s accused of raking in millions of dollars in illegal referral income for a law firm from rich oncologist Robert Taub in return for Speaker Silver sending state money to Dr. Taub’s cancer center.

The New York Times reported that the exasperated Dr. Taub got Speaker Silver to get his son Jonathan a job because he (according to acquaintances) allegedly was more interested in “playing bass guitar and blogging his right-leaning political views than in finding a permanent job.’’

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The sort of outcome of last Sunday’s Greek elections, in which a leftist, anti-austerity party won, probably couldn’t happen in the U.S. because most poor people don’t bother voting here.

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Winter in the Northeast’s cities may have its attractions (fresher than in the warm weather) but the nearby ocean means that the wind, funneling between the high-rises, often makes us feel colder than we do in Vermont and New Hampshire. There, the dry cold, bright skies and mountains can be exhilarating.

The heart, to me, of this winter joy are Appalachian Mountain Club lodges, with their big fireplaces and smart and friendly people. They give winter a good name that’s hard to find on the dreary streets of Boston, Providence and New York.

Robert Whitcomb  (rwhitcomb51@gmail.com) oversees New England Diary.