Sunday, December 5, 2010

We Haven't Got a Chance

A PhD at a US think tank has proposed privatizing the TSA as the answer to air travel security. In an opinion piece, Robert P. Murphy gives all the "free market" reasons that private security would work. After all, government always fails.

I may be a bit dumb, and perhaps missing something, but his reasoning of how turning over air travel security would actually improve things strikes me as a poster child why these free market worshipers will complete the destruction of the US.

First, I am no fan of the TSA or the draconian security techniques in place in the US. Our regular air travels in the rest of the world have shown us that security need not be as oppressive as it is in the US. In my view, and that of the Mrs., a retired major airline executive who knows a bit about the business, TSA has embarked on a “Zero Defects”, “Zero Risk” course that it simply ludicrous. So I am not in any way writing in defense of TSA’s recent issues.

Murphy sees airline security as a simple exercise in free market operation. Airlines could employ any screening technique they desire, and should an airline’s aircraft be used by a terrorist, the airline would be legally liable for the damages. Of course, the airline could “take out large insurance policies, just as surgeons must carry malpractice insurance.” What Murphy doesn’t address is that malpractice claims, covered by insurance, have not been shown to reduce malpractice. In fact, he and his right wing buddies say that malpractice liability only results in higher medical costs. Further, is the screening for the purpose of limiting monetary damages or loss of human and limb? Screening is safety insurance before the fact, not monetary loss coverage after the fact.

My second immediate thought was his statement that “No one can say what security techniques would develop in a truly free market. That's actually the whole point: We need entrepreneurs to experiment and discover new approaches.” Yup, just like sub-prime mortgages, CDOs, Blackwater and the lot. I would also mention that those 19 guys with box cutters were screened by private contractors, not TSA employees. They boarded fights at small airports, where they determined that the screening in place was sufficiently lax to let them pass into the system armed with their “weapons”. Once inside security in the boondocks, they had a free pass throughout the system.

Now, from a purely business standpoint, leaving screening up to each and every airline means that at an airport such as JFK, where over 70 airlines have operations, many of which are only one arrival and departure per day, would be an interesting affair under the Murphy Plan. What would be the cost of 70+ different screening operations? How would “damage liability” be sorted out if airlines shared a screening operation? If the screening operator was a contractor, how would an airline be liable for contractor errors. Could Carrier B require re-screening of passengers connecting from a flight on Carrier A. After all, Murphy says the airline who’s aircraft is used by a terrorist becomes liable. What about checked bags that are transferred between airlines?

Since “free market” businesses generally seek to minimize costs, how could screening “quality” be assured? Keep in mind that Murphy sees the cost of screening being included in ticket prices, so the flying public will pay for the cost of an airline’s screening and liability insurance. In markets where there is only one or two carriers, will the consumer have a choice between Murphy’s two models of intrusiveness versus price. Will they even have service?

Murphy and his fellow travelers live in an “all or nothing at all” universe. In their view, there is little or no need for government, as the private, for-profit sector can do everything better. Alan Greenspan finally had to admit that the free markets were indeed capable of decisions that would be in their worst interest.

Well, the following can be gleaned from this article and Murphy’s bio. 1) He knows absolutely nothing about the transportation industry. 2) He has never run nor been employed in a “free market” business in his life 3) As an academician, he has never achieved permanent (tenured) employment 4) He has never held a position that has had to produce a profit. 5) has stated in his writings that "my ethical beliefs are informed by my Christian faith, and I am a firm believer in natural law."

When are people like Murphy going to figure it out? I'm not sure they ever will.


  1. Aviator,
    The description that you use in your 2nd last paragraph sure do sound like qualifications to be a President .

  2. Al,

    Great post. It's guys like these that give the free market a bad name. They have managed to turn the promotion of corporatism and special interest into "free market" ideology for too many people. The idea that airport security could ever be a "market" in the traditional economic sense of the word is completely ridiculous.

    "Politics" today seems to be a choice between corporatism on one hand and a pervasive nanny-state on the other. Something's got to give.

  3. Al-


    Murphy writes:

    "Proponents of the new procedures argue that they are necessary to keep travelers safe from terrorist attacks. But why should anyone trust the TSA's assessment of the situation? After all, this federal bureaucracy was created in late 2001, after the 9/11 attacks. Even though the TSA had been in operation for a full eight years, it took a Dutch passenger to foil the "underwear bomber" over Detroit.

    If the TSA hasn't gotten it right after eight years, why should Americans believe that this further sacrifice of liberty will be the last one?"

    Notice that link? Dutch guy . . . US bureaucratic failure . . . what could be more simple than that? Or is his argument since the TSA was established in 2001 under Bush it must be crap? What was Murphy saying in 2001 in regards to Bush . . . so maybe Murphy was full of crap then and is now too, which would prove once again Murphy's law . . .

  4. Al, Murphy would probably say that he HAS "figured it out". But since his point really isn't to argue for the practical virtue of market driven security but to argue for the abolition of tax-funded public services - in this case, air travel security - you'd have to accept that the point he was trying to figure out was "what arrangement would better make the case for privizing public services?

    Unfortunately for him, we've already visited that point.

    We let the mining industry set mining safety standards until enough miners died preserving the profit margins of the mining industry. Then we established a "Mining Safety and Health Adminstration".

    We let the railroad industry set railway construction and maintainence standard until enough people died in railway accidents, and then we established federal safety standards for railways and funded inspectors to check on them.

    The let the meatpacking industry set food health and safety standards until enough people sickened and died. Then we established a Food and Drug Administration.

    Through the course of human history we've pretty much established that human beings will inevitably choose the lowest standard of performance for the greatest return possible; the notion that somehow a "private TSA" will produce a more agile, more innovative security regime than the current system is laughable - particularly since the criteron for "profitable" is literally nothing.

    What he's suggesting is that his Wackenhut Air Security organization will organize a security setup that will be so successful that it will deter any and all potential aerial criminality. So the result will be...nothing. No acts of aerial violence will occur. The Wackenhut guys may run simulations or tests on their security system. But they're "inside" - how can they be relied on to think outside the box?

    Meanwhile, Wells Fargo is over at Continental and Delta running their setup. They aren't sharing information on attempts they stop, or how, of even if they have any - they're in it for profit, right? How will they benefit if they share their means and methods and help Wackenhut stop that United airliner from going down?

    Plus, let's face it, how can they tell if they're getting the best profit margin for their security...unless they reduce their costs by reducing that security? And keep reducing costs to the lowest possible expense?

    Back in the 16th Century Machiavelli warned his fictional prince about mercenaries. If they're more worried about their lives than their profits, he said, they would fight so poorly for him that his kingdom would be overwhelmed. But if they cared more for their profits, they'd first bankrupt him and then depose him. The answer was to base the defense of the principality on a military force that was loyal to the state, rather than to their own bottom line.

    Murphy is worse than a fool; he is a man so blindly partisan to his market religion that he has forgotten why some things were taken from the market.

  5. The air transportation industry is a classic example of the public clamoring for mutually exclusive approaches to serve their self interest. People want the airlines deregulated to spur competition and thereby lower fares. But when the airlines, in a scrambling attempt to provide fares cheap enough to fill seats to eek out a profit, reduce services and charge for services that were once "free", the public wants the government to intervene.

    Yes, FDChief, Murphy is worse than a fool, but his ill-informed idea probably strikes a chord in the minds of a large part of a generally ill-informed population that want nothing better than to lash out at a world they do not, and probably cannot understand.

  6. Seydlitz -

    You mention Murphy's law at the end of your post. I think Sturgeon's Law is more appropriate in this case: "Ninety percent of everything is crap."

  7. Strange you should mention that Law, pluto!

    Your TSA BloodHounds are on the hunt for . . . satire.

    Here’s what Blogger Bob decided to debunk:
    This story supposedly took place in Denver. It never happened. And the quote from the “Head of Scanning???” Well, no such position exists and nobody by that name works for TSA. Which means, it was never said by a TSA employee. Some are upset – an understandable reaction, if it were true. But it’s not. The article attributes the quote as being given to CNN. Try Googling it and see what you come up with. (Hint – it won’t be a CNN article.)

    Like the New York (“All the news that’s fit to print”) Times, The Daily Squib has a motto. It’s harder to find. There’s a down-arrow button somewhere on your keyboard, Blogger Bob, give it a whirl sometime — oh, the things you will learn!

    The Daily Squib is a curious satirical publication and should therefore be taken fu**ing seriously ;)

    In case the debunking of one satirical publication’s story wasn’t enough tax dollars wasted for you, federal-pay-freeze Blogger Bob continues:

    This story supposedly took place in San Francisco. Again, this story is false. There are no reports to back this up. If the man was cuffed as the article states, there would be a police record as our officers do not use handcuffs.


  8. Let's hear it for free enterprise and the "free market" ability to innovate. A good example is the Mortgage Electronic Registration Systems (MERS). MERS boasts of saving the "industry up to $200 million annually by creating an electronic clearinghouse for mortgage ownership rights and information."

    Except, MERS may not be "registering" transfers of mortgages, at least in a manner that is legally sufficient.

    But, however legally insufficient MERS may be, and no matter how catastrophic is may be to future property title validity, they sure found a less costly way to do things.

    I wonder if Dr Murphy knows of an insurance policy for these firms to cover the damages caused???

  9. Pluto-

    OK, but when dealing with neo-cons and neo-liberals . . . isn't 90% a bit low?

  10. It has been postulated that in certain areas (like 80% of human activity) that Sturgeon was low by about 10%.

    Unfortunately there is, as yet, no mathematical proof for this theorem. Though I do note that fertilizer companies seem to do very well during times like these, which could be considered empirical proof of a sort.