Tuesday, January 12, 2010

It's in the Bag. . . the profit, that is!

We read today that Delta, the biggest airline in the world, has again hitched up the fees for checked luggage.
Well folks, it is our own fault. If we were willing to pay more for our tickets, there would be no need for fees. The irony is, however, that once imposed, additional fees rarely go away. So even if they hike up the price of tickets, we'll still pay extra for checked bags, aisle seats, etc., etc. You know who invented this cash cow?
You betcha! The Banks.
Our banks/investment houses/big borrowers of taxpayer funds/big bonus bottomfeeders/con artists, invented the whole fee thing. If you remember the golden age of passenger flight, you probably remember a time when banks were solid members of the community. They lent money to members of the community for fixed-rate mortgages, which they held for the duration of the loan. The money they lent to homeowners came from the deposits we made into our savings and checking accounts and the certificates of deposit we purchased. Banks kept a very low profile. Little advertising. The only competition was between Savings & Loan institutions, who hoped toasters and sets of dishes would snag new depositors.
One day they looked askance at their profit margins and cast about for ideas on how to improve them. The bank card was born. This was a time when debt was considered a good thing. Leverage, they called it. We were allowed to deduct bank card interest from our income taxes. Spend, spend, spend, the theory went, and the Me, Me, Me generation fell for it hook, line and sinker. Oh, and at the same time the value of our homes started going through the roof. Home equity became our personal banker. Borrow more, spend more, the value of your home will only go up. That old "leverage" again.
We're still dealing with the fallout.
Maybe if we get rid of all of our excess "stuff" we won't have so much to fill our suitcases with. We could even maybe get by with just a carry-on. Be prepared, however. If we do that, sure as shootin' a "fee" for carry-ons will magically appear. Profit margins, you know.


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