Government‐Run Business Fails
Holman Jenkins discusses problems with the air traffic control (ATC) system today in the Wall Street Journal. He mentions failures stemming from government ownership, something I’ve documented with many federal activities. If activities such ATC and postal services can be supported by private revenues, they should be privatized.
Private businesses fail all the time—everything from Silicon Valley Bank to neighborhood restaurants. They should be allowed to fail, and they will be replaced by better‐run enterprises. The problem with government is that the failings are continual but the agencies are not replaced and rarely reformed.
Also, government‐run businesses suffer from unique failings, a few of which Jenkins touches on:
Political Manipulation. One reason government‐run businesses are inefficient is that self‐interested politicians micromanage them. Jenkins says that the Federal Aviation Administration (FAA) has been “stymied for more than a year by Sen. Chuck Schumer and organized labor” in reallocating workers on the East Coast to mitigate air traffic delays. There are similar problems with the U.S. Postal Service. Its improvements are stymied by politicians intervening to protect their districts at the expense of nationwide efficiencies.
Inexperienced Leaders. Presidents often appoint inexperienced partisans to run large and complex agencies. Putting small‐town mayor Pete Buttigieg in charge of the Department of Transportation is a good example, as Jenkins notes. Jenkins also points to Biden’s recent nominee to head the FAA: “Phil Washington, who lacked aviation experience except a single year running the Denver airport.” During the George W. Bush administration, the disastrous response to Hurricane Katrina partly stemmed from Homeland Security being stuffed with inexperienced party loyalists. And administrations of both parties have long appointed big money donors to ambassador posts rather than people who know about foreign policy or their host countries.
Lack of Innovation. Government bureaucracies do not innovate, and so it is especially harmful when they are imposed on industries that are changing rapidly around them. Jenkins compares the FAA’s backwards technology to advances in the private ATC systems of Canada and the U.K. “London City Airport now has a digital control tower allowing personnel to be used far more efficiently. Canada’s system has been commercially self‐funding since 1996 and speedily incorporates new technology. The U.S. still relies on radar operators handing slips of paper to each other.”
I discuss Canada’s ATC privatization here, and the move toward digital towers abroad here. The photo below is the London ATC facility that Jenkins mentions.
There are many types of government failure and many advantages of privatizing government services. We need more columnists and news services focused on federal bureaucratic failure. With the government growing 40 percent in the past four years, it is a target‐rich environment.