Robinhood in Reverse
By KT, Executive Editor
First do the Math
To get proper perspective, let's do a quick calculation using Silverstein Properties as an example. In April 26, 2001, Silverstein Properties entered a 99-year contract with the New York Port Authority to lease 7 World Trade Center and the Twin Towers. According to Larry Silverstein in a televised interview with Britt Hume on September 9, 2002, his company pays $10 million/month for the 10 million square feet of rentable space. Thus, has pays $1 per square foot. But for how much does Silverstein rent the space to tenants? Considering the location and presige of the buildings, we can assume, conservatively, that Silverstein collects $500/month per square foot. Offices on the higher floors would rent for much more, but if we add property taxes, insurance, and common expenses into the equation, $500/mo is a fair number. Doing the math, it can thus be estimated that Silverstein's monthly profit on the WTC is $5,000,000,000 per month! In the interview on September 9, 2002, Mr. Silverstein stated that the Federal goverment is covering his losses. Was he referring to the $10 million per month or the $5 billion per month? Whichever, part of the deductions from Joe Citizen's annual salary of 50 thousand dollars is now paying Silverstein. This isn't exactly what Robin Hood had in mind.
The Victims Pay
Until the late 1980's, it was understood in America that victims should be compensated for damages caused by willful, accidental, or negligent acts of individuals or corporate bodies. Yet a 180-degree shift has occurred during the last 15 years. Now it is the victims who must compensate the criminals. The bail-out package passed today is a strong example.
For decades, the airlines have made the same mistakes made by thousands other companies. They have had plenty of opportunity to employ and train competent security personnel, install impenetrable cockpit doors, and perfect remote control override systems. However, they have chosen to ignore the increasing aircraft tragedies and, instead, cash-out hefty profits. Now that their negligence has taken the lives of innocent Americans, it is Americans who are going to pay the monetary costs as well. The victims are paying for the negligent acts of those responsible for the damage.
Who Usually Pays for Negligence?
If I own a hunting rifle, and that recreational tool is stolen and used in a murder, current court rulings indicate that I and the gun manufacturer will likely be held partially or totally responsible for those crimes. I will have to pay the survivors. If I have a senior citizen busing service, and some buses are used during a charter to plow through a park full of people, my company will be charged with manslaughter, and myself or my insurance company will have to pay for my negligence. Thereafter, few will want to buy my services and, hence, my business will suffer. Will the federal government pay me for my inept management skills and give me money to stay in business? No. It is likely that, if a busing service is needed, a smarter businessman will buy my bankrupt company and implement the safety precautions that my customers want.
Another Real Life Example
Californians, more than any other Americans, are painfully familiar with the consequences of foolish business decisions and shortsighted planning. By coincidence, PG&E, the power company that serves nearly half of California, filed a $13.2 billion bankruptcy reorganization plan on September 21st, 2001, just hours before the Presidential Address announcing the airline bailout. The foundational causes of its financial distress are these facts:
As a result of these mistakes, Californians have had to pay enormous utility rates, many power-sensitive businesses have been destroyed, and the Silicon Valley economy that drives the GNP of America is in dire trouble. Restoring solvency to California's leading energy provider could very well kick-start the national economy. Yet, while Congress is readily giving handouts to the airlines, it refuses to bail-out PG&E. In my view, neither company should receive any tax payer support.
Using the Tax Payers to bail out Tycoons
Like any other business, the airlines have had the abundance of time, technology, and money necessary to prevent disasters such as those of September 11th. Perhaps the airline coalition chose not to implement safety and security measures because they knew the feds would prop them up if a major tragedy ever occurred. We know that, instead of investing their profits in safety and security, airlines and aircraft manufacturers opt to funnel millions of dollars into FAA pocketbooks and political campaigns (see www.aircrash.org). As they have grown richer, air travel has become more risky.
Who Should Pay?
The airplanes-cum-missiles that struck the East Coast last Tuesday have destroyed the following:
Who should pay these damages? The airlines, the aircraft manufacturers and the insurance companies for these airlines and the properties that were destroyed. Like any other business, the airlines should be held responsible for their failure to provide adequate security. The ax needs to fall upon the roots of the tree of negligence. Similarly, the insurance companies should pay on their policies, for the purpose of insurance is to cover such losses. U.S. tax payers should not have to pay these cost; nor should they pay billions of dollars to cover the losses of the extremely wealthy. Forcing Americans to do so is no different than a land-owner forcing a slave to work for his pleasure.