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Re: demise of aerospace industry....



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[Topics under debate]: GOOD GOVERNANCE
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>     My response is embedded below.
>
> Charu wrote:
>
> > Actually the way it works is that the government lets boeing [or
whatever military
> > contractor] charge way more than the production cost [much more than
a fair
> > profit] and that excess ends up financing the development of
civilian aircraft
> > from which  boeing profits once again. This benefits boeing- it's
employees and
> > stock holders, and the bureaucrats involved- they end up in cushy
jobs at boeing
> > after they retire. It can be argued that this benefits the public at
large by
> > making available civilian air transport that would not have become
available
> > otherwise because of the size and risk involved in  investing that
much capital,
> > but let's be clear that this amounts to central planning for the use
of public
> > resources [tax  money]. This is NOT a free market operation, it is
massive market
> > interference.
>
>     Not if Boeing has Lockheed, Northrop, Raytheon, Airbus, etc.
chasing its tail.  Initial losses to the public are recooped in the
long-term by encouraging
> competition which will force these power-hungry organizations to
provide better and cheaper services to the public.  This would be
apparent in the coming century when
> the American Aerospace industry is poised to provide HSCT vehicles.
To bad that the Indian industry isn't mature enough or competitive
enough to take up these
> ventures.  The bureacrats are too busy serving themselves (while in
the US, the bureaucrats have encouraged competition even though they may
have served themselves in
> the beginning)!!
>
> >
> > You're assuming there will be many players to compete. Given the
current state of
> > consolidation in world aircaraft manufacturing markets, I don't see
why you would
> > expect this.
> > The  purpose of private corporations, and the matter that they are
held are
> > accountable for by their shareholders, is only to make a profit. A
government [in
> > theory!] is accountable to its citizens to execute actions for their
welfare. In
> > practice, neither governements nor the managements of large
corporations are as
> > accountable to their respective consituents as the theory would
dictate.
>
>     Ever expanding technology will also give rise to new companies
(technology is the pull while efficiency is the push, if you will).
That is, while there are forces
> that promote consolidation, there are equally opposite forces that
encourage the creation of new companies.  All the Government has to do
is stay out of the way - too
> much to ask of the GoI!!
>
>     For example, when AT&T was split up it was envisioned that it will
consolidate once again to become a "monopoly".  Wrong!  We now have
Nortel, Air Touch, Motorola,
> Lucent, Sprint, on and on.  Technology paved the way for creating many
of these new companies, especially the ones in the cellular circle.  The
"push and pull" of
> market forces is so clean and so powerful but it is totally distorted
in the Indian Economy.
>
> Sincerely,
> Vamsi M.


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