The Economist magazine recently wrote an article in favor of airlines unbundling fees; Ancillaries; You Know They Make Sense
“By charging fees, once neglected baggage service departments have become star revenue performers for airlines. Department managers can now justify new technology and equipment. Where before, baggage service only represented a cost, it now provides millions in revenue”.
In other words, charging money for baggage essentially transfers this service from the liability column to the asset column of the accounting statement. As a liability, it can only atrophy under the weight of austerity measures.
And Then The Carousel Starts Spinning
What happens next is quite remarkable. The airline PR machine twists this into a veiled statement of American individuality, claiming “freedom is about having choices” and touting themselves as the protector of all that is good and great in America. Then, they BLAME the traveler for expecting that mustachioed Soviet-era entitlement to unlimited [baggage] service.
Just give it a French name
“Passengers will continue to complain about being nickel-and-dimed, but it may be that they are making false comparisons … “When a la carte shopping is successfully implemented, it’s not an evil method. Quite to the contrary, it’s the ultimate compliment to the consumer—it acknowledges their right to choose.”
Roll in the legislators
The resemblance to political discourse about a whole myriad of issues is uncanny and would make anyone suspect a larger conspiracy. But what if the problems are real simple? What if the genus of political division in this country could be traced to a simple but widespread accounting anomaly? There is no accounting system for human values.
For example; consider the fact that Motherhood does not count in American Gross Domestic Product, but Day Care services do. So in order to stimulate economic growth, legislators subsidize day care so a parent can go to work while in the same breath witholding services if the mother “fails” to work. Don’t forget to always blame the customer when things don’t go right.
Gambling With New Value
Similar paradox never seems too far from key social issues such as education, health care, Internet privacy, Immigration, International Trade, Homeland Security, even Banking and Finance Reform:
From Fox News coverage of the JPO Morgan 2 Billion dollar loss:
The basic problem is that regulators have been working for the last two years to define the difference between hedging and gambling, and can’t. Either the rules would be too severe and shut down banking, or would permit reckless risk taking that could take down a huge bank, and potentially put the taxpayer on the hook to pay off depositors through the FDIC.
A hedge acts on both sides of the accounting balance sheet while a gamble does not. What if that’s what it’s all about; all the fighting, and slander, and division, and prejudice, and injustice, and violence, etc., caused by a simple accounting system problem.
When we do not have an accounting system for human values, we can only gamble with them. To hedge, New Value must be must be tangible. The problem is simple; it is a failure in the accounting system for New Value Movements.