Subsidized failure


The rule of government bureaucracy is to reward failure upward and define deviancy downward. By any rational calculation, Airbus has been a resounding failure. To be sure, it has bought market share in civilian airliners at the expense of Boeing, at a cost to European taxpayers never tabulated, but surely exceeding $20 billion and counting.

As industrial policy it has failed to come close to returning any of the European taxpayers' euros. As a venture to make Europe more cohesive, it has done the exact opposite, with recriminations regarding who is responsible for its failures ricocheting back and forth between the various national units involved in the imbroglio.

Airbus has become a symbol of European failure, disguised as a triumph, and the evasions made to avoid properly labeling it have made Europeans cynical regarding their leaders. EU rules have been twisted this way and that way to support subsidies: subsidies that have not only failed, but also helped cause a serious rift between Europe and America because of their illegal nature.

But haughty European leaders just cannot admit defeat, as shown by their never—ending fantasy that the European constitution will pass muster with their citizens.

Today we have grand pronouncements that the EU will simultaneously attempt to resurrect that aero—dinosaur of yesteryear—the Concorde (a failure from day one and last year finally put out of its misery) and create giant satellites 
meant to weaken its arch nemesis, Boeing (and America). In any normal market, failure would lead to disinvestment and redirection of cash flows. In the EU sinkhole it leads to a doubling up of the ante.

Ed Lasky   6 16 05