Note (20JAN2020): As though Boeing has not had enough bad press, last week a Boeing-built airliner dumped raw fuel onto a school in Los Angeles County; a lawsuit is pending against the airline, of course. Adding to that setback in public relations, reïntroducing the infamous 737MAX encountered another potential defect in the operation of the engines. Meanwhile, its financial victim, Bombardier, announced that it may withdraw entirely from its deal with Airbus, having suffered huge losses as a consequence of the dirty trick by Boeing conniving with the American federal bureaucracy. Sympathy for Boeing? There has to be a better way than American-style mercantilism. There is. Read on.
Have no sympathy for Boeing. For its investors? Up to you.
Consider, did those investors complain when the American company, Boeing, deprived the Canadian company, Bombardier, of the fruits of its C-series airliners after years of development and testing and superlative aircraft they are — now in the hands of Airbus for nothing. How did Boeing manage it? Via lawyers! Boeing lodged a fraudulent complaint to the corrupt Washingtonian bureaucrats and initially achieved a favorable but unjust victory later reversed. Investors in Bombardier lost 60%!
Did Boeing have a competing model? No. Then, why? Oh, that’s right. Behind the scenes, it was planning to buy Embraer with its potential for competing aircraft.
The Boeing victory has been short lived. Defeat for Boeing in the form of the ill-fated 737MAX has displaced that underhanded victory. Boeing long has had the reputation for cost-cutting. The 737MAX confirms that reputation to the extreme. Instead of designing a new aircraft, it jury-rigged an existing one, relying on a dubious automatic rescuing system to save a basically unstable design. Even some engineers at Boeing had warned that the aircraft was not airworthy, one describing it as designed by “clowns, in turn, supervised by monkeys”.
“Would you fly on it?” asked one of another.
“No!”
“Neither would I.”
The just plight of Boeing now is a plight for these entire United States of America. It represents the consequence of allowing monopoly and mercantilism in civilian aviation underpinned by lucrative contracts in military aviation.
Yesteryear, there were others in civilian aviation. Remember Douglas? There were others such as Convair, Fairchild, Ford, Lockheed, and Martin. Today, only one — Boeing. Yes, it’s complex; still no excuse. To begin, Lockheed and Martin learned that sharing the lucre in the public, military context is a lot easier than competing in the private, civilian sector. Had Boeing competition for civilian airliners other than the European Airbus, would it have cut corners so blatantly and cavalierly?
Socialistic critics of the current, American, economic system characterize it as capitalistic. It isn’t. It’s a mercantilistic welfare-state for both individuals and Big Business.
What is mercantilism? It is an economic system dating back to feudal times whereby the governing agency regulates the economy via the establishment and maintenance of trading monopolies — monopolies such as Boeing.
A mercantilistic welfare state for Big Business? Yes! Example? The Export-Import Bank, recently given new life by politicians at the urging of lobbyists and at the expense of taxpayers.
Excerpt from the call-to-action novel, Retribution Fever:
Established in 1934 by Executive Order, the Export–Import Bank of the United States is a lending agency of the federal government. In 1945 by act of Congress, it became an independent agency within the Executive Branch. The bank operates as a governmental corporation. It finances and ensures foreign purchases of American goods. Conceived as an aid for Small Business, it has become a tool of Big Business.
So, by what means did Boeing become the mercantilistic monopoly that it has? Financial finagling called mergers and acquisitions funded partially the military-industrial complex. With unlimited, financial and political support guaranteed by Big Government, the formula is a winner.
Excerpt from Retribution Fever:
With regard to issues of antitrust, particularly mergers and acquisitions (M&A), the federal government has a legitimate interest in protecting interstate commerce from illegitimate obstruction. Moreover, it is a legitimate function of the federal government to promote just and fair, interstate competition.
Sometimes, mergers and acquisitions reflect capitalism at its best. Sometimes not.
Large companies with huge financial resources devouring small companies with limited financial resources, especially by extortion of one means or another, represents more mercantilism than capitalism — mercantilism, the practice against which Adam Smith wrote his Wealth of Nations.
A provision enshrined in the revised Constitution will provide that no enterprise engaged in interstate commerce and controlling in excess of thirty percent of any class of commerce or part thereof will merge with or acquire any other company in its class. The term, class, refers to generally recognized commercial categories such as industrials, transportation, utilities, and medical care. The exception is for purposes of direct national security involving military activities. Such limitation is in keeping with previous policies; for example, limiting any single banking group to no more than ten percent of total banking deposits nationally.
So, the policy allows for an exception, citing national security; thereby, giving the mercantilists of the military-industrial complex an out? Not necessarily.
The default-position is the limitation on M&A as stated, even for military purposes. The policy protects a robust, capitalistic system of military-industrial procurement from the private sector by demanding that any merger or acquisition of one company by another of commanding power must prove that such a merger or acquisition offers the only means available to protect the nation. Employing Biobehavioral Science, it represents that which is called proper “contingency-management”. Let us suffer no more 737MAXs.
Will the 737MAX fly again? It must. Ask the powers-that-be.