Corporate Thuggery (Kill them All?)
The Market Ticker - Commentary on The Capital Markets
2017-04-11 08:30 by Karl Denninger
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Corporate Thuggery (Kill them All?)
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I'm sure by now you've heard of the latest incident of corporate thuggery on a United Flight.

United, you see, had a full plane.  They also had failed to plan and needed to get some of their employees to a location where said plane was going.  Having offered up to $800 for people to give up their seats and finding no takers, they then forcibly removed passengers so their failure to plan could be rescued at other people's expense.  One of those removals went poorly when said passenger refused.

First, let's dispense with the legalities -- airline "contracts of adhesion" allow them to do this.  And yes, they are contracts of adhesion.  That is, you can't negotiate them, they're "take it or leave it" and they're all essentially identical.  Contracts of adhesion ought to be unenforceable when adverse to you, but they're not in today's world.

Second, once seated you damn well ought to be, well, seated.  There is a point beyond which your contract to get from A->B should be confirmed and it's definitely beyond the point where you are in your seat and belted in, as was the case here.

Third, the airline should, if they fail to plan properly and thus have sold more seats than they have, and especially when the reason they have too few seats is their own failure to plan to get their crews where they need them, be forced to pay the market price for those seats.  Said price might be very high, but there is a price at which people will choose to voluntarily get off the aircraft.  What is that price?  Nobody knows until the offer is hit but the price of failure to plan ought to be the market price, and in a just world it would be.  Will that be expensive for the airline?  Yep.  So what?  That is the check and balance on not doing stupid things -- like selling more seats than you have.

Fourth, it is illegal for me to threaten to, or actually use, criminal sanction to settle a civil dispute.  In fact it's a felony to do so.  Why isn't United under criminal indictment right now for calling in the cops and having them use force at a criminal level to resolve what was a civil issue?  Denying someone boarding before they get on the plane is an entirely different thing as you're not physically using force to make them leave; if force comes into the game in that situation it's the passenger who initiates it by rushing the gate.  At the point the airline has boarded and seated you their opportunity has passed absent you committing a criminal act, and sitting in your seat that they assigned you doesn't get there.

This is really just another example of we the people tolerating ridiculous abuse at the hands of "corporations."  We allow this every day -- we allow a "doctor" to refuse to give us a price before they perform a surgery, we allow a hospital to present blanket consents that are considered "legally valid" after drugging you while if you do the same thing in a bar we call the sex that results rape, we allow an airline to sell more seats than they have which is in fact an act of fraud since they can't fulfill the agreement they made, we allow hotel companies to quote "prices" that do not include taxes and other fees in the price which you only find out after making a selection and more.  Indeed when it comes to airlines the pricing games are even more-ridiculous; the "price" doesn't include, in many cases, a handbag you carry with you as some of them now charge for carry-on luggage, say much less checked bags and none of them include the taxes and fees in their fare quotes.

In the so-called "leisure" world the fees and taxes are often ridiculous multiples of the common sales tax.  I know what the sales tax is in my area and it's easy to figure out what it is in most places.  However, "bed taxes", "TSA fees" and similar often mean that if you get a hotel room you pay two or even three times the base sales tax rate and if you buy an airline ticket the fees might be 30% or even more of the fare and yet none of that is quoted in advertising -- nor until after you make a selection.

Knowing all that in advance and applying general consumer protection laws that provide that a quoted price must be the actual price would mean that now I might choose to stay in one town instead of another because one imposes such taxes and the other does not.  I might choose one means of transportation over another because one imposes such fees and taxes but the other does not.  It's nearly impossible to fairly compare these things today but it should not be; everyone should have to post a price and that ought to be the full and complete price, to the penny.

Why do we allow any of this?

Why do we not immediately, through lawful means, "burn these businesses to the ground" -- by boycotting not only them but everyone who works for them?

Oh, you "need" to fly, you say?  Uh, no you don't.  Make those tin cans worth zero by refusing to get in one.

Oh, you "need" a doctor?  Well, perhaps in some circumstances you're unable to shop and consent (e.g. you just had a heart attack) but in many others that is not true; you could, upon being refused a binding price, not only refuse to do business with said physician you could refuse to have anything to do with him or her and anyone he or she employs anywhere, up to and including refusing to sit in the same pew with them in church!

Why should we allow various online sites to quote us hotel, event ticket and other prices without the taxes and fees included?  They know damn well what the taxes and fees are when they present a price so why don't we insist that they all be included so we can compare?

There's utterly no excuse for this sort of thing but the fact of the matter is that we, the people get this kind of treatment because we allow it.

Should United be financially destroyed over this by customers refusing to do business with them?  Yes.

But they, and all the other firms that pull this crap every single day, should have been destroyed years or even decades ago when they first started refusing to actually honor what was allegedly "offered" at the price given -- whether it be through this sort of "involuntary denied carriage" or through posting a price that the seller knows is false because it does not include mandatory taxes and fees that they will, in every case, demand you pay and they add on.

And oh, by the way, if United can employ violence when they don't like the price presented to them to voluntarily get their way why is it that the rest of us should not take exactly the same position and employ the same remedy when we don't like the price of a ticket, a hotel room, a doctor visit or a car?

As for United, I have a simple reply for their corporate failure to plan and then foisting the cost of that failure on others, whether "legal" or not:

smiley

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User Info Corporate Thuggery (Kill them All?) in forum [Market-Ticker]
Aztrader
Posts: 7750
Incept: 2007-09-10

Scottsdale, AZ
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Haven't flown in almost 5 years and have no intention of doing so. They have crammed more seats on these planes making people like me at 6'3" a deformed pretzel after 3 hours on a flight so they can generate more seat revenue.
Everything corporations do today is about squeezing more revenue out of everything and everyone. They no longer care about their customers or their vendors. Everything comes down to propping up their stock price at all costs.
I would rather drive 5 hours then get on a plane. If you do the math and figure it takes 45 minutes to drive to the airport, 20 minutes to park and get inside, another 20-30 minutes for security and then you have to wait hoping the plane is on time, then at least half the drive time is already used up. The best part is you come and go as you please, no luggage restrictions, no TSA, No airport food prices and blubbering idiot rolling over into your seat for 3 hours. This kind of travel is more work then fun. They have literally destroyed the vacation experience due to their greed and the security measures we are forced to go through. No Thanks!
Aztrader
Posts: 7750
Incept: 2007-09-10

Scottsdale, AZ
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Just got this email from a friend.................

http://www.13newsnow.com/news/investigat....
Susanjbear
Posts: 777
Incept: 2010-06-10

Salt Lake City, Utah
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For a very long time heavy-handed tactics have been utilized at the airports, most egregiously by TSA. When the agency beat up passengers like Robin Kassner, strip-searched senior citizens and leaked colostomy bags, Americans either clucked their tongues in sympathy or rationalized that the victims did something to justify the treatment.

Social media was full of faux outrage a few weeks ago when a young boy was excessively searched and wanded. He wasn't the first kid and won't be the last. As usual a lot of noise then no consequences.

And now it's come to this - a paying seated customer not being disruptive to the flight, a doctor on his way to see patients - brutalized and dragged off a plane by thug cops.

Will this incident break through peoples' cognitive dissonance? Will it be the tipping point? Can't answer that, but I have NO sympathy for anyone with an attention span of 5 minutes and who has looked the other way and chosen to remain flying as the thugs have taken over the airports.

Robin Kassner beaten up by agents
https://www.liveleak.com/view?i=28c_1215....

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Susan
Geckogm
Posts: 4245
Incept: 2007-06-26

Canyon Lake
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Steph4liberty
Posts: 2356
Incept: 2010-10-22

Raleigh, NC
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It would have been cheaper for United to have hired a private charter to ferry their personnel where they needed to go rather than lose the millions in business they potentially will from their treatment of this passenger.

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"Man will never be free until the last Banker is strangled with the entrails of the last Politician" - unknown

"This isn't a market anymore, it's a computer game." - Drench
Burya_rubenstein
Posts: 1224
Incept: 2007-08-08

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I for one have long ago stopped considering any job that requires any travel. Which is a large portion of them.

Is there any way to get to, say, Spain for hip replacement surgery or India for heart bypass, or whatever, WITHOUT going by commercial airline or going through security?

(I once heard rumors of TSA checkpoints at *train stations*, and it's rather hard to hijack a train and fly it into the Renn Center. One of these days I think I'll go to the train station and take a look.)
Enapa
Posts: 1545
Incept: 2008-01-25

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I still don't understand the whole thing. Was the Dr. not already in a seat? If so then why did he need to be taken off? Wouldn't whoever was standing need to leave? It doesn't make sense.
Jack_crabb
Posts: 5167
Incept: 2010-06-25

Peoples' Republik of Maryland
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I've had it with corporate thuggery. I have not flown in years.

Banks are right up there, too. My wife and I recently received a refund from the State of Maryland for "unclaimed funds" (some more bull**** from the banks, but that's another story). We went to the local branch of our bank, but they wouldn't cash it because we didn't have enough funds in our account to cover it. I purposely keep just enough in our account to pay our bills, and no more. But this bank would not cash a $1700+ check from the State of Maryland. WTF?! You think Maryland isn't good for $1700?!

So, then I call the bank that the check is drawn upon. It just so happens I have a business account at this bank. But guess what, my wife needs to be present in order for me to cash the check. I could understand this if I were some Joe Schmoe off the street. But I have been doing business with this branch for nearly 20 years and all the regular tellers and managers know me. This is the same bank that insists on seeing a driver's license and recording my SSN should I want to withdraw over $3000 OF MY OWN ****ING MONEY.

I swear, if I didn't have bills to pay via check I'd do without banks - both personally and for my business.

As Afroman says, **** the corporate world."

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Molon Labe
Where is Henry Bowman when you need him?
How many are willing to pledge this? We mutually pledge to each other our Lives, our Fortunes, and our Sacred Honor
Ckaminski
Posts: 4024
Incept: 2011-04-08

Mass-Hole!
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Burya, I'm not sure where you are, but there's no way to take a train from CONUS to Spain.

Take a container-ship cruise.
http://www.freighterexpeditions.com.au/f....

36 day vacation at sea for 3700Euro.

Then you just have to deal with Customs and Immigration.
Ckaminski
Posts: 4024
Incept: 2011-04-08

Mass-Hole!
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Correction to my last - that's the tariff price - not the actual cost.
Magus
Posts: 2400
Incept: 2008-05-04

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I have to travel a decent amount for work. I get paid very well and I'm usually only in the air for 90-120 minutes. About every 10th flight just makes me want to bang my head, although since I got Gold Status with AA and TSA Pre, it's no where near as bad of traveling experience as it used to be. I'm usually on American or Delta with just the occasional United flight.

I've only once been on a flight where people have been seated and they needed to remove someone for overbooking (and that was someone that had been on standby). Usually they ask for volunteers an hour out and have decent luck if the incentives are there.

Given United's market cap has lost $1B dollars today, safe to say that kicking off those 4 passengers cost them $250 million per seat. Hope it was worth it.

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"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

-~~Ludwig V
Flappingeagle
Posts: 2565
Incept: 2011-04-14

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As usual you nailed it. I've pointed out from the beginning that United tried to get out of their mistake on the cheap (actually be cheating their passengers if you think it through). At some point, $1000, $1200,..., someone is going to take their offer, it is just simple economics.

Flap

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Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave the Rat Race to the rats...
Fedwatcher
Posts: 1945
Incept: 2009-04-07

Southern California
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We will never be free.

"Man will never be free until the last Banker is strangled with the entrails of the last Politician" - unknown

Since the politicians control the military and the police and are owned by the bankers the above cannot happen.

History demonstrates that when a "breaking point" is reached, only the rulers change. New politicians replace old politicians and sometimes even new bankers replace old bankers, but we remain not free.


Karl makes this Excellent point:
"Fourth, it is illegal for me to threaten to, or actually use, criminal sanction to settle a civil dispute. In fact it's a felony to do so. Why isn't United under criminal indictment right now for calling in the cops and having them use force at a criminal level to resolve what was a civil issue? Denying someone boarding before they get on the plane is an entirely different thing as you're not physically using force to make them leave; if force comes into the game in that situation it's the passenger who initiates it by rushing the gate. At the point the airline has boarded and seated you their opportunity has passed absent you committing a criminal act, and sitting in your seat that they assigned you doesn't get there."

Will Trump take this opportunity to gain favor with both the people of America and the people of China?

We will see.
Steph4liberty
Posts: 2356
Incept: 2010-10-22

Raleigh, NC
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smiley
Inline

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"Man will never be free until the last Banker is strangled with the entrails of the last Politician" - unknown

"This isn't a market anymore, it's a computer game." - Drench
Idiom
Posts: 86
Incept: 2015-02-20

New Zealand
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Is bidding for volunteers with increasing incentives not a universal practice? Airlines here break out the generous offers for compensation right away.
Vernonb
Posts: 1759
Incept: 2009-06-03

East of Sheol
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Quote:
It would have been cheaper for United to have hired a private charter to ferry their personnel where they needed to go rather than lose the millions in business they potentially will from their treatment of this passenger.


Bullies do not care about their actions upon others. They only stop acting when someone decides to beat the hell out of them either financially or physically. To date there has been no accountability. Until there is accountability and proportional punishment this will continue.

I really don't care if the guy was a doctor or not. I don't give special privileges based upon a person profession, race, class, or religion. The fact that it happened to anyone is travesty enough.

I make a 10-12 hour drive twice a year to visit family because I absolutely hate airlines and all the kabuki theater crap. In some places those crowded lines are the perfect place for a real terrorist attack.



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"Mass intelligence does not mean intelligent masses."
Hstella
Posts: 686
Incept: 2009-08-18

Colorado
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Burya: I used to use the train stations in NYC, Newark airport, and Philly very regularly. I can't even imagine how you'd cause trouble on a train. Actually I was the trouble maker as I tend to buy a ticket, stick it somewhere, and forget where I put it when the ticket counter person comes around. They always glare at me when it takes me a while trying find it, but not one ever even said anything. There has never been any justifiable reason to "security screen" at train stations.
Flyanddive
Posts: 2091
Incept: 2008-10-10

Detroit
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I had a situation a few months ago, we loaded up, but when we got to the runway, the friction report changed, and we were now weight restricted. We had to go back to the gate, and force 10 people off. No one wanted to leave, so the captain and I got off the plane, and went back to the hotel. Problem solved.

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"I've seen people go into real poverty trying to pretend to be rich."
Emac
Posts: 18
Incept: 2012-10-01

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I would tell United just what i tell my kids:

"Poor planning on your part, does not constitute an emergency on mine"
Flaps10
Posts: 6633
Incept: 2008-10-17

seattle
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I'm going to start by saying my job depends on as many of you traveling by air as possible.

Quote:
Given United's market cap has lost $1B dollars today, safe to say that kicking off those 4 passengers cost them $250 million per seat. Hope it was worth it.


$250Large would have bought a 777, and they could have burned it when it got there.

It's just a data point, but just prior to looking to see if anything was on TF regarding this I was listening to the murmur of my cube farm. This was definitely the tipping point for anyone within ear shot. People (whose job also needs as many of you to fly as possible) are not only done with United, they're done with being groped.

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Hit the gas Thelma
1crzydmnd
Posts: 2826
Incept: 2008-03-26

Bizarro World
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Quote:
they're done with being groped
So they were ok with all the other assaults before now?

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Trump -- for when you absolutely, positively have to make a liberal cry.
Tickerguy
Posts: 148437
Incept: 2007-06-26
A True American Patriot!
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The "**** you" moment always comes.

If it comes on a grand scale, and it might, well....

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Winding it down.
Tat668
Posts: 2780
Incept: 2007-09-08
A True American Patriot!
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United Dispatch probably need to dead head a crew for a priority flight. Cockpit can accommodate a certain number of extra crew for dead head, and dead head crew can also jump on any other airline heading to the same destination. I feel that that is just another bull**** story some short sighted PR person cooked up, for it is impossible for them to justify yanking a paid passenger for another paid passenger. Beside their random computer select for the whole plane disregarding to the fare paid,, or just from the cheapest class of fare received. They also had a rule for a retired 30 year (?) retired worker bumping a paid passenger in their contract at one time.

If I can recall but not sure that United is still an employee own carrier. The bag carrying part at least, after the management sold off and drain off anything that was worthy of owning.

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"This marks the beginning of the end."- Barack Obama 2-26-09
Geckogm
Posts: 4245
Incept: 2007-06-26

Canyon Lake
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I understand United offered 1000.00 dollars for anyone to stay in Chicago and a hotel. Increased odds of getting shot require more compensation apparently. smiley
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