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That’s the Spirit

When I see things like this I literally get chills up my spine.   It is sometimes shocking to see how drastically ignorant otherwise intelligent people like Shepard Smith can be about economic principles which I take for granted since it is what I spend every day thinking about.  I was going to write a post explaining why charging for bags is more efficient than not charging for them but this story pretty much sums it up so I will use the space to rant about how this illustrates everything that is wrong with the attitude of our government. 

First consider what would happen here in a free market.  I would fly Spirit Airlines because it is more efficient, and Shepard Smith would fly some other airline because he’s an idiot.  Ok I kid, I don’t know why Shepard Smith doesn’t like the policy and it would be presumptuous of me to claim that I did.  But the beauty of the free market is that there is no reason for me to go around trying to divine other peoples’ motivations for what they do.  I can just ride my airline and he can ride his and we can both be happy and there is no reason for us to care what each other does.  If everyone hates bag fees, then Spirit will go out of business.  If everyone prefers them then other airlines will adopt it or they will go out of business.  You see in a free market there is an incentive to do things more efficiently.  One major factor in the efficiency of a transaction is the structure of the contract, and in a free market there is an incentive for people to come up with creative contracts to make transactions as efficient as possible.  So what is Chuck Schumer afraid of?

There is a deep dark secret that progressives don’t want you to realize.  The secret is that thoughtful people can solve pretty much any problem that government can solve through careful contracting.  If we understood that, we wouldn’t need Chuck Schumer.  The way they keep us from noticing that is by restricting the contracts we are allowed to enter into for ridiculous reasons.   Recall that this is exactly what they did with health insurance.  They had to tie the hands of insurers in order to create a “crisis.”  If they had been left alone, they would have been able to deal with it themselves and we wouldn’t need the government to get involved. 

The ridiculous reason is always some sort of unspecified moral objection to a voluntary trade.  Notice that Shepard Smith never mentions any well thought-out reason why Spirit Airlines and I shouldn’t be able to enter into the type of contract in question.  He just takes for granted that it is morally objectionable and goes on laying into the guy for offering it to me.  They expect us to not question whether this moral code makes any sense and just take for granted that they are looking out for us and the person they are attacking is trying to screw us somehow by tricking us into entering into a voluntary agreement. 

If you were to ask Chuck Schumer why we should be afraid of this, he would probably say something like that.  The big bad airlines are preying on uninformed consumers.  But when they say things like this, they are calling you an idiot.  This is saying that you are too stupid to understand the difference between a $100 ticket with no bag fee and a $50 ticket with a $40 bag fee.  Don’t you think you could navigate that intellectual minefield on your own without the help of Chuck Schumer?  But this isn’t the really insidious part. 

The real damage is not done when they treat us like idiots.  It is done when they say “you’re an idiot, but it’s ok I will take care of you.”  Because then there is no incentive to stop being an idiot.  How many times are you going to get “tricked” by hidden bag fees?  Unless you’re really dim, it’s either 1 or 0.  I got tricked once.  I don’t fly much.  The second to last time I flew, there was no fee for a checked bag.  The last time I flew (which was years later) I checked a bag and they charged me $25.  Then while I was waiting to board, they announced over the intercom that if anyone had a large carry on they would check it for free.   So when I flew back I carried my check bag up to the gate and gave it to the flight attendant who checked it for free.  I lost $25 but I got smarter.  My behavior adapts to the structure of the contract.  When I do this, the contract should adjust to my behavior.  If they want to achieve the efficient amount of baggage through fees on checked bags, people will adjust by carrying on more luggage.  The natural reaction to this is to charge for carry-on luggage.  This process is becoming more efficient not less.

Next time I fly, I will think about these things in advance.  When everyone learns to think about these things in advance, the process becomes more efficient.  When the government restricts contracts to what we are used to because we are scared of change, they are halting the progress toward efficiency.  When we learn that we don’t have to think about it in advance and if anything we don’t like happens, Chuck Schumer will come to the rescue, they go in the other direction.  The more it goes in the other direction, the more we run to government to fix it.  In the end the only one who benefits from this is Chuck Schumer.

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Categories: Uncategorized
  1. May 15, 2017 at 2:11 pm

    diniobsp;:Bonst&r je participe !Sinon, j’utilise le dissolvant mousse Sephora et je dois dire que mes ongles ne sont pas top. Je vais essayer le Nocibé que je ne connaissais pas. Merci

  1. November 20, 2010 at 9:37 pm

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