Tuesday, September 15, 2009

Lousy Air Travel The Least of Our Worries

Kevin Drum riffs on an Atrios comment that "flying really sucks." Kevin says:

If I can put on my Andy Rooney hat for a moment, doesn't it seem as if this describes most of American business these days? It's not just the airlines. As near as I can tell, consumer-facing businesses these days virtually never think about how they can make things genuinely more convenient for people. Rather, they seem almost obsessively concerned with calculating the maximum amount of pain people will put up with before they finally get pissed off enough to take their business elsewhere.

I think Kevin's on to something significant.

I heard a restaurant evaluator a few years ago talking about restaurants, and he always favored local institutions, whatever it was, from a great Northern Italian to a clam shack at the beach. He described food at big chain restaurants as "just good enough so that you won't swear never to return and mean it." He pointed out that there's no one for whom Olive Garden is the best restaurant, just the most convenient, easiest to park at, and not so bad that one would never return.

A lot of large businesses are run this way: gouge every penny possible from the consumer to the point where you are one cent shy of losing the customer. And, after all, it's a smart way to maximize near term profits.

Smaller businesses that don't have to face the demands of the stock market have freedom to charge what they like, and provide whatever level of service/quality they like.

The problem is that the larger businesses essentially rig the game by using their size -- and ready (ish) access to capital to preclude smaller businesses. That's why nearly every town in the US has the same stores, restaurants, etc.

Another undesirable consequence of Wall St.'s demands is that it starves society of research and development. Air travel benefits in part from the R&D that is done by the government. But a lot of companies don't have any R&D strategy, so they riff on the products they already have, they move those products into new markets, and they buy-out the competition. Plus, there's always moving work to lower-cost markets and otherwise depriving workers and suppliers of any available pennies in order to make the firm look like it's growing.

This all points to a serious crisis in the world's economy. We have faced and rebounded somewhat from last year's financial crisis. But we have yet to face and rebound from the underlying economic crisis that continues to worsen. I believe that the current downturn shares this feature with the Great Depression.

We exited the Great Depression by providing work to every man and woman we could get our hands on. We came out of the war with enough technological innovation to support a couple of decades worth of improving products and services.

I don't see any such deus ex machina on the horizon, and so don't see any basis to suppose that the long-term decline in our standard of living is going to be reversed any time soon.

It's certainly true that some of the decline of the West is the happy by-product of a sort of global equalization which is having the positive effect of lifting hundreds of millions out of abject poverty. But we are also dealing with the consequences of a poorly managed society for the last 40 years or so. (Hardly surprising when one considers that we've had a faction in our society for that period that seems to seek and celebrate poor or non-existent social management).

1 comment:

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