Common Cents

Promissory Sunset Clause

Ralph Murphy

(7/17) Business as usual on Capitol Hill appears to have taken on new features as systemic understandings of budget concerns are redrawn. Simple scrutiny of contractor overcharges led to a provision decrease of over 2 trillion dollars now retained by earners for their, not government, discretionary spending. In a mad scramble to fill the gap varied awkward proposals have been passed or proposed to maintain the suspect programs at home and abroad. The CARES ACT signed into law last Spring was almost the exact sum lost to auditors in the past year at 2.2 trillion dollars. It lacked the tax procurement measure, however, and its promised program funding seemed deemed illegal or unnecessary to overt review and couldn’t be enforced.

Of the total amount promised 500 billion was slated for large business aid, and about 113 billion of that presumed specific to the airline industry if it complied with varied policy commitments. It’s a unique industry combing extensive government support linked to infrastructure, subsidy programs even ownership as well as private sector market signals used as a reference plain in pricing departure points now tied to that management and bill. The industry post gyrations or intervention seems to settle at just over 9 billion dollars if funding inference stands uncorrected. The overcharge itself was the circa 104 billion dollars in recent years combing host and foreign production and traveler markets to the official oversight, theft, felonious largesse whatever the readers interpretation best suited for that cost regime.

There are other issues to include participation levels in nationalization programs to accommodative hosts. Some have strong control features others aren’t involved in the private sector interests. The harmony is rare but again in that type social order the plane industry would probably be a superimposed anomaly available to a relatively advanced or externally trained elite. They’d also be the likely compliant point of trade contact, but can cause problems if other issues linked to domestic programs impact it. Nationalization versus privatization and then political objectives linked to culture or market forces strongly impact the programs.

The travel industry was very hard hit by the immediate lack of tax linked subsidy overcharge denied by overcharge reviews, and appeared to either have launched an internal strike with curtailed flights claiming coronavirus concerns or seating level restrictions to reduce costs. Last spring air travel by the major carriers was decreased by 80% or even higher at varied stages as the cartel realigned. Voluntary retirement, mandatory furloughs and other cost cutting measures as decreased wages have exposed gross systemic imbalances of the coerced overcharges associated with the subsidy gap. Ghost systems, markets and employee lists that had been funded were no longer possible in the current cost reviews.

Some background to the airline industry might be useful at this point as they are inelastic business and vacation linked markets of basic need that will surely be used for the foreseeable future. In December, 1944 a group of civil authorities met in Chicago at what became known as the Chicago Conference to establish rules and regulations for cross border or international travel linked to the emergent plane industry. The group sought to standardize aspects of contention or friction such as physical plane features. licensing, landing rights, or unit measures associated with travel. They launched the whole program as the International Civil Aviation Organization or ICAO and its price fixing component, a provision they openly admitted was cartel used or employed and to be called the International Air Transport Association or IATA. It was destined to be a Montreal, Canada based component organ of the United Nations . It set pricing, hiring and varied regulatory standards for the emergent world travelers cartel initially with 31 member nations or signatories who surrendered much of their host territory control to that group for inclusion and access in the strongly emergent industry.

There are two types of program reviews from a market perspective linked to aviation but also involving an awkward governing fund or regulation regimen as it could easily be entirely private sector at far lower cost and likely higher efficiency than the current mix of public and private objectives. The production for commercial planes was heavily subsidized, and dominated by Boeing corporation to domestic programs though it also was a strong defense contractor to associated flight programs. That industry was relatively complex and required mostly private sector market signals and vast linkages to the support groups with costly fixed capital available to few aspiring producers. It fed a relatively simple travel industry that as a high profile and basic want or service need could be manipulated by the varied travel groups as brokered by IATA. That seems the bulk of that 100 plus billion dollar overcharge in program fees or reference billing promised by former budgets. Industry is strongly involved as well but both the plane producers and travel groups seem to merge at that approximately 9 billion for foreign and domestic operations.

Recent German Bundestag legislation proposed buying a 20% share stake in Lufthansa the national carrier with referral to a a nine billion dollar equity claim. Airbus operations rival Boeing to that and other markets in the only real pole opposition to commercial facility. Japan could produce the planes but seems politically dissuaded likely by IATA cartel type interests. The planes themselves can last 30 years if maintained and major producers seem to almost give them to developing nations in an effort to establish markets. At that point however the cartel does gain landing and even political influence of varied impact depending on its relations with its host. It can prove a major power broker affecting trade, other travel and relations.

By 1997 the ICAO or United Nations component seems to have yielded much of its control authority to a tripartite plane alliance group headquartered in New York City, Amsterdam and Frankfurt, Germany. Star Alliance, Oneworld, and Sky Team controlled most all the major carriers landing or regulatory programs in varied commercial bundles with no real national identifiable variance as for example American carrier American Airlines is in Oneworld but Delta with Aeroflot in Sky Team. The three coordinate to serve 192 nations but profits and linked programs do still seem to merge at that 9 or 10 billion with most all the carriers referring to it as their expected earnings in a pooled concept of access or control that might have to be further explained as if they all want to access it they’ll likely be almost ponzi scared or disappointed.

Major carriers from United airlines to American or Lufthansa abroad or All Nippon Airways to Japan again merge at the IATA reference cartel. They all quote expected profit at about 1.2 billion dollars in a depressed market if they go along with seating capacity limits or pricing arrangements. The cartel was to precedent able to finagle the tax or bank fund link that established the 100 billion overcharge. In recent years the auditors said in effect they wouldn’t pay it. That leaves a frustrated travel and even producer group that will have to settle in market value and that seems the 9 or 10 billion that had been used by the cartel as a simple point of reference in overcharge. The taxpayer can now spend it not the Chicago group.

Given the complexity and cost of the production group and cartel restrictions IATA appendages curtailed technological advancements affecting speed of travel, capacity and access. Producers had a near monopoly on plane provision. The major carriers are listed on Nasdaq commodity or stock exchange which to precedent was Chicago controlled and isolated in price rigging schemes on a Chicago Mercantile Exchange which briefly started setting prices for most all goods when it stormed New York and accessed futures markets. Domestic producer Boeing is common listed on NYSE that seems standard fair to foreign producers as well. The travel industry is again a cartel , producers closer to investment banks. Specific to the travel industry it traded seats and profits as the cartel passenger guarantee consistent with a predictable function. Pricing could be erratic but the reference plain remained it seems that 9 billion divided by world travel programs.

The programs themselves were awkwardly politicized. A breakdown of the American Department of Transportation showed a budget allotment of over 70 billion dollars for the poorly tracked and limited needs. The Federal Aviation Agency or FAA allotment was over 21 billion dollars, the rest financed road or rail projects many completed years ago to varied programs pending accounting reviews. That 70 billion seems to have funded domestic programs and those abroad and was paralleled by German project money but notably Japanese to similar poorly tracked export money funneled through international banks like the Asia Develolmeng Bank or its export agency JCIA. Japan to one example paid almost 90 % of the Philippines Department of Transportation through those project sourcing. It involved their host contractors but remained costly as brokered. The American project money is less clear but its import export bank mirrors the JCIA for that type program funding.

Foreign receivers can self style and claim regulatory or production proficiency but it was gifts from the more advanced systems and does few a service to claim their competence in that complex field as they’ll remain in control with limited chance of social advancement if we " play along. While understandable to establish an otherwise difficult or impossible market, there are always be external control influence to the receiver as again few nations currently have the technological facility to compete in the field. It does however become usurped by the very simple commodity type cartel mentality of that IATA group. It’s a rare market in that sense, usually there’s relative harmony in complexity but that one is intricate in provision though administration again quite crude.

What the industry has to understand amid the seating obligation and furlough conformity is that the 500 billion dollars in CARES Act funding is closer linked to gross historic overcharge and Congress has been denied procurement capacity in a tax bill to redstablsh the theft regimen or 100 billion gap we used to have to pay. I don’t know whose doing it but from press reports any number of funding irregularities could have been acted on but aren’t paid. That settles the group at the 9 or 10 billion associated with actual worth of the field. It appears to combine production and travel industries but will best go forward unshackled by IATA or the trade alliance groups settling on profit motive for optimal output. I doubt costs or profit will settle far from that reference money but industry representatives foreign and domestic might want to mentally detach from combined ownership concepts to the whole 9 billion let alone the 113 as they will retain only their consumer backed worth.