Cato Daily Dispatch for December 21, 2001
Jerry Brito, editor, jbrito@cato.orgInsurance Industry Won't Get Federal Protection
Sept. 11 Makes Millions Change Holiday Travel Plans
Looking into Government's Massive Failure
Insurance Industry Won't Get Federal Protection
Congress abandoned efforts today to protect the insurance industry from losses in any future terrorist attacks when the Senate failed to bring a measure to the floor in the final hours of the session, according to The New York Times.
Bush administration officials, industry executives and analysts predicted that the refusal by Congress to act would prompt insurers and business lenders to increase their rates sharply as terrorism coverage was reduced or eliminated. Over time, they argue, economic harm would result.
In "Asking Uncle Sam To Share Their Risks," Senior Fellow Doug Bandow writes, "Insurance will always be available. People want subsidies to make it cheaper. But if the cost becomes prohibitive, then it would be best to abandon the activity, not subsidize it."
Sept. 11 Makes Millions Change Holiday Travel Plans
Government surveys show that about eight million adults decided not to travel during the Christmas and New Year holidays because of the Sept. 11 attacks, according to The New York Times.
About 1.4 million changed the way they planned to travel. Two-thirds of those switched to car from plane. A few switched to car from train, and a small number switched to plane from car, perhaps drawn by bargain fares.
Earlier this week, the Cato Institute hosted the policy forum "Airlines in the Aftermath and What the Government Should Do," where panelists looked at the future of an industry that was already shaky before Sept. 11. Questions answered included, Will the future see more mergers, failures, and bankruptcies? Should the federal government try to prevent those outcomes by propping up airlines with loan assistance? Would privatizing airports or air traffic control or opening the American market to foreign carriers and foreign ownership be a better way to ensure competition? Video of the event is available online.
Looking into Government's Massive Failure
With the Taliban vanquished in Afghanistan, prominent senators put the Bush administration on notice today that the time was nearing for a broad investigation of the Sept. 11 attacks and the government's failure to forecast or prevent them, according to The New York Times.
Sens. Joseph I. Lieberman (D-Conn.) and John McCain (R-Ariz.) introduced legislation to create a 14-member, bipartisan commission with subpoena power to make a full accounting.
"Determining the cause and circumstances of the terrorist attacks will ensure that those who lost their lives on this second American day of infamy did not die in vain," Mr. Lieberman said.
In a Washington Post op-ed today, Cato President Edward H. Crane takes exception with Sen. Charles Schumer (D-N.Y.) and columnist George F. Will who sang the praises of government in the wake of the terrorist attacks.
"These are curious responses to what must be one of the biggest failures of big government in American history," Crane writes. "Providing for the common defense is right up there in the preamble to the United States Constitution. The federal government, which has taken on many new tasks since that Constitution was written, failed miserably to do the task for which we count on it most. Intelligence agencies were, by most accounts, clueless about a plot carried out by dozens of foreign nationals within our borders."
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