A Pit Of Perverse Incentives

Any government-controlled system is a pit of perverse incentives. It’s hard to get kinkier than to make failure tantamount to success. If an airplane crashes, in the US, because an air-traffic controller was napping, his bosses have cause to celebrate. Why? Because they will be rewarded with more funds to ostensibly “fix the problem,” and more staff, whether they need it or not. Failure is defined as success in a socialized system.

No wonder the FAA, and Ray LaHood, the US transportation secretary, flailed about aimlessly when a US air traffic controller was caught sleeping “while a medical flight was landing in the state of Nevada, marking the fifth lapse so far this year among controllers at American airports.” They faffed because they have no way of “diagnosing” the problem in an unaccountable system, which is not subject to the controls imposed by private property: an owner furious at the looming loss of contracts, law suits, and bankruptcy.

Show me a company in the private sector (which is not the recipient of government handouts) that is shielded from bankruptcy. An audit would reveal that most government departments, the FAA included, are insolvent, yet the fact that the taxpayer is forced to bankroll them indefinitely with tax dollars, immunizes these systems against all forms of accountability, fiscal and other.

Why do some of you want your doctor operating under the same set of incentives, where the doctor gets off scotfree for the odd slip of the scalpel; the taxpayer (you) pays.