Thursday, September 10, 2009

Setting the Agenda for Aviation Policy

Last night, President Barack Obama addressed the nation on the contentious and highly politicized issue of reforming health care. Without weighing in on the substantive questions (which in any event lie outside the proper conceptual scope of this blog), it is at least fair to say that Obama has used the authority of his office to plant health care reform on the national agenda and that until he chooses--following victory, defeat, or stalemate--to remove it, it will continue to be a prime focus for punditry, legislative bickering, and even dinner table debates. The power of agenda-setting is not provided for in the Constitution. (In fact, the Constitution gives the chief executive very few direct powers of any kind.) See Gene Healy, The Cult of the Presidency (Cato Inst. Press, 2008).  It represents an organic development of the office.

For those of us who pay attention to the aviation industry, however, the President’s agenda-setting activities--if indeed we can identify any of them--have been pretty threadbare. To a large degree this is understandable. We are in the midst of the greatest economic downturn since the Great Depression. According to the eminent Seventh Circuit judge and uber-commentator Richard Posner, we are enduring an actual depression. See Richard A. Posner, A Failure of Capitalism (Harvard Univ. Press, 2009). U.S. policymakers are currently fixated, in addition to health care, on two major overseas conflicts. Getting traction for transportation policy issues at present is virtually impossible. Yet no robust economic recovery can occur if the United States embraces protectionism with respect to goods and services. Concerns have already been raised by trade officials and observers that the United States has unfairly subsidized its automotive sector, illegally reneged on commitments to open up trucking routes to Mexico under the North American Free Trade Agreement, and jeopardized its cosmopolitan trade instincts by inserting "Buy America" provisions into a $700 billion plus economic stimulus bill. See The Nuts and Bolts Come Apart, Economist, Mar. 26, 2009 (available here).

The air transport industry has had no less reason for concern. The 2009 FAA Reauthorization Act brims with protectionist provisions which sit like a black cloud over the ongoing "second stage" U.S./EC negotiations to expand the rights and opportunities granted to both parties' airlines under their 2007 Air Transport Agreement. As this blog has serially discussed, some of these provisions may prove to be a "bridge too far" and compel the EU Member States to suspend provisions from the first agreement. See, e.g., earlier posts here, here, & here.

Why has this happened? Arguably, if aviation is truly "off the agenda," shouldn't we at least be experiencing stasis right now? Why these legislative rumblings which will have detrimental effects on free trade in air services? The truth is that aviation is not off the agenda--not completely. It's simply been transferred from the conscious realm of newspaper headlines, CNN reports, and (non-aviation) blogs to sit behind a shroud of ignorance – the recondite realm of Congressional committees and subcommittees where the information costs to average Americans are high and patience for (or interest in) their protracted discussions is low. Rep. James Oberstar, Chairman of the House Transportation Committee, is a master within this mysterious realm. Taking full advantage of the aviation policy vacuum in the current administration, Rep. Oberstar seeks a new order of things: an end to global airline alliances; foreigners denied careers in the management of U.S. airlines; a halt to the open skies adventure. The potential consequences for the industry--and for consumers--are quite staggering.

In the late 1970s, President Jimmy Carter, by an act of sheer presidential political will, placed airline deregulation on the national agenda. For all of the important work Senator Kennedy and his subcommittee did on the shortcomings of the Civil Aeronautics Board or that Alfred Kahn accomplished as chairman of that agency, deregulation required the direct interest of the President before it could evolve into a legislative fact. Robust economic analysis and careful studies of intrastate air transport exposed a solid case for removing the deadweight of regulation. But intellectual speculation was nowhere near adequate to accomplish the change that economists and lawyers were proposing. A leader had to take the matter to the country. The Obama administration is allowing members of Congress to practice a retrogressive and mercantilist air transportation policy. If he seizes the agenda-setting power of his office, however, the President can champion airline deregulation on a global scale. But the power of his Presidency needs to be deployed. From Chicago’s President, a new Chicago Convention? Cf. Int'l Aviation L. Inst. & Chi. Council on Global Affairs, Sustainable Aviation Policies for America and the World (2006) (available here) (summarizing the proceedings of an aviation leadership summit where FedEx Senior Vice President and General Counsel Rush O'Keefe called for a new Chicago Convention).

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