Friday, May 27, 2016

Thoughts on TSA

Several commentators have registered their dismay at the TSAs long lines and general dysfunction. They touch on most of the issues, but I have a few thoughts:
  • The bureaucratic incentives for offering high-quality service are weak.
    • Public employment rules and norms over pay and job security reduce employee quality and increase shirking.
    • The lack of a direct feedback mechanism in the form of sales or profit-sharing reduces the institutional incentive to innovate, and devalues customer service in relation to other goals.
    • A single provider (vs multiple private security firms) eliminates the competitive incentive to innovate and provide good customer service.
    • The absence of a market for corporate control eliminates opportunities for efficiency-enhancing bureaucratic shake-ups.
  • Abolishing the TSA and shifting to private security firms would allow airports and airlines to exert more influence over processes and compete to acquire advantage by giving passengers a good customer service experience.
  • It's obvious that private security would improve customer service, and it's not obvious that actual security would suffer. 
    • Private firms would still have a significant incentive to be risk-averse, given the extreme fragility of consumer sentiment over air travel. A single big mistake would threaten the entire industry and threaten to push many airlines into another cycle of unprofitability.
    • If worries about private firms cutting corners on security to get extra profits were truly convincing, why have private airlines at all? The same mechanism for bad incentives exist. In reality, the DoT, FAA and other public agencies don't get too involved with frontline operations because private expertise and incentives do just fine. Back-office regulations and audits provide a sufficient check on profit-motivated shortcuts.
  • Besides, the actual connection between airport checkpoint methods and security is demonstrably weak.
    • Long lines caused by tight security create a second-order vulnerability (as we've seen).
    • 9/11 shifted passenger norms as to make another in-flight hijacking essentially impossible.
    • TSAs own tests have shown that their ability to detect contraband can't really get much worse.
    • Static checkpoint strategies are easily adapted around (terrorists can choose other targets). Bribing airline/airport personnel would be easy for a well-funded and well-organized terrorist: many are low-wage, low-education, low-skill workers with access to secure areas (especially contractors, who might drive trucks into secure areas with minimal screening).
    • Terrorists can always just put weapons and bombs inside large wheelchairs, which receive minimal TSA scrutiny at security checkpoints.
  • TSAs ineffectiveness raises the total cost of air travel, shifting some people into other, more risky transportation alternatives, resulting in more loss of life.
  • Currently TSA is funded only in part from ticket taxes. This has a distributional effect of transferring resources from non-fliers (who tend to be poorer) to fliers (who tend to be richer). Incorporating the full cost of security into ticket prices would correct this. Although this would probably result in less total flying on the margin, it's not clear why this would be a bad thing. The public subsidizes air travel in a myriad of ways, not least maintaining the institutional structures that enable global network and market coordination in the first place.
    • Unrelated (but interesting): the US has a protectionist trade policy that bans foreign airlines from competing with US carriers on domestic routes (called cabotage). This policy enriches US airlines at the expense of US consumers and should be abolished.
  • A huge driver of long TSA lines is the inadequate physical design and quantity of airports in the US. After 9/11, some airports luckily happened to have extra space for expanded checkpoints. Many didn't. Subsequent rehabs and add-ons have helped somewhat, but ultimately the US has a shortage of large airports in major population areas, notably on the east coast. Land-use restrictions and public policy that affords too much power to NIMBY activists creates a 'tragedy of the anticommons' problem, essentially making new airport construction impossible. I suspect if it were possible, airlines themselves would raise funds and build new airports from scratch, as they have sometimes done with passenger terminals at existing airports. The status quo results in long lines, longer taxi times, and epic zero-sum, scorched-earth political battles over scarce runway slots.

edit: I'm no corporate shill, but this example of Delta designing and paying for checkpoint innovations at ATL is a good example of what the TSA's existence overwhelmingly prevents.

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