 and welcome to tonight's Big Ideas Live. We're gonna be talking about why the TSA doesn't keep us safe. Before we get started, I just wanna very quickly go through how to ask questions. I will be taking questions a couple of times during this presentation. If you haven't come to one of these before, just letting you know you can submit them anytime, there's a little questions tab on your big, sorry, your go-to webinar console, and just use that and I will read them for you when it becomes time for that. And joining me tonight is Dr. Steve Horwitz, who is the Charles A. Dana Professor of Economics at St. Lawrence University. Thanks so much for being on tonight, Steve. I know this is your second appearance. It is, and my pleasure to be here. I think, I don't know if I was the first one or not, but I was certainly one of the first ones, so. You were the third one. Third one, all right. Yeah, so you're making a triumphant return. Indeed. So tonight, before we talk about the TSA, first I wanna talk about something called opportunity cost, which is an economic concept that I think will be really helpful to talking about the TSA and thinking about other public policies. So could you just quickly give us a rundown of what exactly the opportunity cost is? Yeah, well, certainly one of the most fundamental concepts in economics and economics starts with the idea that we have scarcity and scarcity means that we have to make choices. And whenever, anytime we make a choice, that means we're not choosing other things. So I love to teach intro at eight, early in the morning, like I teach eight, 10 in the morning. So my favorite example of this is I said, you know, my students, look, you came to class today at eight, 10, what was your opportunity cost? What was the thing you gave up? And the thing that they gave up, of course, for most of them was sleeping another hour or maybe for some breakfast. So every choice has a cost. And we refer to it as the opportunity cost refers to the next best alternative that you had. And in particular, when we release the way I teach it, and I think the right way to teach it, is to stress that that opportunity cost is actually the expected subjective utility of your next best alternative use. So, well, we can talk about exactly what that definition means in a little bit, but to be precise, right, that's what we really are concerned about here. But the basic definition is, what's the next best thing? What'd you give up? Whatever you're doing, you had to give something up. What'd you give up? That's your opportunity cost. Yeah, I'm gonna make you explain the subjective utility, just because we do have some people who come to these things and they, this might be the first time they're hearing these terms and not everybody has a degree. Well, sure, and when we talk about, well, let's take each of the three words. We've got subjective, expected utility. We're gonna work backwards, right? Or we'll start with utility. When economists use utility, all we mean really is the capacity of a good to satisfy some want, right? So the fact that an hour of sleep would satisfy my want for more sleep, right? That means an hour of sleep has utility. Attending an economics class has utility because I have the goal, the want, the end of learning economics. Going to Starbucks and buying a latte has utility because I wanted to quench my thirst or I want the caffeine or whatever. So, utility just refers to that capacity. It's not a feeling, it's not something that you can measure. It's just a capacity that goods have. We refer, when we talk about utility, we refer to it as being subjective because you, only you can know exactly whether a good satisfies some want for you, whether it has utility and how important that utility is, just how powerful it is, how important it is for you to have that want satisfied. If you, some people love pro wrestling, some people hate it. For me, pro wrestling has utility. I love it, okay? But that's subjective and there's nothing in the good itself. There's nothing about pro wrestling. There's nothing about lattes. I don't like lattes. There's nothing about a good in itself intrinsic that gives it that value or utility. It's our perception. And then finally, the expected, that's the key part when we talk about opportunity costs, right? Because when you make a choice, you never experience the thing you didn't choose. So when we think about what's my opportunity cost of going to class, if it's sleep, I never do know whether that hour of sleep would have been terrible or whether it would have been the greatest hour of sleep ever. When we choose, we're choosing on the basis of those expectations. I have an expectation of going to class. I have an expectation of the utility of sleeping. I compare the expectations, which are subjective and I choose the one I think's better. But I never know for sure what I gave up, right? You know, as I say to my students, you might have slept in because you really needed to sleep. For all you know, you missed the greatest hour of class ever. You'll never know, right? Because you gave it up. And so, subjective expected utility, that's the key to opportunity costs. Something that I sometimes hear people with a little bit more background in economics making the mistake of is utility is the same as happiness. Yeah, and it's, yeah. And yeah, there is a problem with that, right? Because sometimes, even if going to your intro to econ class doesn't make you happy. Right. Or a better example is the dentist, right? Unless you're the Bill Murray character in Little Shop of Horrors, going to the dentist doesn't make you happy, but it has utility. It satisfies a want, which is having healthy teeth, right? So I think the important thing to remember when we talk about utility is to think in terms of satisfying a want. Sometimes that's pleasurable, right? But sometimes it may not give us happiness, but it does something that we think is important. We all can all think about things that we say, I need to do this though I'm not going to enjoy it, right? Still has utility. Yeah, so I just smiling because my dad is a dentist. I didn't even know that people didn't like the dentist until I was like 11 years old or something like that. And somebody said, oh, I hate the noise there. And I had no, it's the drill. Apparently people don't like the noise of the drill. I used to just run around like a maniac in the dentist's office. So not the same experience. Nope. And that's where the subjective part comes in, I guess. Yeah, exactly, exactly. So we talked a little bit about what it is. Why do so many people miss opportunity cost? I mean, it seems intuitive, and yet it's not always something that we consider. Yeah, I mean, I think it is about the economic way of thinking when you have that sort of training to think that scarcity and choice, then you begin to see it. But I also think that people, when we say cost, people think something, money, right? The price you pay, they think in terms of something you consciously give or have to give. And I think when you understand opportunity cost, especially this last point I was making, there isn't even, you know, to steal from the wrap. There's not even an it there, right? When you're giving up, you make a choice based on what you imagine you're giving up. And so it really is, I mean, it's not a thing. It's not a tangible thing. But it's deeply connected to the idea of economics as about choice. And I think when you begin to think, even people talk about economics in general, tend to make the choice or make the mistake assuming that it's about physical material things when it's really about actions, choices, and so on. So I think it's connected with that. They miss it because they have a misperception about what economics is and what it does. Yeah, it's, what Steve calls the economic way of thinking. Once you get it, it's kind of hard to turn it off. Yeah. Right. And I should say, you know, it's, when we think about the monetary cost of something, if we say, you know, I paid $4 for that latte. In some sense, yeah, that is the cost of it. But what's really the cost is what's the next best thing you would have done with that $4? In particular, what did you, what did you expect to be the utility of the next best thing you could have done with that $4? So even when we think in terms of handing over the money, right, ultimately, it's not about the money. It's about what else we could have done with the money. So even there we have, you know, we can make that point. Yeah, it's more obvious. I think when resources are really scarce. So you only have $4. So are you going to have a latte or are you going to take the bus home instead of walking or are you going to buy dessert instead of a drink now? And stuff like that. But that's not how things normally are after you're a certain age. Right, right, right. But even, you know, so one of my, one quick application of opportunity costs, you know, suppose you go out to dinner and you want to sit and chat for an hour after dinner at the table, right? I mean, should the restaurant mind if you do that? Well, the answer to that question is, is there an opportunity cost, right? Are you taking up a table? If that restaurant's empty and there's plenty, you know, there's five, six, seven empty tables and nobody in line, then you can sit there and chat for an hour. I mean, you should tip nicely too. But if the restaurant's busy and full, then you go, well, there's now an opportunity cost. If I stay here for an hour, I've cost them another meal and a better tip really heavy if you're going to do that, right? So thinking in terms of what's the, you know, what are people, what aren't people getting? And again, this is also part of the other, you know, sort of key thing in understanding economics, economic thinking, which is the unseen. Opportunity cost is about recognizing the importance of the unseen because the opportunity cost is what you didn't do. And that's the unseen. Yeah, and anybody who was on our Big Ideas Live with Don Boudreau will know all about that because it's a really, really cool concept. Once you get it, it's like there are mysteries everywhere waiting to be solved. So we talked a little bit about why people miss it and we talked a little bit about this, but what are some other things that people who understand, I'm sorry, not economics, well, also economics, but opportunity cost, what do they get wrong? Is there anything that we haven't covered? I don't think so. I kind of jumped the gun there. Yeah, well, right, a little bit. I do think sometimes students will say things like, it's just this point of recognizing that opportunity cost is the thing you didn't get, right? It's not, it's never in your hand, right? It's always gone. And students sometimes will talk in ways that suggest that the opportunity cost is something they still have, right? And no, it's not something you have, it's something you could have had, but chose not to, right? So those, I think that's the key thing, is to recognize that it's ultimately subjective and that we never know it for sure, right? Because it's always based on that expectation. Yeah, that's interesting. You've definitely given it up if it's the opportunity cost. Right, that's right, right. And if you want the classic literary example is the Frost poem, The Road Not Taken, right? I mean, that's all about opportunity cost. Little did you know, lit majors. So that was kind of our overview of opportunity cost. If you didn't understand anything, now is your chance to ask. You can enter a question. While you do that, I'm gonna launch a poll, which will just kind of give us an idea of how much you guys think about this. So if you can click on your screen and let us know exactly what you think, then we can, we might talk about it if it's really surprising. Otherwise, it's just kind of a, it gives you guys a chance to ask a question if you have any, but if not, then we will move straight on to the TSA. So if you think you have a question now, we might have a really good answer. But on the other hand, you might miss out on some really amazing TSA discussion. So tread lightly, friends. Consider the expected cost. Apply what you've learned to get just super nerdy. I'm gonna give you guys five more seconds. All right, so almost everybody says that the most important time to consider opportunity cost is all the time. You gotta be thinking about this. But some people said that it's in personal decisions that when you're making decisions for yourself, then one person submitted a question that says I vote for TSA discussion. So we're moving on. But yeah, most people say it's important all the time, but some people say, and maybe this is true, that it's not considered in personal decisions as much. Maybe it's something that they only have thought about in the past when they're talking about policy. So on to the TSA, everybody's favorite part of air travel these days. So in spite of all of the resources that are poured into the TSA, it's impossible to miss the TSA when you go to the airport. It's now a major part of why you have to be at the airport, when you have to be at the airport. You've gotta keep in mind how busy the security line's gonna be. And all kinds of money and people and effort has gone into this. And yet there's a lot of research out there that says that the TSA is actually not that effective. How can this possibly be with all of these resources poured into it? Well, first of all, I mean, the history of so many government programs is that just cause you're spending money on something doesn't mean you're actually doing anything. And one of the best sort of the example of this that I think Tom Sol was the first person I heard make this point is the way in which government programs and organizations are named after their intended results. So the Transportation Safety Administration, well, that must be keeping us safe. You can play with this all day long. The Department of Defense, if you want. The Environmental Protection Agency, does it actually? All of these things are named after their intentions. But one of the first lessons we learned in economics is that intentions don't equal outcomes. So spending all you want on TSA doesn't necessarily mean you're generating the outcomes that it desires. And we see this with all other kinds of programs. We see this with public schools or another great example. We can spend, spend, spend, but that doesn't guarantee us that kids are gonna be educated or go to college or whatever else it is that we might be thinking of. So spending isn't the same as results. Intentions aren't the same as outcomes. And I think that's a key thing. The other point I think to keep in mind here is that to the extent outcomes matter to the TSA, it's not clear that safety is the outcome that matters. That they're a political organization. And the most important thing that from their perspective is that, well, costs don't matter to them, right? And creating the illusion of safety is really important. So, as long as they're doing things that look like they're keeping us safe and they're able to spend money and expand their power and the size of the bureaucracy and employ lots of people and have lots of people loyal to them, and all those kinds of political things, the actual, whether they're keeping us safer then something else doesn't ever matter, right? As long as they've created the illusion of safety, so be it. And then the question becomes, the question we always have to ask in economics is the opportunity cost question, which is as compared to what? Right. Sorry, we have a friend who says compared to what at everything. I always have to laugh for a second. I have a quick question from the audience. So, well, it's more of a clarification. So, they're saying, and they're probably right, the TSA's mission is security, the FAA's mission is safety. I'm not sure if there's too much, I mean, if you're insecure. Well, safety, I mean. We can talk about that for a second. Because, I mean, it is about security, but I mean, customs, I think this is maybe just interesting because of how people think about the mission of the TSA. So, if the mission is to keep people who don't belong in the United States out, then that's actually customs and border protection. I think that in the case of the TSA, I mean, it is security, yeah, Transportation Security Administration. But it's also, but I mean, to the degree that, to the degree that it's preventing people with weapons from getting on airplanes, that's also safety. I mean, I think, you know, you can talk, I think it's fair to say, it's, that, why we care about security is it keeps people safe. Now, the FAA's job is to, here's the distinction I might make, and that's not a perfect one, but the FAA's job, at least in theory, is to make sure that the planes are safe mechanically and that the pilots and crew are not a cause of, you know, lack of safety. So, the FAA has all those rules about pilot hours and these sorts of things. What the TSA is doing is making sure that the passengers aren't a source of lack of safety. So, I mean, to some degree, it's semantics. And I think, you know, why we, again, why we care about security is that if we don't care about security, it threatens people's safety. I mean, why don't we have security guards at a building because if we don't, people's safety is under threat. So, I'm not sure, I mean, I get the point and fair enough, but I'm not sure it's a difference that matters. I think the real difference between them is who's the potential, who might be making things unsafe, right, which groups, and they just focus on different, which, you know, different groups that are making people unsafe. That, you know. And I'm actually gonna come back to this in a little bit because I think it'll be an interesting way to talk about something I've got planned for later. But thanks to the audience member, Michael, who asked for that. So, not only is there travel less safe, I'm sorry, not safer, but travel altogether has become less safe. We could argue about whether or not it's become less secure, but it's certainly become less safe. There's evidence to back this up. So, how did that happen? What did they miss? Could opportunity costs have helped see this coming? Yeah, well, this is the thing, right? I mean, even before we had a TSA and before 9-11, okay? You know, it's not a joke, I guess, but the line is, you know, what's the most dangerous part about flying? And the answer is driving to the airport, right? You're much more likely to be injured or killed driving to the airport than you are in an airplane. So, if we think about what the TSA has done for a moment, right? What's the TSA done? The TSA has raised the cost of flying by adding on this, as you said, Janet, the extra time that we have to spend getting to the airport early, you know, the time we wait in line and the cost of the, you know, the groping you're gonna get or having your X-ray or body scan, all those things, all the costs, all the hassle, all those things, make flying more costly, they make it more expensive in the economic sense of the term, which is, there's more things you have to, you know, give up to do it. And to the extent that that discourages people from flying, here's another key economic concept, people make substitutions on the margin, that is, face with, flying's a little too expensive now, I'm gonna drive instead, I'm gonna find a substitute, I'm gonna take a bus instead, all those other forms of travel are less safe than flying. To the degree that the TSA has made it more expensive, more costly to fly, and therefore push people to drive, it's killing people, right? And there's a number of studies that have been out that have tried to estimate how many more miles people are driving and then use the standard calculations of vehicle deaths per mile, and the number is not small of the additional number of people who've been killed because of the TSA. Now, to be clear, right? We can agree, we all wanna fly on safe, secure airplanes. So the question is, is whether the way the TSA does things and the costs it imposes by doing it are the best way to ensure that safety. But to the degree it has made flying that much more costly for people, it's encouraged them to drive and that's much riskier than flying. So that's certainly one thing. I mean, the other thing that we've seen is how many stories do we hear? It seems like one every couple of months of somebody either on purpose or accidentally snuck some contraband item through a TSA checkpoint. And that's important too, right? To the degree the TSA, I mean, it's one thing to say, the opportunity cost of the TSA, okay? We're leading people to drive and that's causing more deaths. But there's not much good evidence to suggest aside from that, that the TSA is keeping us any safer. It's true, we haven't seen another 9-11, but if that's our standard, that's an unrealistic standard. But we certainly see people get through checkpoints with stuff and then we see all the ridiculous lengths that TSA goes to to sort of make excuses. So it suggests that both we're pushing people into an activity driving that's less safe and also not making flying any safer than it already was. Yeah, I sometimes wonder, because the list of things that you, it's kind of the same at the border, the list of things that you can't bring is so long that, and there are so many things to check and it's now, I don't know if anybody else has experienced this, but even within the United States, I'm in Canada, so sometimes there are different standards flying in Canada, but even in the United States, when I flew out of Atlanta earlier this year, there's the guy who's normally saying, put your laptop out of the bag on the thing, nothing else on top of it, take off all your jacket, he's going, keep your laptops in your bag, keep your shoes on, and so like, I really feel like there's so many rules that they're almost becoming unknowable, especially as they start to shift or continue to shift. Well, and inadvertently, people could do things that are unsafe, which I worry, well, I don't really worry, I'm not a warrior, but I wonder about it. Well, and I think the important thing there, this is an important sort of political economy point, that one of the things governments are really good at is making the rules contradictory and confusing and arbitrary and change them all the time, because when you do that, that actually gives them more discretion. Now they can choose which ones to enforce and which ones not to, they can choose, the story just within the last month of the guy who was supposed to be screened a second time before he got on the plane, and they forgot to do it, he gets off the plane, off the plane, and the TSA at the airport he lands at wants to screen him again, and good for the guy, he basically said, the heck with you, refused to submit to it and walked out of the airport, and then he walked away. But that's the kind of ridiculous stuff that you see when it's about bureaucracy and discretionary power and following rules, and the term that the experts use for this is it's security theater, it's playing and making things secure rather than actually making it more secure. Yeah, and there's also the issue of all of the resources that are put into the TSA. What are the opportunity costs of all those resources? Well, if we can even know. Right, right, I mean we can say in very general terms what some of them are. We talked earlier, for example, about the wasted time people stand in line and get pulled aside and get to the airport early, and then you get there early and there's no lines, you sit at the gate for an hour and a half, I mean all of that time has an opportunity cost to it, certainly. And I don't know about your airport, but if you go to mine, there's 15 TSA people standing around, four of them actually working, the other's not clear what the other 11 are actually doing, 10 or 11 are actually doing. Like all government bureaucracies, they tend to over employ it, creates again, constituency and so on. And those human resources have opportunity costs too. What else could those people be doing? In some cases I'm fearful of what else they might be doing, but presumably many of them could be doing something alternative that was much more productive and to the extent that the TSA is drawing them away from other kinds of uses, that's a loss in those places too. So there's opportunity cost to those human resources and the time of flyers that are all part of this too. So when we think in those terms, could the resources that were pouring into the TSA in these ways be used more effectively in other ways that might provide security? Yeah, I also wonder when you've got, it seems as though groups like the TSA create demand for something that can kind of quickly scan everybody. And I wonder if there might be a better way to effectively scan fewer people. Well, I mean. Accepting that you need to be scanning. Like it's not just the people, it's the effort that's going into invention and innovation. Right, and a couple of things to think about here, we're already admitting that with pre-check, right? We're basically saying for people who meet certain criteria, you can go through the old fashioned x-ray, you don't need to take your shoes off, right, all that kind of stuff. So right away, that should tell us that the old system where we treated everyone as if they were a potential terrorist was probably a mistake, right? Certainly from an economic perspective, it makes more sense to allocate your security resources to the people you believe are the highest risk or to put it the other way, allocate resources away from people who you have reason to believe are low risk. The other kind of strategy is the so-called Israeli strategy where they more precisely target people as high risk and then they work more intensively with them. They interview them, they do all that, their security people are trained to spot certain kinds of behavior. So there's ways you could do that more thoroughly and treat people who you have reason to believe are high risk more thoroughly but for everyone else, move along. It's not like people going through preach, no one going through pre-check has bombed an airplane yet, right? So why isn't this available to more people? Well, and not only that, but has anybody bombed it? Well, right. When it was the last time an airplane was bombed in, sorry, in the United States, specifically, I'm aware. We still don't know what happened to one Malaysian aircraft and the other one was shot down, which is a little different, right? And again, notice, right? I mean, if you're crazy Ukrainians and you wanna shoot down an airplane, no TSA is gonna stop that, right? So again, I guess there is one fundamental point to make here too. This is another sort of economic way of thinking point. Because all of these things have opportunity costs to them. If our goal was absolute 100% airport security, right? We could spend gazillions of dollars screening personally, every person doing these railing treatments, every person. And we might well reduce that probability down to zero. But we still have to ask the question, is it worth it? What's the opportunity cost, right? All the resources we're spending to reduce deaths by terrorism to zero mean we're giving up resources being spent on other things. I mean, economists like to make the joke, what's the optimal number of something, right? What's the optimal number of people who die in an earthquake? I mean, we could build everything to 9.0, with standard 9.0 earthquake. And we never have people die in an earthquake, but is it worth it? I mean, that would require trillions of resources. The bottom line is it may well be that it's impossible to prevent all acts of terrorism. The question is, is it worth it, right? Are we, given what we're spending, are we getting the value out of it? And what's the next best use, the opportunity cost we could be doing, you know, we could be, where would those resources be instead? Yeah, I was thinking about that, that what's the optimal number of something bad is not the way to make those friends at parties, but it does make you think about some interesting things. And I was thinking a lot about it last winter. What's the optimal number of snow-related traffic jams in Atlanta or South Carolina? It's not zero. It's not zero. That's right. It makes a lot more sense to have a massive traffic jam. Right, right. It doesn't make sense for them to have the same fleet of salt trucks and plows that Ottawa does, right? And it just doesn't make any sense. You could have them and you'd never have traffic jams, but it seems like that's a waste of resources. Opportunity cost is too high, exactly. And so, but in that case, people sort of get it. Sometimes you'll still get some fights of go, well, this is ridiculous. Yeah. Well, it's inconvenient. I don't know if it's ridiculous, although sometimes it does look a little bit ridiculous, but remember kids, that's the stuff that gets on the internet. Yup, yup. But it's a little bit harder for people to stomach. What's the optimal number of nine of 11s? Right, and that's a hard question, or even what's the optimal number of deaths in an earthquake, right? It's just, I mean, when economists use the word optimal, right, we don't mean like the nicest, the best, the happiest, right? What we mean is given the cost, right? Is it worth it? I mean, optimal means given the constraints we face and given the alternative use of resources, what's the best choice to make? Atlanta, I mean, in the same way, the optimal number of snow plows for Atlanta is much less than the optimal number for Ottawa, right? And it doesn't mean it's good or bad, it just means it's the right number given the circumstances they find themselves in. And to sort of reduce a bad number any further means, I mean, we can talk about the classic example, right? Which is road deaths, right? Suppose we decided we don't want anyone to ever die in a traffic accident. Well, one thing we could do is reduce the speed limit nationwide to 30 miles an hour, okay? That would reduce traffic deaths. Huge opportunity cost. There's Gordon Tullick's famous suggestion, which is we take every car be built with a large inward-facing spike on the steering wheel, right? If you had that spike sitting there, you'd drive really, really carefully, yeah. So again, but do we really want to do these things? And we hear this talk all the time. We got to put a cop on every corner. Well, do we, right? I mean, do we? Is that what we really want to do? It's, you know, or the best one. If it saves the life of one child, it's worth it. Right. No, is it, right? Is it? What's the opportunity cost, right? And so all of these kinds of things where we think about, we have to recognize there's trade-off. That's the simple truth. Yeah, and I feel compelled to point out that unless I'm behind on my reading on this, I think people have basically decided that with the information that we have now about 9-11, the optimal number is probably zero. I think that there's a lot of research that says that passengers just wouldn't let. It won't happen again that way. They would crash the plane or they would fight the guy even though he had a knife. But that's different. Right. That's the people who have the information in the specific time and place making a decision which is different than kind of all of this stuff. So it's interesting that the answer might actually be zero. Yep. And yet that still doesn't justify everything that's being done. Yep, yep. So I have to think about opportunity costs, yeah. Yeah, for sure. So I'm gonna launch the second poll and I've got a couple of questions. So you guys can amuse yourselves with the polls as I go through. So when Rachel points out that the same thing that you did, the Israeli system is much more expensive, not only because they're more thorough but also their screeners have like master's degrees. Yep, yep, yep. I'm gonna paraphrase what she said and say TSA screeners do not. Do not, yes. And one thing to add there while you guys are doing this poll is that if you're working an airport in Tel Aviv, for example, or Haifa or something, you face a different set of constraints and concerns than you do work in the airport in Green Bay, Wisconsin. So it should be the case in Israel, for example, or wherever LL flies, that you should have more thorough screening and you should spend more resources there on security because the threat is greater. And one of the things we might talk about in the context of the TSA is just how great is the threat, right? I mean, the TSA wants us to think that there's potential terrorist plots all the time that are being foiled, but do we know for sure? Those are good questions. I've got another... We both know Rachel, so I'll tell you what she typed later. There's another question. Oh, okay, well, actually she clarified. So she says she likes, I guess this is something that happens. People walking onto domestic Israeli flights with Uzi's. They're soldiers, thank you, Rachel. And she says that's the other way to solve the problem. Well, soldiers. I mean, some folks, most of the people attending tonight are probably too young to remember a very famous episode of All on the Family from the 1970s, where Archie Bunker did a short op-ed on the local news where among the things he said was, if you wanna stop at the time, it was hijackings, right? If you wanna stop hijackings, what do you do? Arm all the passengers, right? Give everyone a gun on their way into the airplane, right? And of course, the son-in-law character, the Rob Reiner character, that's the most ridiculous thing I've ever heard, but we get it, right? I mean, in our society as a polite society, that you can see why that isn't a totally ridiculous suggestion. Right. I just put up the poll numbers as I thought people might be interested. Some people are worried about driving, some people are worried about flying and some people just like to travel. They don't worry so much. I just thought that would be interesting to take a look at for everybody. And I've got another question. The TSA has increased inequality in access to flights. People with TSA pre-check can breeze through security while people who can't travel as often have to wait in the long lines. They remove their shoes, they take out their laptops, they might not know what they're doing, which makes it take even longer, you get dirty looks. Yup. Definitely get dirty. I hate those people. I wasn't gonna name names. It's a more classic system. So is there something about society that we've given up by putting something like this in place? That's a great question. I mean, I can think of a million answers to this question, but let me just say one thing first. One of the things that the TSA does is they also randomly hand out pre-check. I'll tell you a story. I fly all the time. I can't ever get pre-check except one time I flew on American, I got pre-check. I flew out to Las Vegas this summer with my wife who flies once a year, maybe twice, has no status or anything like that. She gets pre-check, I don't. So it isn't necessarily, your question's probably correct that it tends to be people with airplanes, airline status and stuff, but you can apply for it. And if you get global entry and stuff, you can get pre-check too. So it's probably not as bad as that question makes it seem. But the other reality is we already have a classic system when we fly. Even without the TSA, I get the first class line because I'm US Airways Platinum. I get all kinds of that. I get free check bag. I get the first class check-in, right? So the airlines are already segregating their passengers that way. Arguably, if we think the TSA is a bigger hassle than having to pay for a bag or wait in a longer line, I mean, you can argue to the extent that elite travelers are not having parts of their body groped when they go through line. Okay, that matters. But again, I think that inequality, those inequalities were already there. The TSA has agreed, magnified them with pre-check, but how big of an effect that is, I'm not quite so sure. But yeah, sir, it's certainly happening. So I'm gonna move forward. I've got a couple of, oh, I have one question that's really quick. You might know the answer and you might not, but it's empirical. Do you know if the public feels more secure with the TSA screen? Oh, that's a good question. You know, a couple of years ago, I wrote a piece on the TSA and I looked at the data then, and my recollection was it was a mixed bag. But it may be now that people, I think, again, I'm trying to remember, I think that the most common answer was it didn't make a difference, right? That they didn't feel safer, but they didn't feel less safe with the TSA. Rather, it was just a hassle. Again, I'm not even sure that was a majority. That might have been a plurality answer. It's been a while since I've looked at that stuff. Yeah, thanks, Michael, for that question. So, going back to, well, not that we've really departed too much from the TSA, but you do hear the argument, well, now we have it. We've paid all the costs. We've got all the scanners put in. Shouldn't we just make the best of the situation that we've got? Why should we even talk about whether or not the TSA is worth it at this point now that we have it? Well, here's another classic bit of economics, right, that you've got to learn from beginning and that's what's known as the sunk cost fallacy, right? The thing is, all the money we've spent on the TSA, we're not getting it back. It's done, it's gone, it's in the past, right? You know, it's spilled, no crying over spilled milk. The milk spilled, can't unspill the milk, can't put the toothpaste back into whatever metaphor you want, right? It's sunk, it's dead, it's gone. The question is now, is spending the additional amount on the TSA worth it in terms of what it delivers compared to the next best used of those resources? And here's where opportunity costs meets the idea of what we call marginal costs. What matters for decision making is the addition to costs, right, that we bear when we take a new action. So what matters should we fund the TSA, continue funding the TSA even more? What's the value we get out of those resources versus what's the value we get out of the alternative uses of those resources? And we're right back to opportunity costs, but opportunity costs is the cost of the next decision. History doesn't matter, right? So if you think history matters, I wanna play poker with you because the first rule of poker is don't throw good money after that, which is just another way of saying don't fall for some costs, right? If you've bet, money you've already bet's gone. If your hand's terrible, either bluff or fold, right? There's no saying, I spent 10 bucks on this hand already, I might as well pull another card. That's bad poker. It's not just the TSA you get to learn about anything. That's right, you get good poker advice too. And by the way, I just taught some costs in intro earlier this week, and the last week. And of all the things that I teach when I teach intro economics, I actually think some costs and some costs fallacy are among the best life advice that economics can give. Which is when you're thinking about decisions, here's a case where it matters for policy a lot, like we're just talking about. And one of the things that really matters for policy is war, right? Oh, we've been in there three years, why stop now? We have to see this thing through to the end. No, three years doesn't matter. The dead bodies are dead, right? I mean, you're not gonna bring them back to life. You want to have more people dead is the question now. But again, I think the some cost fallacy in personal decision making is one of the most useful pieces of economics that there is out there. Yeah. Yeah, I think I'll come back to that if we've got time. Cause I want to ask you, and you remember this, and I actually don't, but it's not because I'm so young. It's just because the first flight I ever took was on like the beginning of October, 2001. What would, and more importantly, what did the world look like without the TSA? Was there just no airport security? Did everyone just waltz onto planes? Yeah, well, it depends how far back you want to go. It's great. By the way, if you watch old movies or old TV shows, sort of, you know, from the, say, 60s or 70s, and certainly before, 60s or 70s at least are recognizable in terms of jets and airports. Yeah, I mean, people really did sort of, you know, before the kind of hijackings in the 70s, you could wait for someone at the gate when they arrived, right? You could just walk, you know, they'd walk out of the airplane and you'd be there waiting for them at the gate, not, you know, on the other side of security. Or, you know, you could, I mean, it was very lax environment. You could run into the thing, you know, run into the jetway and all that kind of stuff. But once the hijackings in the 70s began happening, then we began to see the beginnings of what we now think of as airport security. And certainly before 9-11, it was X-ray machines. So I mean, you know, you didn't have to take off your coat, you didn't, you know, you just maybe took the metal out of your pocket if I'm trying to even remember, yeah, you took the metal out of your pocket maybe, and you walked through an X-ray machine and that was it. And there was no, you know, there was no looking at your laptop, no taking off your shoes and belt, nobody fueling you up, no putting your hands over your head like you're, you know, getting arrested. Or Michael Brown about to be shot, I guess, too. You know, all those kinds of things, right? This sort of, the kind of submission and humiliation of the TSA process wasn't part of it. It was more civilized. If you've gone through TSA through pre-check these days, pre-check is much closer to the pre-TSA experience. It's not exactly yet, but it's much closer. I'm very fortunate. I live, you know, I fly out of the Syracuse, New York airport all the time, and they do not have the scanners. They never have. Even after they rebuilt their whole security area, they never got the scanners. They just have X-ray machines. And it's, it is, and it's, I get spoiled by it and on my way home I gotta go through scanners. But, and it's a fairly small and fairly quiet airport. And I can show up 45 minutes before a flight, especially, you know, I have status that there's no one in line in the first class line. I can zip through security in 10 seconds, right, and be at the gate. So it is like, and they do have a pre-check line and I'm not sure why, because it's not that much different than, you know, you have to take your shoes off in your laptop out, I guess. But, I mean, you know, I think like, so, but you're not, but you're not going through the humiliation of the body scan and the pat down when it, you know, when you're, whatever, the little metal thing on your belt or your pants sets it off. Yeah. So I do think it's interesting to talk about that though, because especially like there are more and more people who just don't remember not having it or when they don't have it, they think of it as like the first time it's ever happened. I mean, there's the other possibility too, which is each airline could institute its own security measures. Yeah. And again, that's not an unreasonable thought, right? After all, who has the most to lose from a plane getting blown up in the sky, right? In many ways, it's the airline. You know, you, you know, are you less likely to fly Malaysian airlines these days? Yeah, you are, right? I mean, you know, you are an airlines or, you know, airlines that demonstrated a consistent inability to keep their plane secure, especially in a world of the internet where word would get around like this and, you know, imagine the Yelp reviews for an airline, right, and whatever, you know, okay? That the damage to your reputation would be instantaneous. And so airlines do have a strong reason to keep their plane secure. How they might do it differently from the TSA is a really interesting question. Again, I think the Israeli model is helpful here. You know, it's, LL has a big role to play in how these planes are kept safe. So it might look very different if the airlines had to do it themselves. And it amounts to, in some ways, even as, you know, what a pain TSA is, it's a huge subsidy to the airlines. If the TSA weren't there, the airlines would presumably have to demonstrate, you know, why, you know, why are, why you should fly us. You'll never see airplanes advertised or airlines advertised in the basis of our flights are safer than anyone else's, right? Or, you know, we have a better record of preventing, you know, whatever, crazy passengers. They don't have to. It's kind of like banks don't have to advertise who they lend money to, because they have the Federal Deposit Insurance Corporation protecting all of them. So it would be interesting to see what would happen if we took away that role of the TSA and sent to the airlines. And the airports, too, right? Airports would have a role and you'd see some kind of cooperation between airlines and airports to provide that, which is, you know, where this all started years ago. Yeah. So this is, this might be an interesting time to bring the FAA back up, because how much do you think the FAA has to do with making airplanes safe? And how much do you think it's other? This is what kind of came to mind, but this is a more appropriate time to talk about it. How much is it the fact that, you know, airlines don't want, planes are expensive. Right. I don't know what they cost, but I know it's more than a car, and I'm really upset if I suddenly didn't have my car. Right, I mean, you know, airlines, banks don't want to make bad loans, right? Airlines don't want airplanes not to work. They don't want airplanes to be, to crash, you know. Now, the response, of course, is, well, okay, that's true, but they also, you know, they do have an incentive, like get on the margins to try to cut costs and do things as cheaply as possible. That's certainly true. Then the question becomes, is something like the, does the FAA have the right knowledge and incentives to make sure that those, you know, mistakes by the airlines are not happening, right? I mean, the fact is, airplanes do crash, we do see, you know, was M1 had an engine blow up, JetBlue had an engine blow up the other day, so stuff happens, and again, the optimal number of airline problems is not zero. It's impossible to eliminate them all. So the question here, too, becomes, what's the marginal contribution to that effort of something like the FAA, as opposed to the airlines themselves, versus what's the cost of the resources that go into it? And the same kinds of points we can make about bureaucracy in general apply to the FAA and do we know for sure that's the wisest use of those resources? It's a legitimate question to ask. Yeah, and I think it's a good question to ask, too, because you know when things are safe, the FAA and the TSA have all the incentive in the world to say, well, look at how safe things are because we're here. And it's interesting to think about what would happen if they weren't there. Would there be no nothing in place at all? And I thought that that's something that I think is worth thinking about. Reputation effects are huge in markets and especially in a world of very low communication costs like the world of the internet, right? One false move in your reputation is in trouble. I mean, just one quick example, that United a couple of years ago had that incident where they wrecked this guy's guitar or something right and he complained about it and it really took, I mean, United handled it poorly and they took a hit for it, so again, those things matter. Yeah, United breaks guitars, there is that. So I've got some good questions on deck, but what do you think the main takeaway from this discussion should be for anybody who's listening in? You have to work hard to recognize opportunity costs by looking, seeing the unseen, right? By asking what if, as compared to what, what was the next best choice, right? Where would those resources have been otherwise? All those versions of the question, right? Opportunity cost and seeing the unseen as we said at the beginning is a core concept of the economic way of thinking and to understand the real costs of choices, to recognize that those costs are opportunity costs, they're the ones that matter on the margin for the next choice and then as compared to what, right? Just cause X looks good, right? What else could we have done with those resources that might have delivered more value? Yeah, for sure. So I'm gonna launch the last poll while I take some questions and I'm just gonna come right out and ask, should we say goodbye to the TSA? Oh, it should be, hey Janet, it should have been, should we, should we say? We will not put you on a watch list. Should we say bye-bye to the TSA, right? Like the... So the first question that I have, it's more of a just kind of an interesting thing we can talk about for a minute. So Chris says, I feel that security checkpoint itself, maybe one of the most dangerous aspects of traveling an attacker before had to get on a plane to inflict mass casualty on the passenger has to. Because there are people who did like cattle, I'm just gonna quote them, with minimal to no egress routes once you enter the checkpoint, which is true. How much do you think? I mean... That's a great... This doesn't happen, but I always used to think about, I grew up outside of Detroit and the ambassador ridges there and of course all the security stuff is on the other side of the bridge. That doesn't mean that things happen, right? The ambassador bridge is still there, but do you think that this is a interesting cost that's been imposed, a new weakness in this period? I think that's a great observation, right? I mean, McCarran Airport in Las Vegas, that line is 12 rows snaking, right? If you really wanted to cause havoc at an airport, you wouldn't even have to make it to the security. I mean, you could drop some kind of poison device or something right there, right? And who's gonna stop you from bringing it into the airport? That's a great point, right? Again, I think to the degree that TSA has caused the long lines in the backup, that is a, we have to recognize that as a potential way in which the TSA has made us less safe. Before the TSA, you certainly didn't have quite the same lines and backup as you do now. So yeah, that's a really good point. Yeah, just everybody who voted, not everybody voted, but everybody who voted would like to get rid of the TSA. Yeah, well, really, who does want their stuff grabbed every time they fly? Yeah, we have a friend who makes these great stickers that are about this big and they just say the TSA touched me here. It's a fun thing to do at the airport is you just, you stick it like on your shoulder. One time they touched my ankle. I'm still a little bit confused about why. They just kind of said, we need to touch your ankle. I'm not one of these, I'm Canadian, I don't need to be on any kind of American watch list. I know that there are people who... You're already suspicious, Nielsen. But they just said, I'm going to touch your ankle. And honestly, even if I had been opposed to it, I don't know that I could have responded in any other way other than okay. And they reached down and they grabbed my ankle and so I slapped one of these stickers on my ankles and went on my way. It's not anybody's favorite bureaucracy, but a lot of people do think that it's a necessary evil even if they don't think that it's a good thing. So Andrew asks, if you have any comments on the lack of security innovation that's been caused because there's a monopoly on security under the TS? Another excellent point, right? Which is monopolies in general, in particular government monopolies, certainly prevent us from having those opportunities to explore alternatives. And yeah, I mean, we don't know what alternatives might have been developed. And by the way, that's a point about the airlines providing it. One advantage of the airlines providing security is it would enable them to compete against each other in the kinds of things that they provide and generate a discovery process about what works better and what doesn't. It would also, and here's where the economic way of thinking gets fun, it would also enable us potentially to see if people are willing to trade off security against cheaper fares, right? You could imagine an airline saying, we don't make you go through a metal detector, I mean, or we don't do this or that, but 99 bucks, right? Would people be willing to take the risk? I bet people would, I bet people would. Yeah, I mean, you always see people complaining about things like leg space and carry on. But at the end of the day, people tend to buy the cheapest fare. So it would be interesting to see if that extends to security. And of course, it's not just a matter of can you forego security or can you come up with a cheaper way, or I'm sorry, a better security. It's about finding cheaper ways to do the same thing as well. Yeah, right, and that would be what the competition would generate. No, that's a great point. So Rachel wants to know if- She always has questions. I know, do we know how much the TSA costs about per traveler? Oh, I don't know the date off the top of my head, but it would be fairly easy to find out. Someone asked, I bet if you Googled TSA cost per passenger, you'd find some data out there. Someone's done that calculation. If anybody finds it, my email address is on your screen right now. And if you send it, I will share it with everybody. And I've got another question. Nope, I asked that one already. What do you think a good way for people to know about the, do you think there would be something like Yelp for airlines in terms of security or do you think it's too much of an information barrier? No, I think you'd see something. Look, there's blogs about every single thing that airlines do right now, right? And there's no doubt that airlines would be very conscious of the way they were being perceived. And so we would see there would be money to be made by having some kind of Yelp type thing that tracked airline security. And it might even get to the point where airlines would have competitive pressure to be very transparent about what their security rules are about how they do, you don't wanna give it all away, obviously, but how they do certain kinds of things. So I suspect with real competition, we'd see real flow of information about what the airlines are doing. That's actually all the time we have tonight. I've got a couple of things that I wanna talk about before I let you guys go. This might be your first event with Fee, which is the organization that I work for as you can see by our wonderful banners, stands for the Foundation for Economic Education. If this is your first event with us, but you know someone who's been to a Fee program before, we're accepting nominations right now for the Leonard E. Reed Distinguished Alumni Award. I'm gonna send it an email after the webinar tonight and it'll have instructions to nominate someone. So if you know someone who went to one of these programs and maybe they recommended this to you tonight or maybe you know them through another way or maybe this isn't your first program with Fee, definitely think about recommending them for that kind of award because Fee is kind of a cool organization and for those of us who have been involved for a long time, it would be a neat organization to get recognized by. So definitely think about that. Larry Reed, who's the president of Fee, is also going to be on liberty.me tonight at nine o'clock. So if you just haven't had enough Fee tonight, you can pop over to Liberty Me once we're done. I'm sorry, I've got a little bit of a weird line break that didn't happen before I was presenting it, it's nine p.m. tonight, in case that's not clear and we'll be back on October 14th with Mike Munger of Duke University and we're going to be talking about what about the poor? We're gonna be talking about institutions and the poor, which is one of my favorite topics. I think that it's, if you really care about poverty and trying to make people better off, I think that I'm gonna be talking with Mike about some interesting ways that you may not have thought of before. So I hope that you'll join us. I will also be sending out the registration link for that in the email. So I wanna thank everybody for coming tonight and I wanna thank Steve so much for appearing not only once but twice on Big Ideas Live. My pleasure, glad to be here. Thanks Janet. Good night everyone. Anytime.