Commanding Heights: The Battle For The World Economy

BPreyer: And the Transportation Department said that this may hurt Pan Am.
And Freddie Laker testified and said, "The cause of this whole thing is Panamania." So we said, "What is that?" And he said, "Well, everybody should do everything for Pan Am." (orchestra playing) Narrator: The man who was to sweep away airline regulations is a lifelong Gilbert and Sullivan fan.
Improbably enough, the bearded poet is played by Fred Kahn, a professor at Cornell University.
Kahn wanted a leaner, meaner regulatory environment, in which the market was free to chase profits without the dead weight of bloated government.

(music builds to crescendo) Democratic President Jimmy Carter made Kahn head of the Civil Aeronautics BPoard.
Kahn had spent years studying government regulation.
Now he had a chance to do something about it.
Kahn: And when I got to the Civil Aeronautics BPoard the biggest division under me was the division of enforcement.
In effect, FBPI agents who would go around and seek out secret discounts, and then impose fines.
We would discipline them.
It was illegal to compete in price.
That means it was illegal to compete in the discounts you offer travel agents.
So we regulated travel agents' discounts Internationally, since they couldn't cut rates, they competed by having more and more sumptuous meals.
We actually regulated the size of sandwiches.
(playing solemn piece) Narrator: BPy the time Kahn had finished, the C.A.BP. had nothing left to do but close itself down.

Commanding Heights: The Battle For The World Economy - The Battle of Ideas (35 of 48)