Monthly Archives: April 2008

Airlines And Outsourcing

Airlines, a business regulated to death, when they’re not self-immolating due to mismanagement, face a lot of pressures and not a lot of answers. Like other businesses which are procured as a commodity (i.e. most travelers fly whatever airline is cheapest on Orbitz, Travelocity, etc), there is constant pricing pressure and cutthroat competition, and always a search for lower, lower costs.

The airlines have taken advantage of some liberal FAA practices, where the FAA certifies offshore repair/maintenance/service firms to perform work on airplanes. And they’ve been saving lots of money:

Southwest Airlines planned to begin flying planes to this small Central American nation this year — but not with passengers aboard. The carrier wanted to outsource some of its maintenance to a Salvadoran repair shop called Aeroman.

Aeroman already services jetliners operated by U.S. carriers JetBlue and America West. The airlines fly empty planes hundreds of miles from the United States to have them refurbished, repaired and inspected. It’s like driving across town for a cheaper mechanic — except that airlines can save millions of dollars over the life of their rides.

[Aeroman] Chief Executive Ernesto Ruiz said two U.S. carriers had contacted him about grabbing Southwest’s spot in El Salvador, where they can cut their maintenance bills by 30% or more.

In the process, they’re actually getting a hell of a product. Much of the article goes on to applaud these service firms, who are providing quite excellent outcomes at a very decent price. The article also points out that the recent lapses in Southwest & American Airlines’ maintenance are not in any way related to these outsourced operations. In fact, the purchasers of the service are quite happy:

He described the Salvadoran operation as “an absolutely first-class facility.” Customers agree. Mitch Sine, a maintenance representative for JetBlue, was in El Salvador recently checking one of his company’s planes. He said Aeroman beats U.S.-based maintenance contractors, not just on price but on performance and on-time delivery.

“I can’t buy this kind of quality in the United States,” he said. “These people really have pride in their work.”

But, predictably, some people aren’t happy. And I think it’s no surprise that one of those unhappy people just happens to have the last name Hoffa:

“We’ve been trying for years to get the FAA to pay attention to how dangerous it is to outsource maintenance overseas,” Teamsters General President Jim Hoffa said. Unionized mechanics at United Airlines voted this month to leave the Aircraft Mechanics Fraternal Organization and join the Teamsters, largely on promises by Hoffa to try to stem outsourcing.

I’m sure Hoffa is an objective, disinterested party, right? He’s not beholden in any way to the behavior that Milton Friedman described a long time ago?

The justification offered is always the same: to protect the consumer. However, the reason is demonstrated by observing who lobbies at the state legislature for the imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than of the customers. True enough, plumbers presumably know better than anyone else what their customers need to be protected against. However, it is hard to regard altruistic concern for their customers as the primary motive behind their determined efforts to get legal power to decide who may be a plumber.

There is no reason to believe that we are less safe than we were before. In fact, we appear to be getting a safer total product at a lower cost. Anyone who argues against things being safer and better usually has their own interest, not that of the consumer, at heart.

It’s the dollar, stupid

So, GWB and San Fran Nancy have been sniping at each other over the nation’s economic malaise. Who’s to blame? He says inaction by a Democratic congress is to blame, while she says his administration’s incompetence is to blame. Well, as entertaining as this tussle is, they’re both wrong.

Fabius Maximus has a good post about rising commodity prices, in which he reminds me about this truism from Milton Friedman:

Inflation is always and everywhere a monetary phenomenon.

Combine this thought with the following observation from Larry Kudlow:

Whether it’s energy, wheat, grain, corn, or whatever, since these raw materials are priced in dollars on global markets, a strong greenback will reduce commodity prices. And that, in turn, will lower both consumer and producer inflation. This would help corporate profits and would boost the purchasing power of wages.

In other words, a strong dollar would relieve gas prices and boost the economy. But so far as I know, the president never mentioned the dollar. And I don’t think any of the media people asked him about it.

The media has this recession exactly backwards. Every day, I hear the talking heads say that oil prices and food prices are driving inflation. They’re being driven by inflation, meaning they’re being driven by the likes of Bush, Pelosi, and every other big-government politician on Capitol Hill (a.k.a., the porkers).

The federal government has the absolute power to stop this recession. Do they have the discipline or will to do so?

Tuesday Open Thread: Rating The Presidents

The Debatable Land has an interesting post asking readers and other bloggers to name the most overrated and under-rated Presidents in history:

1. You may nominate up to three Presidents in each category.

2. Three points will be awarded to your first selection, two to your second and one to your third. If you do not state an order of preference, each nominee will receive two points.

3. Nominations should be emailed to me by clicking here .Or you can leave them in the comments section below.

4. If you indicated whether you are an American citizen or not, that would be helpful. Equally, if you felt like including your own political leaning (conservative, liberal, libertarian, socialist etc) then that could also be useful. It’s far from required however. You may also, of course, give your reasons and I’ll endeavour to publish a representative sample of those too. All personal information will, obviously, also be kept confidential… (So, yeah, US government employees can vote too!)

5. The closing date for submissions is on or around Sunday May 11th.

6. Remember: you are not choosing the best or worst Presidents, but those whom you think history and pundits have over-rated and under-rated respectively.

7. If you have a blog yourself, let me know the URL and I’ll include a link to your site when the results are published.

8. That is all. Again, email me! (

Here are my picks:


  1. Franklin D. Roosevelt
  2. Woodrow Wilson
  3. John F. Kennedy


  1. Calvin Coolidge
  2. James Monroe
  3. Grover Cleveland

If you participate, be sure to leave your picks in the comment section as well.

Life, Liberty, And The Pursuit Of Bacon Dogs

Drew Carey is back with his latest installment, this time he takes on the food police in Los Angeles:

Amid the hustle and bustle of downtown Los Angeles, there exists another world, an underground world of illicit trade in—not drugs or sex—but bacon-wrapped hot dogs. Street vendors may sell you an illegal bacon dog, but hardly anyone will talk about it, for fear of being hassled, shut down or worse. Our camera caught it on tape. One minute bacon dogs are sold in plain view, the next minute cops have confiscated carts, and ordered the dogs dumped into the trash.

Elizabeth Palacios is one of the few vendors willing to speak publicly. “Doing bacon is illegal,” she explains. Problem is customers love bacon, and Palacios says she loses business if she doesn’t give them the bacon they demand. “Bacon is a potentially hazardous food,” says Terrence Powell of the LA County Health Department. Continue selling bacon dogs without county-approved equipment and you risk fines and jail time.

Palacios knows all about that. She spent 45 days in the slammer for selling bacon dogs, and with the lost time from work, fines, and attorney’s fees, she fears she might lose the house that bacon dogs helped buy. She must provide for her family, but remains trapped between government regulations and consumer demand. Customers don’t care about safety codes, says Palacios. “They just want the bacon.”

Where are the modern-day Sam Adams’ ? It’s time for a Bacon Party !

Wesley Snipes Gets 3 Years For Not Filing Taxes, But Don’t Tell Harry Reid

Actor Wesley Snipes, previously convicted on three misdemeanor charges of failing to file income taxes, has been sentenced to three years by a Federal Judge:

OCALA, Fla. — A federal judge on Thursday sentenced the actor Wesley Snipes to three years in prison for willfully failing to file tax returns.

Mr. Snipes, who was convicted in February, received one year for each count, to be served consecutively, and an additional year of probation. The sentence was handed down by Judge William Terrell Hodges of Federal District Court.

Mr. Snipes, who apologized for his actions before the sentence was announced, showed no immediate reaction to the verdict.

Judge Hodges allowed Mr. Snipes and a co-defendant, Douglas Rosile, to remain free on bond until they were summoned by either the United States Marshals Service or the Federal Bureau of Prisons.

The sentencing came at the end of a daylong hearing in which lawyers for Mr. Snipes argued for leniency while federal prosecutors sought the maximum penalty possible.

The case was the most prominent tax prosecution since the billionaire hotelier Leona Helmsley was convicted of tax fraud in 1989. Mr. Snipes, who has built a worldwide following acting in films like the “Blade” vampire trilogy, must pay up to $17 million in back taxes plus penalties and interest.

Like Helmsley, Snipes’ celebrity and refusal to admit his obvious wrong-doing hurt him significantly when it came to sentencing.

Of course, if he’d had Senate Majority Leader as his attorney, he might have fared better:

The said thing is, I think Senator Reid actually believes what he’s saying.

H/T: Freedom Democrats

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