An Economist with “Enough Steel” to Cut “the Tentacles of Restrictive Government Regulation”

(p. A9) When Elizabeth Bailey was appointed in 1977 as the first woman to serve on the Civil Aeronautics Board, or CAB, she saw her job as freeing the airline industry “from the tentacles of restrictive government regulation.”

During a confirmation hearing, Sen. Ted Stevens of Alaska asked Dr. Bailey, a Republican with a Ph.D. in economics, whether she had “enough steel” for the task.

“I hope so,” she said. “I’m tougher than I look.”

The Airline Deregulation Act of 1978, approved by Congress with strong bipartisan support, led to abolition of the CAB at the end of 1984 and freed airlines to set fares without government permission. During her six years on the board, Dr. Bailey proved one of the most ardent advocates for swift deregulation, a process that reduced fares, increased choice and doomed inefficient airlines.

. . .

One summer, she accepted an offer to join a group studying regulatory issues at Bell Labs. She gave a presentation on regulatory distortions to a panel of economic advisers to AT&T, including William Baumol and Alfred Kahn.

Dr. Baumol helped her gain admission to Princeton as a doctoral candidate in economics. She delved into business-competition issues and received her Ph.D. in 1972.

Those studies prepared her to oversee economic research at Bell Labs and advise AT&T on its impending breakup by regulatory authorities. “We said, ‘Look, if the government is going to bust you up, there are some ways that are going to be a lot less costly and a lot more efficient than others,’ ” she recalled.

Dr. Kahn, later chairman of the CAB, became her mentor and ally at the agency, where she rose to vice chairman.

For the full obituary, see:

James R. Hagerty. “Economist Helped Free Airlines From Red Tape.” The Wall Street Journal (Saturday, Sept. 3, 2022): A9.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date September 1, 2022, and has the title “Elizabeth Bailey Helped Free Airlines to Cut Fares.”)

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