Minor Thoughts from me to you

Tim Geithner (aka the tax cheat Treasury Secretary) wrote an op-ed in the Wall Street Journal, defending the new financial regulations. I think he better illustrated the perils of the passive voice, however.

A large shadow banking system had developed without meaningful regulation, using trillions of dollars in short-term debt to fund inherently risky financial activity. The derivatives markets grew to more than $600 trillion, with little transparency or oversight. Household debt rose to an alarming 130% of income, with a huge portion of those loans originated with little to no supervision and poor consumer protections.

A "shadow banking system had developed"? Just like that? All by itself? I think there might be some interesting history about why various people started trading and banking outside of the normal system. What incentives did they have to do that? What was wrong with the normal system?

Why were these shadow bankers so interested in inherently risky financial activity? Did they feel constrained by existing restrictions and regulations? Did they feel driven by some kind of requirements to see out excessive risk?

Why did the derivatives market grow so large? What benefit did bankers see in trading so massively in derivatives? Was there a reason that they couldn't trade more directly?

What did households choose to grow their debt so dramatically? What factors made them feel that large levels of debt were both safe and desirable?

These are just a few of the potential questions that people might ask, if Geithner had used the active voice. It's a good thing then that he used the passive voice to defend the administration's priorities.

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I like the way Sheldon Richman explains the difference between freedom and compulsion, between negative liberty and positive liberty.

Here's the bottom line.

What we have in this debate is a clash not between two liberty interests, but rather between two rights-claims – one negative (genuine), the other positive (counterfeit). All that is required for the exercise of a negative right (to self-ownership and, redundantly, liberty and one’s legitimately acquired belongings) is other people’s noninterference. (“When we say that one has the right to do certain things we mean this and only this, that it would be immoral for another, alone or in combination, to stop him from doing this by the use of physical force or the threat thereof,” writes James A. Sadowsky, S.J.) But the fulfillment of positive rights requires that other people act affirmatively even if they don’t want to — say, by providing products or paying the bills. If one person’s freedom depends on the infringement of someone else’s freedom, the first claim is illegitimate. To hold otherwise is to reject the principle of equality.

This controversy is not about contraception. It’s about freedom versus compulsion.

And here's the part that's been driving me nuts for two weeks now. There are too many smart people repeating this line. Are they really that dumb? Or do they just think that everyone else is?

How exactly was the liberty to use contraception jeopardized by the Catholic exemption? In no way would a woman’s freedom in this respect be infringed simply because her employer was free to choose not to pay for her contraceptive products and services.

Yet advocates of Obamacare insist on conflating these issues. They repeatedly portray opposition to forced financing of contraception as opposition to contraception itself. (Alas, some conservatives have encouraged this conflation.) Must the difference really be spelled out?

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In 1986, Congress passed EMTALA, making it a federal crime to transfer a patient from one hospital/emergency room to another for financial reasons. It compels hospitals to render care, even without any compensation.

... But EMTALA did more. It killed the voluntary nature of the Medicaid system.

... Today, if Arizona decided to leave Medicaid and resume its pre-Medicaid system, it couldn’t do so. EMTALA would prevent it from functioning. EMTALA specifically bans any hospital from transferring patients for financial reasons. Arizona’s pre-Medicaid system depended upon the transfer of indigent patients from private centers into its indigent health system, thus relieving private hospitals and providers from the burden of constantly providing uncompensated care.

States should be free to design their own systems and innovate, instead of all being forced into the same rigid mold.

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Some health plans require you to fill your prescriptions through mail order pharmacies. Some patients don't like that requirement. In New York State, that requirement will soon be a thing of the past.

The bill barred insurers or employers from forcing patients to use mail-order plans for prescription drugs, except for plans negotiated by unions. Instead, consumers would be guaranteed the choice of having their prescriptions filled either through mail-order or at the local drugstore, without any added copayments or fees.

So, at a time when health plans are under tremendous pressure to cut premiums (or at least to raise them as little as possible), the Governor is going to raise health plans' costs? Not exactly.

But the governor signed both bills late Monday on the condition that the Legislature would retroactively amend them to require retail pharmacies to accept the same reimbursement rates for drugs as mail-order pharmacies.

Oh, okay. The Governor is going to force small mom-and-pop stores to lose money on every prescription that they fill. Yeah, that's going to work out well.

There's absolutely no good way to fulfill this requirement without raising somebody's costs. The patient's preference for locally filled prescriptions is more expensive. By rights, patients should pay for that preference. Instead, the Governor is looking to make someone else pay instead. That's always a bad idea and this is going to end up back-firing.

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I'm chortling madly over here. Why? Because the law of unintended consequences strikes again. Because people who ignored Bastiat's dicta regarding the "seen and the unseen" are being bitten, hard, by reality. Because federal regulators (hi Senator Durbin!) are once again proving to be powerless. People are not just pieces to be moved around a chess board by wise overseers. They make their own decisions and you can't predict what the ultimate effect of regulations will be.

Many business owners who sell low-priced goods like coffee and candy bars now are paying higher rates—not lower—when their customers use debit cards for transactions that are less than roughly $10.

That is because credit-card companies used to give merchants discounts on debit-card fees they pay on small transactions. But the Dodd-Frank Act placed an overall cap on the fees, and the banking industry has responded by eliminating the discounts.

"There will be some unhappy parties, as there always is when the government gets in the way of the free-market system," says Chris McWilton, president of U.S. markets for MasterCard Inc. He said the company decided that it couldn't sustain the discounts under the new rate model because the old rates had essentially subsidized the small-ticket discounts.

And, the kicker.

Mr. Scherr, the coffee shop owner, says that debit-card fees at one of his five stores rose to about 4.5% of sales from 3.5% of sales in the month after the new law took effect. "It's a killer for me," says Mr. Scherr, who estimates that 95% of his sales are under $15.

In the meantime, Mr. Scherr is weighing whether the expense of an ATM would justify its installation. If he gets one, he says he plans to "stick a sign on top of it, calling it a 'Durbin ATM.'"

I didn't expect that level of pushback from a Manhattan coffee shop owner. Good for him—I hope he does it.

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Main Street had profits of $1 million in the second quarter and wrote off 1.25% of its loans as uncollectible. That is below the industry's charge-off rate of 1.82% in the FDIC's data for the first quarter, the latest available. The bank has earned nearly $11 million in the past year.

In July 2010, the FDIC slapped Main Street with a 25-page order to boost its capital, strengthen its controls and bring in a new top executive. Regulators also said the bank was putting too many eggs in one basket. Mr. Depping says regulators wanted the bank to shrink its small-business lending to about 25% of the total loan portfolio, down from about 90%.

There’s nothing quite like the arrogance of telling a successful business that it’s doing everything wrong and that it needs to change the cornerstone of it’s business model. The bank’s chairman is now planning on giving up the bank’s charter and selling the branches to other local banks.

This successful local business was killed by the too strict, cookie cutter, one-size fits all financial regulation coming out of Washington. Heckuva job guys.

This is good news.

Mr. Frank, Rep. Ron Paul (R., Texas) and others will make the bill's language public Thursday. It would be the first bill of its kind ever introduced in Congress, the release said.

"The legislation would limit the federal government's role in marijuana enforcement to cross-border or inter-state smuggling, allowing people to legally grow, use or sell marijuana in states where it is legal," the release said.

"This is not a legalization bill," a spokesman for Mr. Frank said.

More than a dozen states have laws that allow the sale of marijuana for medical use, but the practice isn't legal under federal law, and federal authorities have raided marijuana dispensaries.

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Georgia Governor Nathan Deal recently signed a bill that removed state regulations that prevented small business owners from buying out of state insurance. Giving business owners more choices will do a lot to provide healthcare competition and help to bring down prices. More states should pass legislation like this and Georgia should open this up to all state residents, not just small business owners.

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Senator Rand Paul's (I love saying that) earlier remarks were a welcome contrast to remarks offered last summer by members of the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations.

• Henry Waxman: "Do these companies have researchers that are adding to the information that will help us have these breakthroughs? ... Are they adding to the scientific knowledge? ... If they're all closed down then so be it. ... They don't really serve a useful purpose."

• [Parker Griffith]: "I don't think that the companies that are in question here would, if they disappeared tomorrow, would impact the scientific community and our desire to do research into genetics. ... This is nothing more than the snake-oil salesman revisited again. ... It's very difficult to protect the public from itself in its desire to be healthy ..."

That's in relation to companies that help you to sequence your own genome and see what genetic risks you might or might not have. How perfectly, condescendingly, lovely.

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Did you know that cigarette manufacturers used to compete with each other to see how nasty, vile, and unsafe they could make each others' products look? And that they actively competed on making healthier, safer cigarettes? And that the Federal Trade Commission told them to knock it off, leaving them with no choice but to make cigarettes look cool?

True story.

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Oh, government. There you go again, making life miserable for everyone.

The CPSC's Defective New Complaints Database:

We are told constantly that government can play a beneficial role in the marketplace by taking steps to make sure consumers are more fully informed about the risks of the goods and services they use. But what happens when the government itself helps spread health and safety information that is false or misleading? That question came up recently in the controversy over New York City's misleading nutrition-scare ad campaign, and it now comes up again in a controversy over a new database of complaints about consumer products sponsored by the federal Consumer Product Safety Commission (CPSC).

As part of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Congress mandated that the CPSC create a "publicly available consumer product safety information database" compiling consumer complaints about the safety of products. Last week, by a 3-2 majority, the commission voted to adopt regulations that have dismayed many in the business community by ensuring that the database will needlessly include a wide range of secondhand, false, unfounded or tactical reports. The Washington Times editorializes:

... [Under the regulations as adopted last week] anybody who wants to trash a product, for whatever reason, can do so. The commission can leave a complaint on the database indefinitely without investigating its merits "even if a manufacturer has already provided evidence the claim is inaccurate," as noted by Carter Wood of the National Association of Manufacturers' "Shopfloor" blog ...

Trial lawyers pushing class-action suits could gin up hundreds of anonymous complaints, then point the jurors to those complaints at the "official" CPSC website as [support for] their theories that a product in question caused vast harm. "The agency does not appear to be concerned about fairness and does not care that unfounded complaints could damage the reputation of a company," said [Commissioner Nancy] Nord.

This law was, let us remember, passed before President Bush left office. It was atrocious then, it remains atrocious now. I hold to my main political theme: whenever government gets involved, things get worse.

The minimum wage isn't bad because it hurts employers. It's bad because it hurts employees.

Armed and Dangerous » Blog Archive » Marginal Devolution

What these guys have in common is that they're only marginally employable. What borderline mental illness has done to one, mediocre skills and the unintended consequences of anti-discrimination laws have done to the other. As long as I've known both (and that would actually be most of my years, for both of them), they've worked dead-end jobs and put their passion into science fiction and wargaming. They're decent, honest, unambitious men who have never wanted anything but steady work, a normal life, and a hobby or two. They're not stupid and they have respectable work habits; in fact they're probably more conscientious and safe than average. Now they don't quite fit; too old, too geeky, too male, too quiet. The job market has discarded one and the other is hanging by a thread.

When I look at these guys, though, I can't buy the explanation most people would jump for, which is that they simply fell behind in an increasingly skill-intensive job market. Thing is, they're not uneducated; they're not the stranded fruit-picker or construction worker that narrative would fit. Nor does offshoring explain what's happened to these guys, because their jobs were the relatively hard-to-export kind.

No. What I think is: These are the people who go to the wall when the cost of employing someone gets too high. We've spent the last seventy years increasing the hidden overhead and downside risks associated with hiring a worker -- which meant the minimum revenue-per-employee threshold below which hiring doesn't make sense has crept up and up and up, gradually. This effect was partly masked by credit and asset bubbles, but those have now popped. Increasingly it's not just the classic hard-core unemployables (alcoholics, criminal deviants, crazies) that can't pull enough weight to justify a paycheck; it's the marginal ones, the mediocre, and the mildly dysfunctional.

Again, the minimum wage isn't bad because it hurts employers. It's bad because it hurts employees. It makes employees more expensive to hire, more expensive to take a risk on, and easier to fire. As soon as someone costs more in salary, benefits, and regulatory costs than they generate in revenue, they become a liability. And few businesses can afford to keep such employees just for the thrill of being charitable.

(Obamacare delenda est)

It seems like the whole world is annoyed that Spirit Airlines decided to charge passengers for carry-on bags.

Some in Congress believe airline fees should have limits. A bill has been introduced to outlaw carry-on baggage fees; another effort is aimed at taxing fees just as tickets are taxed so government doesn't lose out on revenue as airlines shift their charges from tickets to fees. And the DOT is looking closely at Spirit, mostly to see if the airline properly discloses its fees and other charges to consumers.

Transportation Secretary Ray LaHood has been vocal in his criticism of Spirit's carry-on fee.

"Charging passengers to stow carry-on bags in overhead bins does not strike me as good customer service," he said in a statement to this newspaper. "We will take up this issue as part of an upcoming rulemaking on consumer protection."

I, for one, think Secretary LaHood needs to muzzle himself. I like the idea of Spirit Airlines charging for carry-on luggage. Luggage belongs in the cargo hold, not the passenger compartment. Spirit is quite clear about their reasons -- and I agree with every one of them.

One reason some airlines are eager to charge fees for carry-on bags: There's no room at the (overhead) bin.

To avoid checked-baggage fees, more travelers are carrying more bags onboard with them. At the same time, airlines have packed flights with more passengers, on average. That's led to a real-estate crisis in the cabins—not enough space in overhead bins to accommodate all customers. So more flights are delayed when customers struggle to cram bags into full bins and airline workers have to send bags that don't fit down to cargo compartments.

I always check my luggage when I fly. I hate lugging a suitcase around an airport. I prefer to travel with a small, personal bag and spend my time doing something other than acting as an unpaid baggage handler. In the few flights I've take recently, I've had to stand in airplane aisles waiting as people try to shove large bags into small openings. I've had to sit and watch (and watch and watch) as the flight crew tries to find a spot for every bit of a family's vacation luggage. I've even had to watch a few (supposedly professional) businessmen yell at the flight crew for not having more space available.

If Spirit Airlines flew out of Madison, I'd look to buy tickets from them first. I want to get somewhere quickly. If charging a fee is what it takes to make my fellow passengers quit acting like idiots, then I'm happy to see the fee imposed. Because -- and let's be clear here -- there wouldn't be a need for a fee in the first place if passengers didn't consistently ignore airline guidelines about carry-on luggage.

"We're not having any second thoughts. Right now, it still seems like a good idea to us," says Ben Baldanza, chief executive of Spirit, based in Fort Lauderdale, Fla.

Mr. Baldanza says Spirit will be able to trim five minutes off each flight—20 hours of airplane time per day. That's like having two extra $40 million planes in your fleet, and would let the airline add more flights without having to buy more planes. Today, without carry-on fees, Spirit is often gate-checking as many as 20 to 30 bags per flight that don't fit in overhead bins.

Passengers who don't like it can feel free to fly with another airline.

Liberals might want to consider that one of the reasons most people don't like government is the behavior of, well, government. Two stories caught my eye this morning.

First: One-Fourth of Nonprofits Are to Lose Tax Breaks - NYTimes.com.

As many as 400,000 nonprofit organizations are weeks away from a doomsday.

At midnight on May 15, an estimated one-fifth to one-quarter of some 1.6 million charities, trade associations and membership groups will lose their tax exemptions, thanks to a provision buried in a 2006 federal bill aimed at pension reform.

"It's going to be an unholy mess once these organizations realize what's happened to them," said Diana Aviv, president of the Independent Sector, a nonprofit trade group.

The federal legislation passed in 2006 required all nonprofits to file tax forms the following year. Previously, only organizations with revenues of $25,000 or more -- or the vast majority of nonprofit groups -- had to file.

The new law, embedded in the 393 pages of the Pension Protection Act of 2006, also directed the Internal Revenue Service to revoke the tax exemptions of groups that failed to file for three consecutive years. Three years have passed, and thus the deadline looms.

Next: I Got a Little More Libertarian Today | The Agitator.

So I got an email from TurboTax this afternoon telling me that my federal tax return has been rejected. Reason? Invalid Social Security number. So I double checked the return. Same Social Security number I've been using since I started paying taxes. Same number that's on my Social Security card. So TurboTax gave me the 800 number of the Social Security Administration so I could call to verify my number. Except that when I called, they told me that they can only verify numbers over the phone for employers, not individuals.

... The kicker: According to the TurboTax help forum I consulted, other people this has happened to say they were fined for filing late, even though they had actually filed on time, and it was the government's fault that their Social Security number was rejected.

"Let me be clear: if you like your doctor, you can keep him". Who hasn't heard the President make that promise by now? The problem is, it makes a huge assumption. That promise assumes that your doctor isn't going to retire as a result of healthcare reform.

The New England Journal of Medicine reports that more than 30% of physicians want to leave medical practice if the current healthcare reform plans are implemented.

In other news, nurses report that they spent 25% of their time doing "indirect patient care".

Nurses reported having to document patient care information in multiple locations, in addition to having to complete logs, checklists and other redundant paperwork that prevented them from having more time with their patients. Beyond these paperwork redundancies, nurses reported significant time being wasted trying to secure needed equipment and supplies.

When asked for solutions to these challenges, nurses recommended a combination of ancillary staff support, hospital-wide communications technology and reductions in redundant regulatory requirements.

Adding more bureaucracy, rules, and paperwork to the medical process is unlikely to make things better. Doctors may quit and nurses may quit. But, by all means, bring on the healthcare reform. If you like your doctor, the President has promised you can keep him. And the President is an honorable man.

In today's New York Times, David Leonhardt talks about the problem of health care choice. Specifically, the fact that most people don't have any choice. He starts out making a lot of sense.

Health insurers often act like monopolies -- like a cable company or the Department of Motor Vehicles -- because they resemble monopolies. Consumers, instead of being able to choose freely among insurers, are restricted to the plans their employer offers. So insurers are spared the rigors of true competition, and they end up with high costs and spotty service.

But then, discussing the Wyden-Bennett bill, he makes less sense.

In the simplest version, families would receive a voucher worth as much as their employer spends on their health insurance. They would then buy an insurance plan on an "exchange" where insurers would compete for their business. The government would regulate this exchange. Insurers would be required to offer basic benefits, and insurers that attracted a sicker group of patients would be subsidized by those that attracted a healthier group.

The immediate advantage would be that people could choose a plan that fit their own preferences, rather than having to accept a plan chosen by human resources. You would be able to carry your plan from one job to the next -- or hold onto it if you found yourself unemployed. You would never have to switch doctors because your employer switched insurance plans.

The problem with this idea is that it really doesn't offer much choice. Insurance companies are still protected from competition by the friendly confines of a government controlled "exchange". True choice would consist of an open market place where any entrepreneur can offer any product to any interested consumer. The success or failure of the product would depend on one all important criteria: whether or not consumers saw any value in it. Insurers would no longer be able to foist their plans on consumers who don't want them. And entrepreneurs would be free to introduce radical, new products that threaten the current insurance companies.

That kind of free choice wouldn't exist under an insurance "exchange". Each new product would have to be carefully weighed and analyzed by government bureaucrats. Nothing new would be approved unless they determined that it was worthwhile and useful. Existing insurance companies would have a hand in writing the regulations and only products that conform to the current status-quo would be allowed in. Anything that threatens that status-quo would be barred from the "exchange" and never offered to consumers. The end result would be akin to Ford's infamous statement that consumers could buy any color car they wanted -- as long as it was black.

Instead of fostering innovation and creativity in health care, the Wyden-Bennett bill would take the current "insurance" industry and lock it in cement. Consumers would continue to be forced to buy health insurance not health care and bureaucrats would continue to dicatate how, when, and where their health care dollars can be spent.

All of this makes me happy to hear that Wyden-Bennett doesn't have much support in the Senate.

The Capital Times published an article on the shortage of child day care in Dane County. It's not until the 11th paragraph that they finally reveal that the state government is to blame.

The primary reason it's so hard to find care for infants is because of a state mandated caregiver-child ratio that requires one provider for every four babies or toddlers under age 2. Ratios increase according to the age of the child. For example, the ratio is 1 caregiver for every 13 children for 4- and 5-year-olds. So, the staffing costs for infants can be more than triple what they are for older children.

Most child care centers don't offer infant care, in part because of financial reasons. "Not to sound cold, but they don't make money on infants because the ratio is so small," says Jody Bartnick, the executive director of Community Coordinated Child Care, a children's advocacy organization commonly referred to as 4-C. Stricter regulations add costs, she said. Infant rooms require their own sink, their own refrigerator and other equipment.

And when those costs are passed on to consumers, they are significant for most household budgets.

4-C numbers show that the average weekly cost of infant care in Dane County as of March 2008 was $245 in a family child care center and $275 at a group center. For preschool care, the number drops to about $220 at both types of centers. At those rates, child care can cost between $11,000 and $14,000 a year -- compared with about $7,300 for in-state tuition at UW-Madison.

In the name of making day care safer, they've actually made day care nearly impossible to get. And, when you can get it, it's astronomically expensive. For an area that prides itself on its progressivism, this sounds pretty regressive to me.

Of course, they'll redeem themselves by attempting to raise my taxes so they can turn around and subsidize child care for someone else. The obvious solution -- deregulate the market -- would never occur to them.

You're doing a heckuva job, Jimmy Doyle.

Scene Stealer - The Web Is Pouncing on Hollywood's Ratings - NYTimes.com

The standard Hollywood ratings -- G, PG, PG-13, R and NC-17 -- must now compete with all manner of Internet-based ratings alternatives, some of which are gaining new traction through social networking tools.

SceneSmoking.org, which monitors tobacco use in movies, issues pink, light gray, dark gray or black lungs to films, depending on how smoking is depicted. Kids-in-Mind.com ranks movies on a scale of 1 to 10 in categories like "sex and nudity" and "violence and gore."

Movieguide.org issues ratings from a Christian perspective. A "+4," or "exemplary," means "no questionable elements whatsoever." A "-4," or "abhorrent," means "intentional blasphemy, evil, gross immorality."

The article goes on to talk about how people want to "fix" the MPAA ratings, according to various pet standards.

Why?

It seems like something great is happening. People that are passionate about different things -- and have different standards of acceptability -- are creating and disseminating their own ratings. Parents, or discriminating movie goers, who care about particular standards can use the ratings from a group that shares those same standards. There's absolutely, positively no way that Hollywood -- or the FTC -- can create a single rating system that represents all of those different standards.

There's a simple reason for that. One group of parents believes that nudity and coarse language is a natural and normal part of life. They believe that sex and nudity should be celebrated while their children should be protected from exposure to violence and aggression. There are other parents who would be horrified at the thought of their children seeing some bare skin but are perfectly okay with their children seeing movies that depict massive amounts of violence. Now, design me a PG-13 or R rating that makes both groups of parents happy.

I celebrate the diversity in ratings. I may even use one standard to evaluate which movies my children will be allowed to see and a completely different standard to evaluate which movies I'll see. Vive la difference!

Incandescent Bulbs Return to the Cutting Edge - NYTimes.com

...the incandescent bulb is turning into a case study of the way government mandates can spur innovation.

... The first bulbs to emerge from this push, Philips Lighting's Halogena Energy Savers, are expensive compared with older incandescents. They sell for $5 apiece and more, compared with as little as 25 cents for standard bulbs.

But they are also 30 percent more efficient than older bulbs. Philips says that a 70-watt Halogena Energy Saver gives off the same amount of light as a traditional 100-watt bulb and lasts about three times as long, eventually paying for itself.

It's a case study in the way that mandates can spur innovation, but I'm not sure the news is as good as the New York Times seems to think it is. A government mandate has so far managed to make incandescent bulbs 30% more efficient and 1900% more expensive. This is progress?

Hate flying? Don't blame it on the evil "free-market", "private" airlines. There are huge chunks of the system that they don't control. There are also many decisions that they don't get to make, thanks to government regulations. Add air travel to the list of hated things that government is partially responsible for screwing up. Scott McCartney writes about some of the details in the Wall Street Journal.

Last year, nearly one-quarter of all U.S. airline flights were delayed, and the average delay was 55 minutes, according to the Federal Aviation Administration. Passengers lost 112 million hours of time spent waiting, according to estimates compiled by GRA Inc., a consulting firm, based on Department of Transportation data. That's 12,785 years worth of waiting time.

And that doesn't count the delay already baked into airline schedules. On average, U.S. airline flights were scheduled 15 minutes longer in 2006 than in 1997, based on the same distances, according to a study by researchers Steven Morrison and Clifford Winston. Compare current airline schedules to old timetables and you'll find that it apparently takes 25 minutes longer to fly from New York to Los Angeles than it did 10 years ago.

Delays cost airlines $8.1 billion in direct operating costs in 2007, mostly burning extra fuel and paying crews for the extra time. That's more than the U.S. industry has ever earned in a year. Cutting delays can boost productivity, help the environment, reduce foreign oil imports and make the airline industry more financially stable.

More than 1,600 flights last year sat for longer than three hours waiting to take off, according to the Bureau of Transportation Statistics.

How is that the government's fault? Well, they control the old, out-dated, and insufficient air traffic control system.

The root of most of the travel problems is a creaky air-travel system run by the FAA that struggles to meet today's demand and certainly can't handle future growth. It's basic national infrastructure in need of modernization. The skies are our interstate highway system and we need new freeways.

The current time-table for modernizing air-traffic control covers 20 years, and the history of the effort is filled with delays. What's needed is a full-court press.

Former FAA Administrator Marion C. Blakey says the transformation to a modern system can "absolutely" be sped up. She says the FAA can quickly put in more departure and arrival routes that take advantage of advanced navigation equipment already on a lot of newer aircraft, and if the government makes a bigger commitment to modernize, it will rev up improvement even further by spurring bigger investments by airlines. So far, airlines have been cautious about buying new equipment before the FAA can put it to good use.

"A bigger government commitment in this area, though modest by most standards, makes the business case work for the airlines to equip much of the rest of their fleet," Ms. Blakey said.

Many industry watchers would like to see the FAA split into two parts: a safety regulator for airlines, airports and air-traffic controllers, and a separate air-traffic-control system run in a business-like manner by a not-for-profit entity, not government.

One major reason to split the FAA is that the agency today is both the safety regulator and the operator. In air-traffic control, the FAA regulates itself, leading to potential conflicts of interest.

Dorothy Robyn, a principal of Brattle Group and the White House transportation adviser in the Clinton administration, says the U.S. is one of the few industrialized nations in which air-traffic control is still operated and regulated by the same agency. This summer she proposed that a split would enhance safety and at the same time yield faster progress on modernization.

"The problems of the air-traffic-control system are the predictable result of flawed public policy," Dr. Robyn says.

Air-traffic control is a high-technology business these days, requiring lots of investment in new equipment and lots of focus on productivity and service. Traditional government agencies aren't particular good at that, especially when constrained by federal budget rules and sometimes micromanaged by Congress, which often dictates which town will get a new control tower or runway.

Just one more reason why I'm thankful that we have a government to watch over us and protect us. Or not.