Political Irony

Last week, new guidelines from the US Department of Transportation went into effect regarding advertising of airfares. The guidelines are designed to get rid of widespread deceptive practices in the transportation industry, most notably the practice of advertising impossibly cheap airfares and then tacking on huge mandatory fees just before you pay. It had gotten so bad that in some cases the fees were larger than the advertised price.

The new rules also require airlines to give customers 24 hours after purchase to change or cancel a flight reservation without paying a fee (as long as the trip does not start within seven days). Airlines must also disclose baggage fees at the time of purchase, and must notify passengers promptly about flight cancelations, diversions, or delays greater than 30 minutes. So no more sitting around in an airport wondering what happened to your flight that was supposed to leave two hours ago.

As someone who travels frequently, this is wonderful. It used to drive me crazy shopping for flights, since advertised prices often bore little relationship to the actual cost of the ticket and it was a lot of work to compare prices from different airlines. Even the Wall Street Journal applauded the new regulations, saying they give “a bit more common sense and consumer fairness” in the air-travel industry.

But that didn’t stop Congressman Tom Graves (R-GA) from announcing plans to introduce a bill to overturn the new rules. His reason? He claims the new rules limit the consumers’ ability to see how much they are getting taxed. Of course, that is a complete fabrication, since the rules do not limit in any way an airline’s ability to break down the advertised (total) price. In fact, most airlines already do that. And just how is the old practice of advertising prices that do not include any taxes or fees help consumers see those taxes? Pure BS.

And at least one airline is upset about the new rules. Spirit Airlines posted a banner on their main web page that says “Warning: New government regulations require us to HIDE taxes in your fares.” Again, pure BS, since Spirit already breaks out those taxes. Spirit is also contesting the new rules in court. Of course, Spirit was one of the worst with deceptive practices. They would advertise very low ticket prices, but the ticket did not even include a seat, which cost more (and was required — no standing in the aisles!). They also charged a $5 fee to print a boarding pass, $40 for a carry-on bag, charged for all drinks (including water) and snacks, and at one time was even considering a charge to use the bathroom.

For example, Spirit used to advertise a price of $71 for a flight from Fort Lauderdale, FL, to Las Vegas, which works out to $142 round trip, but the actual cost was $219.18 (that’s $77.18 more in taxes and fees, which is more than the original advertised price). Now, they will have to advertise the flight for $219.18.

In response, Spirit has now tacked on a new $2 fee to every ticket, which they call the “Department of Transportation Unintended Consequences Fee“. Which is ironic, since they claim that the government is hiding taxes in the advertised prices, but they don’t mention how they hide their ridiculous fees.

Personally, I’d like to see rules like this expanded to other businesses. How many of you have tried to buy a concert or play ticket from Ticketmaster recently, and been hit with a barrage of mandatory “convenience” and other expensive fees? I’d like to see a “truth in pricing” law that requires advertised prices to reflect the true end cost of all products.

© Ed Stein

[plus commentary from Ed Stein]

In F. Scott Fitzgerald’s “The Great Gatsby,” Nick Carraway observes that “the rich are different from you and me.” Mitt Romney’s tax returns confirm it. The rich have access to deductions, evasions, loopholes and favorable rates we working stiffs can only dream of. The absurd truth is that the wages earned by those of us who get paychecks from employers are taxed at the highest rate of any income. The lucky stiffs who run hedge funds and private equity firms get to take income as carried interest, whatever that means. In tax terms, it means they get to make lots of money for investing other people’s money and have it taxed at obscenely low rates compared to what we working stiffs pay. Then there are the Cayman Islands accounts and Swiss banks. Show of hands, please. How many of you have Swiss bank accounts? I don’t resent wealth; like most Americans, I aspire to it. What I deeply resent is a political system that jiggers tax law to favor the rich over the rest of us, feeding the income inequality that destroys opportunity and stagnates growth. The wealth disparity in America already rivals that of many Third World countries and our storied social mobility is rapidly becoming a fondly remembered relic of bygone days.

So, how’s deregulation working out for ya?

A few days ago, Scotts Miracle-Gro (whose brands include Ortho, Scotts, Miracle-Gro, Roundup, Earthgro, Black Magic, Hyponex, Osmocote, Morning Song, Whitney Farms, Supersoil, Bovung, and Country Pride) agreed to plead guilty and pay $4.5 million in fines, for not one but two product safety incidents.

The first incident involved selling wild birdseed that was coated with a pesticide that is toxic to birds. The company coated their birdseed so that it would not be eaten by insects while in storage, and continued to do so even after multiple warnings — including from their own employees — that it was “extremely toxic”.

The second (and separate) incident involved falsifying EPA pesticide registrations for their lawn and garden products, even going so far as to tell the EPA that they must have lost their files.

And what steps is the company taking to recover from this? They just announced that they are increasing spending on advertising 28% to $141 million total (31 times the amount of the fine). This includes a deal with Major League Baseball to hang “Scotts is Used Here” banners in ballparks to “give homeowners the illusion that they can have Fenway Park in their back yard just by dumping on some Weed ‘N Feed”. Even worse, Scotts just announced a “partnership” with the National Wildlife Federation, which sounds like a blatant attempt to greenwash their bad reputation.

Meanwhile, Scotts is leading a battle in Florida to overturn bans on the use of nitrogen fertilizer on lawns during the summer. These fertilizers wash off during the rainy summer season and cause massive (and toxic) blooms of red-tide and green slime, hurting not just wildlife but also tourism, but the bans are bad for Scott’s profits.

Oh, and Jim Hagedorn, the CEO who was ultimately responsible for all this? Still at the helm of the company, despite comments like this:

Hagedorn is the sole reason for this issue. He has created a toxic culture (literally) based purely on profit and greed and his warped business sense. I know quite a few former Scotts employees that are highly talented and very ethical people that were pushed out by Hagedorn in his effort to create high turnover in order to “keep ideas fresh”.

Hagedorn makes Mr. Burns look angelic. He is the poster child for what’s wrong with corporate america.

You know, some politicians say that we don’t need regulations, that consumers should just stop buying products from companies they don’t like. As for the former, we would never have known about this company selling deadly birdseed if not for the federal government. But as for the latter, it sounds like a consumer boycott would be a very good idea.

UPDATE: Apparently the National Wildlife Federation has changed their mind and will now “end the partnership”.

© Tom Toles

Even Rudy Giuliani — somewhat of a loose cannon himself — asks of Newt Gingrich “What The Hell Are You Doing?”

I also want to point out the irony of Gingrich accusing Obama of being like Saul Alinsky, when it is Gingrich himself who seems to be channeling the radical community organizer.