The conservative movement has changed a lot over the past 8 years. Some of that is trying to create an intellectual movement that supports Trumpism in hopes of preserving the coalition that supported Trump into office in 2016, in a future without Trump as standard bearer. And some if it comes from a desire to walk away from ‘free markets and individual liberty’ as its sine qua non because that hasn’t achieved conservative ends. Instead there’s a desire to use government to impose preferred outcomes.
As part of the project justifying government intervention, when their preferred people are in charge, the Heritage Foundation has a new report arguing that free enterprise exists ‘to support the common good.’ And it’s was ratio’d on twitter by former staff members, by conservatives, and by anyone who sees it as an abandonment of that institution’s former principles.
But Heritage is hardly alone. ‘National conservative’ think thank American Compass has a new report arguing that industrial policy is good because Europe created Airbus and therefore governments can identify strategic industries and subsidize them.
A consortium of European governments founded Airbus as a direct response to American dominance, to compete with Boeing and ensure Europe had its own robust aviation ecosystem. Detractors dismissed Airbus as “just another European jobs program.”2 According to free-market dogma, such industrial planning, executed under public control, subject to political disputes, and undisciplined by profit-seeking investors, was sure to fail.
Instead, Airbus caught up and surpassed Boeing as the world’s leading aircraft manufacturer, gaining a reputation for cutting-edge innovation from fly-by-wire controls to composite materials. Boeing, for its part, descended into financialization and outsourcing, disgorging capital to shareholders while lagging in R&D investment, which led ultimately to embarrassing production delays and catastrophic crashes that grounded large portions of its fleet.
And wow, this piece is disingenuous.
- The whole point is to juxtapose Boeing as representing ‘the free market approach’ and Airbus representing the ‘industrial policy approach’ but I don’t know anyone who would describe Boeing as a paragon of the free market, independent of government? They moved their headquarters to Chicago for tax subsidies and now to the DC area not just for subsidies but because their future is reliant on federal regulators and appropriators.
- And it seems like a straw man to attack the idea that billions in subsidies could create a viable company in Airbus which could capture market share? It has often lost money, for instance in 2019 it reported a €1.36 billion net loss – resulting from a €3.6 billion fine for bribing companies to purchase their products. (Does American Compass recommend repealing the Foreign Corrupt Practices Act, too?)
- And yet the Chinese and Russians have been trying and failing to follow this same path with aircraft manufacturing!
The report compares commercial aircraft deliveries in 2022, painting Boeing in the worst possible light. But this isn’t a ‘study’ of Airbus, it’s a propaganda piece.
The truth is that Airbus has developed a very good narrowbody commercial aircraft in the Airbus A320 series. And it has innovated with it far better than Boeing has theirs. But Boeing still makes better widebody planes (quibble all you want with the 787, but it’s a better market fit for most use cases than the A350). The most ambitious Airbus effort, the A380, was a financial disaster.
Airbus A350
Airbus A380
Boeing has become a cronyist company detached from the great engineering of its past. It tried to shave costs on the 737 refresh product, which wound up costing it more with the MAX grounding (along with changes to the aircraft and its training). It abandoned the ‘middle market’ and didn’t develop a replacement for the Boeing 757 which it no longer produces, while Airbus is having success selling the A321XLR (though it hasn’t yet certified and delivered the plane).
And, as with Boeing, the sale of aircraft is a geopolitical game where purchase decisions are often made for non-economic decisions. Boeing orders by foreign government airlines are frequently made from the White House with the President in attendance. Similarly, European flag carriers go out of their way to order Airbus planes and the EU encourages other nations to order Airbus as well.
What exactly is supposed to be the broadly applicable lesson here, that industries where large purchases are made by state corporations, politics plays a role in orders, and creating a subsidized business to go after government-led aircraft orders can ‘work’ in the sense of offering an iffy return on capital?
Meanwhile this paper sure says silly stuff, “Boeing worked to escape the confines of American labor law, Airbus worked within European labor law…” Because Boeing opened a factory in South Carolina, while Airbus opened one in… Alabama?
Boeing is certainly subsidized, by the Import-Export Bank and by military contracts. Airbus is subsidized. So are Comac and Rostec. But when you see arguments that the U.S. ought to model Europe and Airbus in its own economy, that’s not really an argument about Airbus or Boeing it’s an argument by former conservatives who want to use the tools of government towards their own end, so are putting out content to give their switch greater intellectual grounding. Many in the Republican Party have abandoned their traditional principles in a quest to exercise power.
Ultimately American Compass is extrapolating from one specific case (Airbus) to some general idea about the role of government in business. Airbus is not a great case, but it’s also a very specific one.
Do we want to copy European economies? 30 years ago Italy and the U.S. had similar per capita income. Now the U.S. is twice as wealthy as Italy in these terms. I wrote this from Paris, and the continent isn’t as wealthy as the U.S. is and that is reflected in the daily lives of people – the homes they live in, their access to heating and air conditioning and appliances and groceries. Is that what we’re supposed to be modeling? Keeping Americans poor out of some sense of solidarity, handing control over the economy to bureaucrats and succeeding in business based on your ability to please them?
Are you in Paris right now, Gary? I’m reading from my suite at the PH Vendome!
@Dan – I wrote this in a suite at Park Hyatt Vendome but am no longer there…!
Too bad! A great read regardless. American conservatism has lost its way. It’s gone from something I disagreed with but could engage in good faith to a nasty movement rooted in demagoguery and grievance. Truly gross.
Amen, Dan. There is no human decency in the conservative movement any longer, and it is a complete disgrace for any American to identify as a conservative or a Republican for any reason. Twenty years ago, for a short period the equivocal label of “Socially liberal, fiscally conservative” was accepted reluctantly. Now, we know fiscal conservatism is a direct cause of exactly the social ills that liberals seek to address.
There’s gross generalization in here. Income per capita is a mathematical average, a single number, which ignores the distribution of wealth (read: inequality) that conservative policies in America have exacerbated over the last half century. Sure, the middle class in a mathematical sense is better off in the USA than in the EU. Except there is a shrinking sliver of the American population left in the middle class. Everybody is dirt poor and unable to afford basic healthcare–or they have reaped the benefits of ZIRP in outrageous equity returns. (The working class does not invest in equities.) If you’re poor in Europe the social safety net is so much stronger, not just in healthcare but education and transportation infrastructure. Sure you have to give up air conditioning in your home. Would you rather have to tough it out with a ceiling fan, or would you rather die slowly from all manners of ailments because dumbshit conservatives believe single payer healthcare is socialism?
It’s better to be filthy rich in America than in Europe, but only because then you can afford to travel to Europe when you’re done being greedy in America’s exploitative capitalist economy.
As an Asian American who grew up in 1980s and fully embraced capitalism and free market economy; I fully see the change in conservatives. Now the conservatives seems to be preserve American Supremacy that I see is only delaying the inevitable. In 1980s all market capitalism was good unless they were Japanese, and now the Chinese is getting the the heat. The American Hawks never seems to run out of enemies, Soviets, Japanese, Islamic extremism, and now Chinese. Future does not look too good. I always think free market should be determines the future, but the conservatives believes the government can solve their problems too! Is that contradiction to what Ronald Reagan said, almost their Messiah. They think Donald Dump is the RR apostle?
This whole dissertation is a straw man by conflating and creating an idea of mainstream conservatism that doesn’t exist. The average Conservative does not talk about manufacturing subsidies when parents who complain at school board meetings are labelled as dangerous by the federal government, teachers groom elementary school children by pushing gender ideology, we don’t have school choice, inflation is biting our pockets, higher taxes never help us, and the usual suspects run wild in cities and suburbs.
The average Conservative increasingly sees the old model of neo “conservatism” as a fraud that allows the elites to maintain power at the expense of actual conservatives. We realize that foreign wars have nothing to do with freedom which we don’t have in the first place and everything to do with keeping the elites in power and siphon money. We see the U.S. hasn’t been a free market for 150 years with the government picking winners and losers through selective enforcement of arbitrary regulations which is why it’s ridiculous to criticize China when the U.S. government is no better. We are disgusted by rinos and neo cons who talk about the military to disguise that they support illegal immigration so cheap labor can be exploited by them at the expense of actual Americans. We are also disgusted by corporate managers who have adopted woke ideology to appeal to a twisted minority at the expense of normal Americans who are White, Christian, and not 88 genders.
Whether the EU subsidizes Airbus or etc is very irrelevant in the larger scheme of things and is only a talking point of those who want to distract us from actual issues. The only Boeing topic that comes up for discussion among Conservatives is how unions kill manufacturing and force companies to move out of these Blue states into right to work states or foreign countries. Any choice between a Boeing or Airbus model is academic as we don’t support the existence of the system which makes that decision.
You want Conservatives to go back to being puppets for the elite which is what traditional “conservatism” has done for 100 years. The turn to Populism scares you because you Conservatives no longer celebrate things which hurt them and things which keep the elites in power.
“You want Conservatives to go back to being puppets”
After reading @John Dogas’ post, I know who the puppet is.
Yep, that’s the problem, right here. Naked racism/supremacy, Bible-thumping, LGBTQ-phobia.
But let me first address the sheer ignorance. Have you ever thought about why corporations “appeal” to anyone? Corporations want to make money. Who has money and is willing to spend it? Hmmm, how come conservative white Christian cisgender men and women don’t have money to spend? Could it be clinging to bigotry and failing to recognize the science and data that show that diversity improves business outcomes? CWCCMW (conservative, white, Christian, cisgender men and women) are shoehorned into an aging demographic with dwindling net worths. You cannot sustain a prosperous country with that kind of demographic as your standard of “normalcy.”
“Normal Americans” are not white Christians. Let me set aside the religious part for a moment. There’s a lot of white people in America but it’s becoming the minority as the country will soon become majority-minority. In fact, in our most global cities–the ones relevant to international business and tourism–the White demographic is well under 50%.
Recent surveys show that Christianity is actually bouncing back from a decades-long decline in adherents. Sociologists hypothesize that mass isolation at the height of the pandemic pushed people to search for more meaning, and for some people, that was religion. It’s okay to be religious per se, but a lot of the bigotry and ignorance in America is rooted in religion. Systemically racist, bigoted policies are flouted openly by our representatives in government citing putative “Judeo-Christian” values. And we’re supposed to be a country of separation of church and state.
One bright spot in the recent rise in religion: the latest Gen Z converts are disavowing the parts traditionally used to justify homophobia, misogyny, and all kinds of social ills. So the Christianity of the future is not like the Christianity of the past.
F**k you, John Dogas.
Just wait till these conservatives see pictures of Airbuses in LGBTQ decals. Before retiring A320s Alaska Air had an A320 with pride decals. And doesn’t Qantas also have an A330 with Pride decals?
Gary – first picture is not a 787-8 as labeled. It is an Airbus – I think A330-900.
Just fly a 777 and an A350 back-to-back and you know why Airbus is better. Even more striking is going from a 787 to an A350.
Boeing doesn’t care about passengers.
Thank you, John. Sorry you have to deal with abuse but no surprise coming out of anyone located in or near SFO. It’s crazy how SFO is so beautiful, but that beauty did not translate to the cold blooded hearts of the many residents who live there. RIP to a once wonderful city and overall to California, too.
I won’t be holding my breath waiting for the article about how the Democrats have become corporate lapdogs while still claiming to represent the little guy.
Mark has sharp eyes. However it is not a 330-900, it is an Airbus 350-900. You can just make out the “-900” part in the photo. Maybe Mark did a typo and meant “350”? 🙂
True conservatives find government monopolies like Airbus repugnant. The article failed to mention Airbis continues to operate at a loss. If they sold aircraft at cost, their planes would be far more expensive than Boeing.
Boeing receives some work under government contract but the majority of their business is free market.
The real threat to.both companies is China.
The PRC have stolen all the major technology from Airbus and Boeing necessary to scale production of aircraft that are near clones of Boeing and Airbus designs.
Without the R&D expenses borne by their western counterparts, Chinese aircraft manufacturers will enjoy a huge cost advantage.
Jake – curious as to what you’d consider differences between 787 and A350 from the passenger perspective – that aren’t airline choices for furnishings. A350 copied much of Boeing’s 787 innovations.
The 777 is a 15-20 year older design.
“There is no human decency in the conservative movement any longer, and it is a complete disgrace for any American to identify as a conservative or a Republican for any reason. Twenty years ago, for a short period the equivocal label of “Socially liberal, fiscally conservative” was accepted reluctantly. Now, we know fiscal conservatism is a direct cause of exactly the social ills that liberals seek to address.”
so tolerant and inclusive
‘Do we want to copy European economies? 30 years ago Italy and the U.S. had similar per capita income. Now the U.S. is twice as wealthy as Italy in these terms. I wrote this from Paris, and the continent isn’t as wealthy as the U.S. is and that is reflected in the daily lives of people – the homes they live in, their access to heating and air conditioning and appliances and groceries. Is that what we’re supposed to be modeling?”\
Generally, this is true – although as others pointed out if you’re middle class in Europe you save so much more on transport, education, healthcare etc.
However having lived in Australia 20 years, the US 10 years and now Europe 3 years – I ca tell you Americans are very poor in one area: time. That wealth comes at a cost and that is time. Americans get 2 weeks holiday year – 1 of which they spend in Disney and the other Europe. Europeans get 6 weeks.
When you are 70 or 80 and looking back, Europe with 30% less pay but 300% more time to enjoy life looks appealing. It’s sure why I moved here.
It all sounds like pretty deep thoughts. I consider myself a conservative American. I support our Constitutional rights to own weapons, free speech, and so forth. So I’ll keep it simple. I prefer Boeing aircraft over Airbus because they just seem nicer to fly in as a passenger. The overhead bins don’t rattle as much as on the A319/20/21’s for example. I hate thin Recaro type seats but that’s on the airlines that order them. I hate the lack of pitch/leg room but again that is on the airlines. I prefer Ford and Lexus over Chevy and Nissan but it’s an interior comfort thing for me. I drink Miller Light before I would Bud Light because Bud bothers my stomach sometimes. I enjoy a 77W more than I do an A330 but if I could go back to flying MD-80’s or 767’s I’d pick those because they are comfortable for most configurations.
@ UA GS @ SFO
People like you live in an echo chamber.
People who use the trem “cis gender” are out of touch with reality and the majority.
The lefts entire ideology is based on emotion and grievance politics.
The funny thing people like you can’t wait till “white people” go extinct because you think that non whites will embrace the lgbt lunacy when in fact the non whites are firmly against that degeneracy.
Gen z also have the lost average IQ of any generation to date.
UA GS @ SFO
America has the best healthcare in the world much better than the uk and Canada people from those countries come to the us to enjoy our system. The amount of Americans that have insurance is in the high 90s. Our system is the best and we need to keep as is.
Lefties like you are a fifth column in this country and the funny thing is you’re all childless people dying off and being replaced.
Some might argue that conservatism hasn’t changed at all; it just shed the window dressing.
@ Gary
Both in your synopsis and the original cited article there appears to be only passing mention of the political realities of the era when airbus was formed (late 60s) and key aircraft were launched (I recall (as a youngster) the Airbus A300B at Farnborough in 1974 after its launch in 1972 and the competition from the Lockheed L1011 (I was on board the air show’s demonstration flight) and the trials and tribulations of the development of the Rolls Royce RB211 engines).
Post hoc rewriting of historical context and conflation of political diatribes across decades could be unfortunate?
@ Chad
“The amount of Americans that have insurance is in the high 90s.”
Not according to the readily available data. Incidentally, the proportion of insured Americans improved under Obamacare and went backwards under tRump. You live in a fantasy world.
The scent of sad and broken dem’s is strong..
I strongly agree American conservatism has lost its way. This is an excellent take.
I mean, how can you not support cutting the breasts off teenage girls? That’s obviously the right and just thing to do and it’s TOTALLY not pushed by sick pedophiles.
No, until American conservatives get on board with hating white people, can they even be called conservatives?
@ Chad
America has among the best heathcare in the world if you are very rich.
Very rich people go to whatever country has the best healthcare for their condition, which is often the US, but might be France, Switzerland, or other countries with great healthcare.
FIFY