Posted by | December 31, 2010 11:31 | Filed under: Top Stories

by Stuart Shapiro

Alfred Kahn passed away earlier this week.  He is not a big name to those who follow politics today but he had a huge impact on public policy in the 1970s.  Kahn was a proponent of deregulation of the airline and trucking industries and oversaw airline deregulation during the Carter Administration (with cooperation from Ted Kennedy).

The most important result of Mr Kahn’s work was that airlines, no longer forced to compete simply on quality and amenities, began to compete fiercely on price. Discount airlines like Southwest and JetBlue entered the market and forced the existing giants to adapt. Eventually, air travel went from being a luxury to being something that many middle- and even working-class Americans could afford. That’s a good thing. But making air travel affordable also meant taking away the frills—and making it much less pleasant.

Kahn realized that regulation and deregulation were not inherently bad or good ideas.  Rather like all government actions they have benefits and they have costs.  In the case of the airlines, the benefits far outweighed the costs.   In the case of telecommunications which he wrote about after leaving government, it was a much tougher call and depended on the form of regulation.  In an era when polarization is the norm, it is good to remember civil servants who made major contributions to policy in a bipartisan manner.

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Copyright 2010 Liberaland
By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.