My Weekly Reading for May 25, 2025

by Chris Edwards, Cato at Liberty, May 20, 2025

Excerpts:

The Secretary of Transportation, Sean Duffy, is on the case, but so far, he is just proposing to throw more money at the problem. By itself, more money will not cure the ATC system’s deep flaws, which stem from trying to run a high-tech industry from within a bureaucracy at the Federal Aviation Administration (FAA).

With all the red tape, risk aversion, and political interference inherent in federal bureaucracies, the FAA’s performance may get even worse over time as global aviation demand continues rising and the skies get ever more crowded.

Congress must restructure ATC. The obvious reform model is Canada, whose ATC system has excelled for three decades as a self-funded, non-profit corporation outside the government bureaucracy.

And:

Canada’s System

Robyn: “The Canadian ATC provider Nav Canada, the model for the 2018 House bill, is handling significantly more traffic with a smaller staff than in 1996. It beats the FAA on unit costs despite its smaller scale.”

by J.D. Tuccille, Reason, May 21, 2025.

Excerpt:

In 1988, Californians passed Proposition 103 which, according to the state’s summaryof the measure, “required that every insurer reduce its rates to at least 20% less than the rates that were in effect on November 8, 1987 unless such rollback would lead to a company’s insolvency.” The California Supreme Court modified this to allow for what state officials considered “a fair rate of return,” but there are more voters paying premiums than working for insurance companies, with predictable results.

The Problem With Voting Yourself Discounts at Others’ Expense

According to a 2023 paper from the International Center for Law and Economics, as of 2020, despite sky-high property values and well-known wildfire risks, Californians “paid an annual average of $1,285 in homeowners insurance premiums across all policy types—less than the national average of $1,319.” When insurers need to raise rates to reflect risks and costs, they can only do so after extended hearings and a government review process designed to please voters, not to reflect economic reality. Unsurprisingly, well before the Los Angeles fires, insurers were limiting coverage and leaving the state.

Even Insurance Commissioner Ricardo Lara admits insurers “don’t have to be here, and when we try to overregulate, we’ll see what happened after the Northridge earthquake, when the legislature came in and tried to overregulate, and they no longer write earthquake insurance in California.”

by Robert Poole, Reason, May 21, 2025.

Excerpt:

As detailed in a 2023 Department of Transportation inspector general report, the Philadelphia control tower and Terminal Radar Approach Control (TRACON) facility, which services Newark’s airspace, were among the least understaffed of major FAA facilities. But The New York Times recently reported on the critical air traffic control understaffing issues now impacting Newark Airport. The Philadelphia TRACON that is responsible for managing Newark’s airspace has “only 22 controllers certified to guide planes in and out of the airport,” the Times reports—significantly lower than the FAA’s target of 38 controllers. “The overall staffing level of the Philadelphia facility, which is also responsible for several other airports in the region, is about 70 percent.”

And even fewer controllers are often available to work. The Times notes that as few as “three air traffic controllers were scheduled during a period on Monday evening at the [Philadelphia] facility that guides planes in and out of Newark—far short of the target of 14 for that shift.”

That brings us to the third problem: the air traffic control system’s obsolete communications technology. All the flight data from New Jersey airports (Newark, Teterboro, and Morristown) get transmitted to Philadelphia via a 25-year-old telecommunications system and routed to a controller display system called STARS, the Standard Terminal Automation Replacement System. STARS processes radar data for Newark and, according to the FAA, “telecommunications lines feed this data from New York to the Philadelphia TRACON, where controllers handle Newark arrivals and departures.”

Note: Robert Poole is one of my go-to people when I want to understand anything about transportation policy. If I recall correctly, he was in the forefront, in 2001, in arguing for not having the TSA have a monopoly on airport security. The original legislation allowed Kansas City, MO and San Francisco, among others to have a private contractor rather than TSA.

by Gary Winslett, Washington Post, May 14, 2025.

Excerpt:

There’s a popular story that politicians in both parties like to tell us: The Rust Belt was a thriving region until China, Mexico and their American business allies tore their manufacturing jobs away with lopsided trade deals. Whether through President Donald Trump’s tariffs or some Democratic alternative, it’s now up to Washington to get them back.

It’s a politically convenient tale for courting voters in key swing states, pining for the way things once were. The problem is that it’s not true — and it is leading to some terrible policy decisions.

A big missing part of the story: Interstate competition. The Rust Belt’s manufacturing decline isn’t primarily about jobs going to Mexico. It’s about jobs going to Alabama, South Carolina, Georgia and Tennessee. To put it in college football terms, the traditional Big Ten has been losing out to the Southeastern Conference. In 1970, the Rust Belt was responsible for nearly half of all manufacturing exports while the South produced less than a quarter. Today, the roles are reversed, it is the Rust Belt that hosts less than one-fourth of all manufactured exports and the South that exports twice what the Rust Belt does.