Nobel Freakonomics, Part II: A Tale of Two Terminals

WASHINGTON — House Democrats on Tuesday unveiled sweeping health-care legislation that would hit all but the smallest businesses with a penalty equal to 8% of payroll if they fail to provide health insurance to workers.

The House bill, which also would impose new taxes on the wealthy estimated to bring in more than $544 billion over a decade, came as lawmakers in the Senate raced against a self-imposed deadline of this week to introduce a bill in time for action this summer….

Mr. Obama said Monday that he is buoyed by progress on health legislation — which House Democratic leaders intend to move to the floor later this month — but made clear that he knows a tough road lies ahead. “I’ve got no illusions that it’s going to be easy to get over the finish line,” he said.

—The Wall Street Journal

There is a short-term parking lot at JFK that I never use if I don’t have to.

It is the parking lot at Terminal 4, which happens to be home to Virgin Atlantic and other, less familiar, international airlines, such as Taca International (with flights to and from San Salvador), for example, LOT (flights to and from Warsaw), and Jordanian Airlines, with flights between Amman and JFK.

Passengers emerge from the gates at Terminal 4 groggy and glazed-eyed, for they have made long, time zone-crossing flights from exotic capitals around the world, often with kids in tow and frequently with what seem to be their life’s belongings. They wander around the concourse, often with cell phones clamped to their ears, either looking for the family or friends meant to meet them in the sudden chaos of New York City, or else trying to find their way to the right car, or bus, or subway line.

It’s what helps makes New York, well, New York.

Besides being a kind of United Nations in miniature—only less blatantly corrupt, and far more productive than the real thing—Terminal 4 happens to be the only non-airline, privately-operated terminal at JFK.

Full of airy spaces and dozens of shops, Terminal 4 is, as it is advertised to be, “one of the most modern, efficient, spacious and unique terminals in the New York area,” and “A Model for 21st Century Air Travel.”

A model, that is, until you try to leave the joint.

It is then, as those groggy, glazed travelers leave the air-conditioned confines of the Terminal and approach the passenger pick-up area on the road, that things get less “modern, efficient, spacious and unique.” A sea of cars, vans, window-blackened stretch limos and beat-up Honda Civics cruise slowly along, looking for spaces that may or may not open up, as well as whoever it is they’re supposed to pick up, while keeping a cynical eye out for the airport traffic cops of the Port Authority of New York and New Jersey—for it is the Port Authority of Etcetera, Etcetera which unfortunately operates the outside of Terminal 4.

And with the government involved, things get less modern and efficient. The traffic cops of the Port Authority of Etcetera, Etcetera appear and disappear and reappear at odd moments, with no regularity. Their sole job seems to be to chase away cars on the theory that drivers who need to wait for short periods of time should park in the short-term parking lot at Terminal 4.

And since nobody in their right mind wants to park in the short-term parking lot at Terminal 4, it is an endless cycle of traffics cops suddenly appearing to chase away cars, until they disappear. Then the cars return after circling the airport, until the traffic cops reappear, and it starts all over again.

Now, the reason nobody in their right mind wants to park in the short-term parking lot at Terminal 4 is because the short-term parking lot at Terminal 4 is even less efficient than the disappearing/reappearing traffic cop routine.

This is not for lack of parking spaces—the parking lot itself has plenty of spaces. And it is not for lack of toll booths for leaving the parking lot—there are nine.

The problem is in the management of those toll booths.

Apparently, the State Senator whose brother-in-law skims the toll booth take at Terminal 4 needs to employ as many relatives of the guy at the Port Authority of Etcetera, Etcetera who gave him the contract as possible, in order to keep the contract. How else to explain why each one of those nine toll booths takes E-Z-Pass, or credit cards, or cash…which means that each toll booth must be staffed, or else no cars can go through? Of course, because of this ridiculously inefficient layout, each lane can get blocked if somebody forgot their wallet, or didn’t bring enough cash, or lost their ticket, or didn’t bring the E-Z-Pass…which seems to happens every time more than one car is waiting in line.

Now, this would not necessarily be a huge problem, except the State Senator whose brother-in-law skims the toll booth take at Terminal 4 also employs somebody to do meaningless tasks—like wash the toll booth windows while everybody is stuck in line—because apparently it is terribly important that the windows of the toll booths be cleaned…really slowly…while the cars wait for the toll booth lanes to become unblocked. And this only serves to mock the drivers of the cars blocked at the toll booths, until all the drivers stuck in line want to shoot somebody. Now, fortunately for other flyers at JFK, that same State Senator of Terminal 4 fame does not have the parking contract for JFK’s Terminal 7.

Terminal 7, which is a mere few hundred yards across the tarmac from Terminal 4, is the sparkling home of British Air. It has a youthful, business-like demeanor—entirely international but not so much of the United Nations as maybe of Davos in its prime.

Terminal 7 has no such crowded, mindless, endless traffic looping, as does Terminal 4, for the simple reason that Terminal 7 has a great short-term parking lot. Easy in, easy out—with a credit card lane, and an E-Z-Pass lane; and they both work. There never seems to be a line. You can park, go inside the terminal and meet an arriving passenger, then leave the parking lot without feeling trapped and wanting to shoot somebody.

Now, you might think somebody would get with the program. But you’re dealing with the Government. Specifically, you’re dealing with the Port Authority of Etcetera, Etcetera. More specifically, you’re dealing with that powerful State Senator’s brother-in-law who skims the parking lot concession at Terminal 4.

All of which is to raise the question: why the rush with healthcare reform?

Why the “self-imposed deadline” to pass a bill to regulate the most complex manifestation of government involvement in human commerce, in a couple of weeks?

Will a government that can’t manage a simple toll booth at a parking lot be able to figure out how best to provide affordable healthcare coverage to all Americans—let alone those new Americans arriving daily at Terminal 4 at JFK—in a couple of weeks?

Is the point here to pass regulations in a particular period of time, for a short-term political gain, or is it to craft a healthcare system that actually functions well in 5 and 10 and 20 years?

And, along those lines, where’s the analysis behind the regulations?

Talking heads and Nobel economists talk up healthcare systems in Canada, the UK, and France as if every retiree in those countries is rosy-cheeked and doing one-handed pushups while they wait in line for their pension checks.

Where’s the data?

Bush’s Part D didn’t work: why will Obama’s fix work any better?

In the meantime, if you think health care is best managed by the government—well, then go ahead and park in Terminal 4.

And try to get out.

Jeff Matthews I Am Not Making This Up © 2009 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will be ignored. This content is intended solely for the entertainment of the reader, and the author.