Airline Antics

Albuquerque    Anyone who has flown recently knows something about the class divisions that are being strapped into the plane seats with the passengers.  I’m not talking just about the fares.  Almost everything is being tilted towards first class and the creation of various forms of steerage where people are forbidden to bring anything aboard the plane whatsoever.  I use the word “tilt,” advisedly, because increasingly seats in steerage, where most of us sit, don’t tilt at all, but because we’re all squeezed in like sardines and the legroom is measured increasingly in centimeters rather than inches, many flyers may not have noticed, particularly because the cost of flying has not decreased with the service.  Airlines are enjoying record profitability currently.

Passengers have few rights, and, shockingly, it now seems those thin reeds are in danger of being pulled away from us as well as the Department of Transportation (DOT) under Elaine Chao (married to Senate Majority leader, Mitch O’Connell) is supervising a review of many of Obama-era protections.  Much of this examination is behind the ground level fog machine that is being pushed by the airlines over the alleged abuse of flying service animals.  The media eats this up like candy, because the animals run the extend of the menagerie including snakes, turtles and peacocks in addition to the classic, best friend dog.  Part of this is a transparent scam since some passengers are trying to beat the fee for carrying pets by claiming them as comfort and service animals.

Airlines will tighten this down, but the real show is behind the zoo where airlines are lobbying fiercely to get rid of important protections.  The examples include the 24-hour grace period to correct mistakes in booking which is critical.  In the world of on-line booking – which saves airlines money since they are subcontracting reservations and booking to the consumers for free rather than paying for the staff time – errors are routine.  Few of us have not had a leg-slapping, cursing moment when we discovered we had typed the wrong date or misread PM for AM and vice versa.  Don’t say that it’s only me!

According to reports in the Wall Street Journal, airlines are also pushing to eliminate penalties for stranding passengers for hours on the tarmac and they don’t want to have honor fares when they make a mistake.  They also want to charge for wheelchair service.  Geez!

Airlines are making billions by nickeling and diming their passengers for food, baggage, and even seat selection, but why should they be allowed to use their customers as their own private runway to more billions by sweet talking the DOT?   Unfortunately for the nation’s millions of flyers, President Trump also once owned an unsuccessful airline.  We’re in trouble now for sure with no clear path to a safe landing.

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Updates on Banks as Criminal Enterprises: More Wells Fargo Mess

New Orleans   The old adage that “what goes around, comes around” applies nicely to Wells Fargo, long in our experience one of the pariahs of banking and a shameless purveyor of predatory products and lending, long a target of ACORN campaigns.  Recent years have seen their corrupt culture begin to catch up with the San Francisco-based financial institution especially when they were caught creating thousands and thousands of fake accounts in their boiler rooms.  When that shoe fell, others started flying as the bank seems to careen from one scandal to another, and every internal and external report seems to report the impacts as even worse than first revealed.

It is likely far from over.

In a story about the transactional exchanges between banks and universities, where various institutions negotiate semi-exclusive arrangements to have the first and best crack at students, Wells Fargo once again is coming in first when it comes to preying on students as well.  In a recent Wall Street Journal report “twenty-two of the 30 highest average fees” were at schools with Wells Fargo contracts, while 20 of the 30 lowest were with Pennsylvania-based PNC Financial Services by comparison.  Wells in a typically flannel-mouthed response to the reports said that their charges were higher because “some students have ‘more complex banking needs, such as sending wires or purchasing more checks.’”  Who are they kidding?  The markup on check purchases at banks is huge, and how many youngsters use checkbooks rather than cards?  Come on!  They also make beaucoup on wire transfers and remittances, so this doesn’t answer the question either.

There is a sign that the greed and fast dealing of Wells and other banks may have finally gone past the usually rubbery line drawn by the Federal Reserve with one of Janet Yellen’s final announcements as chair.   Responding to Wells as a repeat offender, the Fed limited its ability to grow for the next year until it gets its act totally together, and then in an almost unprecedented move, demanded that 25% of the board be replaced this year.  In a reaction to the decision during the stock market selloff, Wells lost over 9% of its value taking a $29 billion beating on its valuation, pushing it significantly behind its competitors.

Will Wells and its kind finally get the message?  It’s hard to say since we’ve seen nothing but more evidence of predation from them even as their bully-boy practices have been exposed repeatedly.

If patience is running out at the Federal Reserve and on Wall Street, maybe they will finally understand why we chanted in front of their Los Angeles headquarters years ago, “Predatory Lender, Criminal Offender!”

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