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AA’s excessive luggage fee- Brief critique on capitalism- Market forces

2008-05-22T14:39:00.000-07:00

So now American Airlines is charging passengers $15 for their FIRST piece of luggage. What does that mean for American Airlines? What does that mean for passengers? What does that mean for the market? How could American Airlines have miscalculated the cost of fuel so poorly that they were forced to take such drastic measures? Were the fluctuations in fuel prices really that unforeseen? Are other airlines getting ready to do the same thing?

American Airlines should probably get ready for more financial dents, because I don’t think these measures are going to help their financial status. The first way to lose customers is to unfairly pass on additional costs to them. American Airlines made the miscalculation mistake, not the consumer. Only the American Airlines pocket should be taking a hit from this unfortunate circumstance. I’m sure the American Airlines chief officers are making a hefty salary, and could afford a substantial pay cut to alleviate some of the corporations financial worries. But of course they won’t be doing that. How could we expect the chief officers to take one for the team? Instead they are passing the cost on to the laborers that they are laying off and the consumers who are being charged additional fees.

This type of behavior is what causes the capitalist system we have in place to fail. Capitalism can work for everyone and be a good thing for the economy if it is exercised correctly. But when it isn’t, situations like this occur. The chief officers exploit the labor of their working class staff by extracting the surplus value that these workers create. Instead of reinvesting all of the surplus value into the corporation to insure the sustainability and security of the corporation, these chief officers cut bigger paychecks for themselves and improperly handle the distribution and allocation of the remaining value. This will inevitability lead to taking drastic measures during economic downturns such as firing hard workers and excessively charging consumers. If the surplus value had been handled appropriately and allocated adequately, the corporation would have the secure base and ability to function normally even in economic downturns.

Thankfully for consumers, we have other players in the market besides American Airlines. There may initially be some fear that other airlines will follow American Airlines’ lead and begin excessively charging consumers as well. However, consumers should not fear this for the following reasons. First of all, if other airlines are appropriately handling their surplus value and are making the proper calculations and speculations for the cost of fuel amongst other cost, there should be no reason for them to start playing this game that American Airlines is playing. If they do, they are simply being motivated by greed and will fail to successfully exploit consumers for the following reasons. The markets we have in place in this capitalist system are set up to ensure perfect competition. Of course, perfection competition is merely a theoretical concept, but its principles are applicable in practical implementation. Basically if American Airlines and others attempt to exploit the market by cutting flights and charging excessive fees, they will cause shifts in the supply and demand curves. This will move the supply and demand intersection point away from its optimal location and thus cause new players to enter the market or cause the other current players to change their current behavior and drive the supply and demand curves back to the optimal location.

Sorry for all that Microeconomics 001 nonsense, but to put it simply, if American Airlines charges excessive fees, there is always a competitor in the market who won’t charge these excessive fees. This competitor will attract some or all of American Airlines former customer base. If the competitor attracts enough of Americans Airlines customers, American will be forced to either drop their excessive fees or risk the possibility of going out the business. That is how our market is supposed to function. It is designed to weed out the weak or incompetent players. It’s very similar to Darwin’s theory of evolution and the survival of the fittest. So, current and/or former American Airlines customers, my message to you is: don’t worry too much. This only a phase and it will pass. Use another airline for now. Unless American Airlines plans on going out of business, they will realize soon enough that these measures are bad for business and they will make the proper adjustments. Don’t agree with me? Was my economic analysis off? It could have been off; I didn’t really like Microeconomics 001? Anyways, if my facts are off or if my opinions are radical, let’s fix that. Let’s Deetrio.

McCainPedia: Is the name deceitful?

2008-05-21T14:40:00.000-07:00

McCainPeida is a wiki based website formed by the DNC. This is an innovative way to drive the campaign against McCain forward. Is it right to call this site a “pedia” as in encyclopedia? The use of “pedia” conveys a sense of objectivity, but I am sure this site is far to the left of objectivity. The use of “pedia” distorts the viewers perspective of what is actually being displayed. I have no problem with the DNC making this website. They are exercising their first amendment rights and it is a part of the game of politics. I do think it is deceitful that they are calling it McCain (“Pedia”), however, because their messages will clearly be subjectively based. A true “pedia” would give both sides of the topic. It would have to allow the GOP to contribute to make it a true “pedia”. A more appropriate name for the site should be McCainSlamBook. At least then, readers would immediately know that they are being subjectively informed. If the GOP created a website called Obamapedia I would hold the same stance. There is actually an Obamapedia on the web, but it doesn’t seem to be sanctioned by an official government related entity, thus I don’t hold it to the same standards that I would a DNC or GOP. These entities are held to a higher degree of responsibility with regard to truth in presentation and intentions. Don’t agree with me? Let’s Deetrio.

Who's fair game?

2008-05-20T21:38:00.000-07:00

Is it fair to target a politician's family when administering substantive criticism? What if the family member is openly speaking out in the political arena; is it fair then? Well, Michelle Obama has been the recent target of politically charged attacks and this raises the ethical concerns. Is this dirty politics? Barack Obama surely thinks so. He's right. It is dirty . Is it unfair? No. Why? You can see my take on the situation in the comment I left for the YouTube Video below.

My Comment on YouTube:
"Maybe Michelle shouldn’t have put herself out there. Stiff competition makes politics a very dirty game and that is unfortunate. I do not advocate political smear attacks. I think they are unnecessary and only distract us from the true issues. Once you decide to put yourself out there, however, sometimes you have to live with the consequences that arise. Michelle is just going to have to deal with it, stay strong, and reconsider her actions the next time she thinks about going public."

Feel free to disagree with me. In fact, I want to know what you think if you do disagree with me. Let's deliberate the facts of the ethics of politics and who is fair game. We'll discuss our various opinions. If I was wrong, I'll discover the truth. Let's deetrio.

What does the "e" in ebay stand for?

2008-05-19T14:47:00.000-07:00

Today I was on wikianswer.com, and I ran into a question that asked what the "e" in ebay stood for. Someone had replied that the "e" stood for "electronic". I immediately knew that this answer was incorrect and I corrected it. According to wikipedia, the "e" actually stands for "echo". I also viewed a video clip that confirmed this view:

When I thought about it, however, the answer the other person had written seemed very plausible as well. As a matter of fact, it makes more sense when you think about it literally. If the "e" in ebay stood for "electronic", it would work because ebay is , in a sense, an electronically based auction environment. The idea that the "e" stands for "echo" is not immediately apparent because the literal definition of the term "echo" has no direct relationship to the actual functionality of ebay. I am also basing my stance on this topic solely off of two secondary sources. Have you already formulated a stance? If you have, you are basing your stance off of at least one secondary source (ME). Use the search box below to search for the facts and opinions surrounding this topic. Deliberate the facts, discuss the opinions with others or within yourself as I did, and discover the truth. Don't just understand that the "e" stands for "echo". Understand why the "e" stands for "echo". Or, if you choose to believe that the "e" does not stand for "echo", understand why. If you had already formulated your view on the "e" in ebay prior to reading this post, why did you read this far?