- The Washington Times - Sunday, October 28, 2001

Time magazine, trying to lighten the mood a bit, recently asked some advertising agencies to come up with mock ads encouraging Americans to start flying again. My favorite features a photo of a tray of airline food with the message: "Come on, you know you miss it."

Not everyone may see the humor. Take, for example, the Texas-based Sky Chefs, an airline-catering company that was shut down for four days after the terrorist attacks and then saw carriers eliminate food on many flights. "Right now, our revenue is down 30 to 40 percent, and it's too soon to tell when we might recover," says chief executive Randall Boyd.

He shouldn't hold his breath. United Airlines announced this week that it's getting rid of food for economy-class passengers on flights of 3 hours and 45 minutes or less. American says it will stop providing meals on all but its longest domestic flights. Other airlines are also scrapping food service.

So Sky Chefs has been forced to announce layoffs and to seek financial help from the federal government, in the form of $50 million in cash and $200 million in loan guarantees. I know what you're thinking: If Sky Chefs gets no help, airline meals may disappear and what's the downside of that? But the truth is, they'll probably disappear even if Sky Chefs does get help.

That doesn't prevent the request from being taken seriously in Washington. Rep. Ray LaHood, Illinois Republican, a member of the House Appropriations Committee, expresses sympathy for the company's plight. "We've finished the debate over whether we should help businesses," he told the Associated Press. "The only question is how much further we should go." Not whether we should go further just how much.

Unfortunately, the world has changed since Sept. 11, and pretending otherwise accomplishes nothing. If the demand for its products has vanished, there is no reason to keep Sky Chefs on life support. And if the demand for its products revives, either Sky Chefs or some other business will rush to supply them. So federal intervention is unwarranted.

But the same logic applied to the airlines, and no one wanted to hear it. If many people don't want to fly anymore, federal aid won't change their minds, and the money will be wasted. And if business returns to normal, federal aid should not be necessary, in which case the money will also be wasted.

In the rush to help the airlines, our leaders also neglected to consider the obvious question: If Washington comes to the rescue of one set of claimants, how will it say no to all the others that will immediately plead for help?

Plenty of people can plausibly blame Mohamed Atta for their economic problems, and they think that justifies taxpayer help. Insurers want the federal government to assume some of their risks. Hotels are pushing tax changes to improve their bottom line. The AFL-CIO wants special assistance for laid-off workers.

In one 10-day period, reports The Washington Post, "one Senate office alone received pleas for financial assistance from rental car companies, travel agents, aviation maintenance companies, aircraft electricians, flights schools and aerial photographers, cartographers, and surveyors." Why do I have the feeling they won't be the last?

Other industries take a different tack. Steelmakers, demanding protection from foreign competition, argue that a strong American steel industry is critical to national security during a time of war. They think that at a time of crisis, we're better off paying high prices for steel made here than low prices for steel made someplace else.

Why on Earth would that be? It's not as though we're dependent on the Taliban for our metal supplies. We import steel from dozens of countries notably Russia, Japan, China, South Korea and Germany, all of which are firmly on our side in the war on terrorism. And there is currently a glut of worldwide steelmaking capacity, making it a buyer's market. So even if competition were to kill off some inefficient U.S. producers, we don't have to worry that we'll lack the material to make weapons or rebuild New York City.

Letting companies sink or swim on their ability to please customers and adapt to changing conditions was our general policy before Sept. 11, and it ought to remain our general policy. If terrorism has altered the consuming patterns of Americans, it makes no sense to pump money into companies that have lost customers as a result. If U.S. manufacturers can't compete with cheaper foreign suppliers, we'd be silly to keep out imports so we can all pay more.

A lot of things changed when the United States came under terrorist attack, but not the nature of financial reality. To anyone interested in sound economic policy, these bailout proposals look about as tempting as airline food.

Steve Chapman is a nationally syndicated columnist.

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