Another study in rot

Breton told the Financial Times (October 4) that “In Airbus and EADS we have European companies that are really a European success…There is no question. We will defend this model.” Now, there’s something in the back of my head that vaguely bothers me about that state-ment…what could it be? Oh yeah: Why the hell would a successful model need defending?

Let’s back up. Airbus was created when European governments orchestrated their economies, creating new national and continental champions as per politicians’ whims. But as far as industrial policy goes, Airbus was a no-brainer: The jetliner industry offers guaranteed growth rates and extremely high barriers to entry. Take some legacy industrial assets, insert government cash, find some talented sales people like John Leahy, and watch it go. Every other European industrial scheme—shipbuilding, cars, Concorde, Minitel terminals—obliterated value. Airbus was the only state-supported success. Unfortunately, Europe’s politicians forgot a crucial fact: Airbus succeeded despite government industrial policy, not because of it. In fact, this government interference has created some serious trouble.

And so it goes: Throw stolen funds (taxes) at it, it
eats itself.

See it all.