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Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

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Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

unofan said:
Back then, the republicans were liberal and the democrats were conservative. The parties didn't switch to their present day ideologies until the 60's; when southern democrats left in droves over civil rights legislation. (And more specifically, their opposition to it).

It's also amusing to hear you talk about ideological purity regarding the party that isn't the gop. While there are certainly instances of dems being primaried lately, they've got nothing compared to the purge currently taking place within the GOP.
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Quite the opposite, actually. The democrats were still liberal and the republicans (whigs and federalists if you want to go back that far) were still conservative (consider how John Adams wanted to keep a number of traditions that the Tories enjoyed). It's more the definition of liberal that has really changed, and is probably why the term "libertarian" has arisen, because the classic "liberal" term really has been misconstrued.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Alright, so I saw this was happening in Boston: http://www.foxnews.com/travel/2013/04/16/airlines-respond-to-boston-bombings-with-fee-waivers/

This has to be, quite possibly, the worst business decision ever. Sure, I get that there was an extenuating circumstance, but this goes back to my old adage of, "You want it? You got it, and everything that goes with it." The airlines set up change fees. This sort of situation is exactly how you make up for the loss in customers that don't wish to have change fees, and now you're giving it up? Sure, it was created by fortune, but these companies are completely dumb to waive their changing fees from a business perspective. If you're going to spend the money to put them in, leave them in! Don't all of a sudden reneg and then decide to put them back in just because of some extenuating circumstance. And what do you get out of it? Maybe 2 days of good will? I guarantee that a month later, even if one company decided not to waive the changing fee, no one would be talking about it, and people would continue to use that airline. They complain, yet they remain.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

FlagDUDE08 said:
Alright, so I saw this was happening in Boston: http://www.foxnews.com/travel/2013/04/16/airlines-respond-to-boston-bombings-with-fee-waivers/

This has to be, quite possibly, the worst business decision ever. Sure, I get that there was an extenuating circumstance, but this goes back to my old adage of, "You want it? You got it, and everything that goes with it." The airlines set up change fees. This sort of situation is exactly how you make up for the loss in customers that don't wish to have change fees, and now you're giving it up? Sure, it was created by fortune, but these companies are completely dumb to waive their changing fees from a business perspective. If you're going to spend the money to put them in, leave them in! Don't all of a sudden reneg and then decide to put them back in just because of some extenuating circumstance. And what do you get out of it? Maybe 2 days of good will? I guarantee that a month later, even if one company decided not to waive the changing fee, no one would be talking about it, and people would continue to use that airline. They complain, yet they remain.
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Really don't agree with you here but I may be misinterpreting your intent. Charging people change fees because they were unable to fly due to a bombing would be a PR nightmare. If you were supposed to fly out of Boston on specific dates and can't (my co-worker was able to fly out today with no issues) then it may be due to the bombings. For the few who could take advantage of it unnecessarily, there would only need to be one instance where your airline charged a fee for a person who had a family member injured for the media to make you wish you'd never even heard of a change fee much less the loss of income.

There were people unable to get into their hotels, people trying to find friends etc...if one of those people needed to change a flight, it would be worth it to waive it.

Now, you may be pointing out how the airlines advertise the waiver. They could just tell their reps to waive any fees if they are asked to change flight times on the dates in question. Instead, they all try to beat the other guy to the punch by being the first to waive fees. This is common for other issues such as natural disasters, companies like banks, airlines etc. not only have a template ready but they monitor what competitors are doing...nobody wants to be the least helpful company after a hurricane.
 
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FlagDUDE08 said:
Alright, so I saw this was happening in Boston: http://www.foxnews.com/travel/2013/04/16/airlines-respond-to-boston-bombings-with-fee-waivers/

This has to be, quite possibly, the worst business decision ever. Sure, I get that there was an extenuating circumstance, but this goes back to my old adage of, "You want it? You got it, and everything that goes with it." The airlines set up change fees. This sort of situation is exactly how you make up for the loss in customers that don't wish to have change fees, and now you're giving it up? Sure, it was created by fortune, but these companies are completely dumb to waive their changing fees from a business perspective. If you're going to spend the money to put them in, leave them in! Don't all of a sudden reneg and then decide to put them back in just because of some extenuating circumstance. And what do you get out of it? Maybe 2 days of good will? I guarantee that a month later, even if one company decided not to waive the changing fee, no one would be talking about it, and people would continue to use that airline. They complain, yet they remain.
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That's it. You're officially going on ignore. Theprofromdover nailed it; You really are a sociopath incapable of empathy. No wonder you have women problems. You're more concerned with lost profits than getting people home following a disaster. Enjoy your life of bachelorhood, conspiracy theories, and unfulfilled libertarianism, you farking wanker. And I hope you never find yourself in unexpected trouble, because it'd take Mother Teresa herself to give you any help. I sure as hell wouldn't.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

pirate said:
Really don't agree with you here but I may be misinterpreting your intent. Charging people change fees because they were unable to fly due to a bombing would be a PR nightmare. If you were supposed to fly out of Boston on specific dates and can't (my co-worker was able to fly out today with no issues) then it may be due to the bombings. For the few who could take advantage of it unnecessarily, there would only need to be one instance where your airline charged a fee for a person who had a family member injured for the media to make you wish you'd never even heard of a change fee much less the loss of income.

There were people unable to get into their hotels, people trying to find friends etc...if one of those people needed to change a flight, it would be worth it to waive it.

Now, you may be pointing out how the airlines advertise the waiver. They could just tell their reps to waive any fees if they are asked to change flight times on the dates in question. Instead, they all try to beat the other guy to the punch by being the first to waive fees. This is common for other issues such as natural disasters, companies like banks, airlines etc. not only have a template ready but they monitor what competitors are doing...nobody wants to be the least helpful company after a hurricane.
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Maybe it's just me, but it just exposes the idiocy of nickel-and-diming of many airlines. I'm not sure if Southwest flies to Boston, but if they do, I'd use this as their PR advantage. They've constantly had their selling point as no nickel-and-dime fees. They can show that, on April 22nd, they're still not going to charge those fees, because they never had them in the first place.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

FlagDUDE08 said:
Maybe it's just me, but it just exposes the idiocy of nickel-and-diming of many airlines. I'm not sure if Southwest flies to Boston, but if they do, I'd use this as their PR advantage. They've constantly had their selling point as no nickel-and-dime fees. They can show that, on April 22nd, they're still not going to charge those fees, because they never had them in the first place.
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They already run those commercials. They already have them, and they don't have to use a public tragedy as a marketing gimmick.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

FlagDUDE08 said:
Maybe it's just me, but it just exposes the idiocy of nickel-and-diming of many airlines. I'm not sure if Southwest flies to Boston, but if they do, I'd use this as their PR advantage. They've constantly had their selling point as no nickel-and-dime fees. They can show that, on April 22nd, they're still not going to charge those fees, because they never had them in the first place.
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SW has a different posture on many facets of their business and used to have a substantial advantage in the category of overhead per seat (or some such measurement). So, they can afford to forego fee revenue that others need to meet the same ratios. In times of suppressed fares, a company with fee revenue may see some benefit as a percent of their planned revenue comes in via 'fixed' fees and a company with no fees has no other lever to pull.

I can't say what % of revenues come to airlines via fees, and I can't say to what degree the fee is really a deterrent to people making flight changes that would leave planes less full or screw up pricing on the remaining seats. If the fees are used for the latter I'd say that is an inefficienct way to address other issues.

Of course, SW screws up its fule price hedges and they may wish they had more fee revenue. At least the other airlines can reduce or waive fees to massage passenger volumes and revenues, SW has the very thick line in the sand regarding no fees.

so far it is working for them and they are doing quite well.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

pirate said:
SW has a different posture on many facets of their business and used to have a substantial advantage in the category of overhead per seat (or some such measurement). So, they can afford to forego fee revenue that others need to meet the same ratios. In times of suppressed fares, a company with fee revenue may see some benefit as a percent of their planned revenue comes in via 'fixed' fees and a company with no fees has no other lever to pull.

I can't say what % of revenues come to airlines via fees, and I can't say to what degree the fee is really a deterrent to people making flight changes that would leave planes less full or screw up pricing on the remaining seats. If the fees are used for the latter I'd say that is an inefficienct way to address other issues.

Of course, SW screws up its fule price hedges and they may wish they had more fee revenue. At least the other airlines can reduce or waive fees to massage passenger volumes and revenues, SW has the very thick line in the sand regarding no fees.

so far it is working for them and they are doing quite well.
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Not to mention that nearly-half-cent quarterly dividend, one of the few airlines to issue one.

As for the fees, I only have to assume that money was being lost somewhere, so they felt they had to make it up, similar to certain political pundits' knee-jerk reaction to raise taxes to cut a deficit.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I've been studying economics for awhile, and the following quote is a perceptive view of the marketplace that I'd never heard before, that actually employs a sophisticated psychological insight. I'm going to withhold the author's name (for now) because I'd never have expected this insight from him given his reputation; and I don't want people ignoring the significance of what he said because of their prejudices over who he is.

The only way to uphold market freedom is to show people that the market doesn't succeed because of greed. For the truth is just the opposite.

The market succeeds because it gives people incentives to put their own wants and needs aside to address the wants and needs of others. To succeed, you have to produce something that other people are willing to pay for. [emphasis in original]
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He then goes on to excoriate "crony capitalism" as the absence of a free market and calls it pure "cronyism" instead, after which he cites Arthur Brooks: "Fairness [is] the universal opportunity to enjoy earned success."



First, I have to quibble a little, the market succeeds in a way because of greed, unlike what he said in the first line, but it does succeed despite greed because of a profound psychological principle called "sublimation." (which has nothing to do with going directly from solid to gas).

"Sublimation" is a process by which one takes what is generally seen as a "negative" emotion and turns it into a positive motivating force. If you are merely "greedy" you lie, cheat, steal, take things from others you didn't earn. If you are both greedy and moral, you sublimate your greed into producing something that others want so that they will buy enough of it to make you well-off.

Another example of sublimation is with anger: anger can often lead us to treat others badly; a way to turn it into a positive motivating force is to transform it into pity. Or you use sublimation to take lust and turn it into seduction.

Anyway, the idea that greed + morality = self-discipline + success in the market was a new one for me.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Greed isn't often the term used by economists, unless it's someone trying to make a splash. Rather, economists prefer the term self interest. Using a healthy self interest, it will motivate me to attain income. The only way for me to attain an income, either by selling my labor or a specific product, is to satisfy the self interests of others. It's in my self interest to earn as much money as I am able. It's in the self interest of my employer not to get ripped off. So if I cheat my employer, I work against his/her/its interests, and therefore become unemployed. Therefore, it's in my self interest to act honorably towards my employer. The same rules apply to retailers and manufacturers who wish to remain in the marketplace for the long haul, only change a few terms like my labor to shopkeeper or manufacturer, and the employer in this case would then become the customer.
 
St. Clown said:
Greed isn't often the term used by economists, unless it's someone trying to make a splash. Rather, economists prefer the term self interest. Using a healthy self interest, it will motivate me to attain income. The only way for me to attain an income, either by selling my labor or a specific product, is to satisfy the self interests of others. It's in my self interest to earn as much money as I am able. It's in the self interest of my employer not to get ripped off. So if I cheat my employer, I work against his/her/its interests, and therefore become unemployed. Therefore, it's in my self interest to act honorably towards my employer. The same rules apply to retailers and manufacturers who wish to remain in the marketplace for the long haul, only change a few terms like my labor to shopkeeper or manufacturer, and the employer in this case would then become the customer.
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Clown this is straight out of a textbook but has little practical application in the real world.

For example, as we've seen in business, your desire to maximize your income coupled with few to no penalties if you take unnecessary risks with other people's money throws your theory out of whack. So you get fired (the consequence in your statement). But, you walk away with a few million dollars. Gee...is getting fired really so bad, or do the millions kinda ease the pain a bit?

Likewise, you could also make a self serving business deal but then transfer the risk of it to someone else. Writing bad mortgages and then packaging them and selling them comes to mind.

There's a reason why economists either work in 1) the classroom, or 2) partisan think tanks. The whole profession is built on BS and unrealistic theories.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

St. Clown said:
Greed isn't often the term used by economists, unless it's someone trying to make a splash.
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Exactly, "greed" is a term used by polemicists. The author I cited was writing a general article for regular people trying to refute said polemicists. Freedom and property rights are essential underpinnings for a free market and both are under attack these days by demagogs trying to manipulate public opinion. Defenders of freedom and property rights need to move beyond academic arguments into winning the hearts and minds of regular people and his article was an attempt to shift the dialog away from the classroom and into the popular dialog.

it also was an example of conservatives vs Republicans: crony capitalism is practiced extensively by both parties while conservatives decry it no matter who practices it.
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Rover said:
Clown this is straight out of a textbook but has little practical application in the real world.

For example, as we've seen in business, your desire to maximize your income coupled with few to no penalties if you take unnecessary risks with other people's money throws your theory out of whack. So you get fired (the consequence in your statement). But, you walk away with a few million dollars. Gee...is getting fired really so bad, or do the millions kinda ease the pain a bit?

Likewise, you could also make a self serving business deal but then transfer the risk of it to someone else. Writing bad mortgages and then packaging them and selling them comes to mind.

There's a reason why economists either work in 1) the classroom, or 2) partisan think tanks. The whole profession is built on BS and unrealistic theories.
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Then remove the safety nets for these corporations. Corporation chiefs will be much more watchful of the company's money if they know there's no bailout. You want to reduce overly risky behavior in the mortgage markets? Remove the government insurers behind it (FNMA, GNMA, etc.). So long as we socialize giant losses and privatize profits, you will find people acting with fewer inhibitions. We the people, through our government, are unintentionally inducing moral hazards by removing or reducing the consequences of bad actions.

As a side question, the people who were heading up the Lehman Bros and Bear Stearns, what are their employment prospects once they leave these companies? how many of them are employed currently? If they are employed, how did they get those jobs?
 
St. Clown said:
Then remove the safety nets for these corporations. Corporation chiefs will be much more watchful of the company's money if they know there's no bailout. You want to reduce overly risky behavior in the mortgage markets? Remove the government insurers behind it (FNMA, GNMA, etc.). So long as we socialize giant losses and privatize profits, you will find people acting with fewer inhibitions. We the people, through our government, are unintentionally inducing moral hazards by removing or reducing the consequences of bad actions.

As a side question, the people who were heading up the Lehman Bros and Bear Stearns, what are their employment prospects once they leave these companies? how many of them are employed currently? If they are employed, how did they get those jobs?
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Clown the safety nets have nothing to do with it. The mortgage originator who wrote and sold the bad loan doesn't care if its the govt, the mob, or the archdiocese who ultimately ends up on the hook for the thing. He got his money and the rest is someone else's problem. That's what happens with no regulations.

Likewise, nobody bailed out Enron or Worldcom, but a lot of people lost their entire savings because of the deceptive practices of management who was lining their pockets at the time. You're operating under some ancient notion that the people hired to run these companies are completely invested in their long term health. They're not in many cases and trying to pretend they all are is absurd. Unfettered, unregulated markets only works in fantasyland. Otherwise the people running the company/hedge fund/fertilizer plant/oil rig/etc have an advantage over everybody else in that they can manipulate the company earnings in ways only known to themselves and not the general public, boost short term results, make a killing on compensation, and then take off before it blows up.

Lastly, your statement about whether these people are working or not is terribly naive. Yes, in many cases they DO get other jobs (the former Merrill boss comes to mind) or they go the way of disgraced junk bond trader Michael Milken. He stole over a billion dollars, and got fined 500M and sent to Club Fed for 5 years. Hmmm...by my count that means he got paid 100M for every year he spent in jail since he kept the rest of the money. What does he care if he never works again (and for the record I think he's on the lecture circuit now).
 
Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Rover said:
Interesting. Looks like deficit is shrinking after all. From the uber-liberal CNBC :rolleyes:

http://www.cnbc.com/id/100686709
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What do you know, the amount of money the country was in the hole for the year decreased from FY 2011 to FY 2012, too. http://www.davemanuel.com/history-of-deficits-and-surpluses-in-the-united-states.php

Big whoop. In the 51 months Obummer has been President, how many times has a surplus been reached in a month? Three. I'd assume we'd have a fourth for this month (if you can't figure out why, you don't know anything about this country), but even the messiah dictator could figure out how to run a deficit in April (he did it thrice), and that hasn't happened since Bonzo did it in '83 (data only goes back to October of 1980). You'd think they'd be able to control their spending (I'm not going to complain TOO much about February/March, even Clinton couldn't pull that off), but before you get all giddy and wet your pants, let's see if they can pull off a profitable quarter.
 
FlagDUDE08 said:
What do you know, the amount of money the country was in the hole for the year decreased from FY 2011 to FY 2012, too. http://www.davemanuel.com/history-of-deficits-and-surpluses-in-the-united-states.php

Big whoop. In the 51 months Obummer has been President, how many times has a surplus been reached in a month? Three. I'd assume we'd have a fourth for this month (if you can't figure out why, you don't know anything about this country), but even the messiah dictator could figure out how to run a deficit in April (he did it thrice), and that hasn't happened since Bonzo did it in '83 (data only goes back to October of 1980). You'd think they'd be able to control their spending (I'm not going to complain TOO much about February/March, even Clinton couldn't pull that off), but before you get all giddy and wet your pants, let's see if they can pull off a profitable quarter.
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Flaggy I say again I think if you got some female companionship you'd be less angry out here. Regardless of who gets the credit/fault at some point normal people would acknowledge a shrinking deficit from previous years is a good thing, which is not mutually exclusive with the idea that deficits need to come down even further.
 
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