Tag Archives: Capitalism

More On Airlines Saving Money

Last I spoke about airlines I discussed the fact that we are seeing such problems is because we consumers are what folks often call “greedy.”

 Now I’m sure that we’re gonna get the usual hand-wring about greedy airlines and all sorts of nonsense about corporate profits.  But what we DON’T point out is the insatiable greed of the consumer.  It’s the consumer that has this never ending desire to find the absolute cheapest fare on the internet.  What with Orbitz, Amazon, Expedia and everything, the consumer is driving the airlines to produce the lowest possible basic fare so that they appear near the top in search windows.

Airlines are trying to make a buck in the same way that all companies are trying to make a buck.  Your company tries to make a profit.  The company you work for tries to make a profit.  Heck, even you as a family unit tries to make a profit.  You hope that your income is more than your expenses.  And one way to do this is to reduce your expenses.

Turns out that airlines are doing just that.  Doing that by getting rid of the old and ushering in the new: via Carpe Diem

Singapore-based Scoot Airlines is ripping out aircraft entertainment systems weighing more than two tons to save fuel, and instead offering Apple iPads to passengers, loaded with movies, music, games and television shows. It eventually intends to have users access content via a wireless system onboard planes.
Offering iPads helped the carrier cut 7% off the weight of planes and cope with fuel prices that have jumped about 36% in two years. The budget carrier will  offer the iPads free to passengers in its business-class seat and  will charge economy passengers $17 per trip to rent the tablets.

By saving money the airline is actually saving the consumer money AND increasing their inflight experience.

 

Free Market: Airplane Style

How many times have I been flying and need to get off that plane to make my gate?  Plenty.  And how many times did I muse, “I’d pay $50 to be that first guy off?”

Again, plenty.

And, as is the case with me, I began to imagine a world where the seats in a plane could be offered on the open market.

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Obama – Forward

 

Obama has unveiled his new campaign logo and slogan.  I have to admit, I like what Obama has done with both such slogans.  In both cases they are but a few words; Hope, Change and now Forward.  And more importantly, they are action words, something that we do.  However, on the downside, change, like forward, are actions that don’t necessarily mean positive progress is being made.  Obama is definitely a change, but I don’t think you’ll find a majority of Americans who think that he has been positive change.

All in all, I think Forward is better than it is worse.  At first blush.

But dig a little deeper….

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Food And Medical Care

During the hearing of Obamacare, the news was full of analysis.  One of those pieces, in the “USA Today”, made a point that food is more of a basic need to people than healthcare:

A brief submitted by 215 economists argues that food is even more basic to survival than health care…

I was struck by this last night as I was cleaning out some of my “stack” in my office last night.

See, the food delivery market, while not perfectly so, is a free market example of how goods can be distributed efficiently.  Based on demand and the profit motive, food stuffs are delivered to a literal market where individual shoppers are allowed to “ration” themselves based, in part, by how much money they have and what types of services they want.

For example, in my market I can by generic chicken soup, Ramen noodles and rice.  Or, I can walk 50 feet away and purchase hand rolled sushi, fillet mignon, $60 wine and lobster.

As a real example of the power of markets I picked up this flier:

For $5, this profit driven market is offering a meal that feeds 4 people, perhaps more if the kids are younger.

If medical care were subject to the same market forces you would see the same thing happen with the cost of medical care.  In the same way, if you allowed health insurance to be impacted by the same market forces, you would see prices of health insurance react in the same manner.

It’s only when government intercedes, by mandating acupuncture coverage, or by restricting the sale of insurance polices across state lines, that you see the price of a good or service go up.

Poverty: Reducing The Number Of The World’s Poor

It’s not easy bein’ an American worker these days.  There’s a lot of pressure coming from around the world; folks wantin’ our jobs, willing to work for less money than we’re workin’ for.

It’s hard being an America sometimes.

But there’s an upside.  For the folks who care about such things, the world’s poorest people, people living a life exactly like their parents, grandparents and ancestors have lived for generations, are finally emerging from poverty.  Perhaps for the first time ever, families are leaving the shackles of poverty and rising towards the hope of a middle class, perhaps dare I say, even more.

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Halftime In America: Another Take

Chrysler built an amazing ad shown during the Superbowl.  First, the ad is well done and carries a powerful message.  The imagery, the script and the actor; all perfect.  Second, the ad is a marketer’s dream come true.  I’m sure the ad itself has been shown and viewed more than a couple of multiples of the views it had during the Superbowl itself.

Brilliant.

But is it accurate?

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Mitt Romney: Vulture Capitalist

Romney is wealthy; hell, he is loaded.  And I think it’s gonna present him some problems:

It seems that this lack of any real financial struggle has made Romney tone-deaf in what he says about people and money. This fault is Romney’s veritable Achilles heel.

Romney has to acknowledge and accept that this charge will be leveled against him.  He has to be prepared for it, plan for it and practice for it.  I think he will.  And there is plenty of good reason for him to defend himself and his occupation:

…the direct employment losses that result from private-equity deals are not as large as critics claim: on average employment declines by only 1% two years after a buy-out, once the jobs created at new facilities are counted. Such shifts in employment are part of the creative destruction that invigorates the economy, and if private equity hurries the process along, that is all to the good. The evidence suggests that it does. Private-equity buy-outs tend to increase productivity—by around 2%, on average, according to one academic study. If firms become more efficient, the economy works better. Resources will be reallocated where they can better be used.

Romney needs to embrace the free market capitalism that Obama attacks.  Romney need to accept the label of capitalist and instead, turn it around and label Obama as the statist that he he is.

There is no shame in taking a corporation that’s struggling and turning it around by, in part, trimming the work force only to hire more productive and able staff in the near future.

Romney needs to celebrate this, not hide from this.

Capitalism And Greed

With all the talk about corporate greed and abuse and the failings of capitalism, I think it’s important to point out that not everything done in the name of wealth accumulation is “good and great” to the capitalist.  There still is the explicit expectation that law and order rule the day.  That contracts are acknowledged.  That there be enforcement of those contracts.  That property rights exist.  And again, that the protection of those rights is guaranteed by the state.

There are bad actors in capitalism.

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Incentives Matter: The Power Of The Entitlement Society

Incentives matter.  Obvious when stated but almost always forgotten when policy is considered.

Give away money when an individual doesn’t have a job?  A perfectly valid idea; who doesn’t wanna help those facing unexpected difficulty?

Give away food to the individual who may not have enough?  Again, absolutely warranted for those in need.

But what does it do to a society that grows up learning that to work, or not to work, often times results in the same short term result?  When the concept of individual achievement is removed, squashed?  What happens then?

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Free Market: Microsoft Office

The latest iteration in the market delivering goods and services at the lowest price possible:

This week, Onlive Inc., in Palo Alto, Calif., is releasing an app that brings the full, genuine Windows versions of the key Office productivity apps—Word, Excel and PowerPoint—to the iPad. And it’s free. These are the real programs. They look and work just like they do on a real Windows PC. They let you create or edit genuine Word documents, Excel spreadsheets and PowerPoint presentations.

When allowed to roam free, the market will solve virtually any problem you can think of.