Nightmare at 20,000 Feet: Crazy Bob Kuttner Is Hungry for a Meal…and Airline Reregulation!

You may know Robert Kuttner as the sober co-editor of The American Prospect. Or you may recall him as the Capt. Queeg of doctrinaire liberalism who adopts the persona of "Crazy Bob," a maximum–and fearless–leader who is ready to don a fright-wig if and when the moment calls for such bold action.

But after reading this recent Boston Globe column by Kuttner, you'll think of him as the next likely perpetrator of that air rage that used to be all the rage a few years ago. But it's not just crappy service and all those Becker reruns wot's driving Crazy Bob crazy these days. It's the sheer insanity of the semi-free market that's making Kuttner pull a Shatner at 20,000 feet (plus or minus 16,000 feet):

I am writing these words at 36,000 feet, where Delta, another malefactor, no longer provides complimentary meal service on its six-hour nonstop Boston-to-Seattle route. Delta doesn't even offer meals for purchase. (On the shorter, but competitive, Boston-to-London flight, it manages to serve two.) Delta, which emerged this week from bankruptcy, pinches pennies in other ways, with sardine-like coach seats.

The other menace of today's deregulated flying experience is the crazy quilt of fares. Deregulation allows airlines to adopt any pricing scheme the traffic will bear. The object is to fill all seats, with the maximum total revenue. This is said to be economically efficient. But this chaos is not the only way of optimizing revenue. Indeed, the proof of its failure is the epidemic of airline bankruptcies. In most years since deregulation, the airlines have lost money.

Submitted for your approval: A system that allows airlines to charge different prices for tickets is not a "menace"; nor does it represent "chaos." And the deregulation of ticket prices has been a boon for travelers by cutting prices phenomenally. As the Government Accounting Office reports, since deregulation,

Airfares have fallen in real terms over time while service-as measured by industry connectivity and competitiveness-has improved slightly. Overall, the median fare has declined almost 40 percent since 1980 as measured in 2005 dollars….

However, fares in shorter-distance and less- traveled markets have not fallen as much as fares in long-distance and heavily trafficked markets. Since 1980, markets have generally become more competitive; with the average number of competitors increasing from 2.2 per market in 1980 to 3.5 in 2005.

More here. And while it's true that airline prices had started to decline before deregulation, "deregulated fares have been 10 to 18 percent lower, on average, than they would have been under the previous regulatory formulas" (more on that here).

This isn't to say everything is rosy in the friendly skies. That's partly because the deregulation was never completed (opening up airports to true competition has been painfully slow in coming, as has spinning off the air-traffic control system to a private or semi-private entity, and foreign-ownership rules means that domestic airlines aren't as competitive as they might be otherwise, etc). Flying is more like riding the bus these days, which offends snobs even as it's proof that more people can afford to fly than ever before. But Jesus H. Christ, has any policy–pushed back in the '70s by a bunch of Democrats such as Ted Kennedy, Alfred Kahn, and Jimmy Carter–been as clearly beneficial as airline deregulation (maybe the dereg of interstate trucking, which happened around the same time)?

Back to Kuttner, who among other things, bitches and moans about flyers getting discounts if they book their tickets ahead of time (as if basically every other industry doesn't do something similar): 

If you want to fly nonstop from Boston to Seattle, there's Delta . . . or Delta. The two shuttles to Washington National mysteriously charge identical, exorbitant fares. Nor are there options of price and quality. You can suffer steerage; or plunk down a month's pay and go first class.

This is simply wrong: A quick scouting of fares at Travelocity shows that, at the very least, JetBlue and Alaska Airlines offer nonstops between those Boston and Seattle (and a bunch other airlines say they offer direct service). And in any case, since when is it the birthright of Bob Kuttner or anyone else that they get direct service between any two given cities? While you're complaining, don't forget to bitch and moan about ice cream that's not fattening, too. The injustices we all suffer in this world are too great to bear! And then he says there are no options "of price and quality" immediately before complaining about the option between coach and first class. WTF? Another quick scan at Travelocity for flights from Boston to DC's National airport (leaving on May 15 and returning on May 17) show four airlines doing nonstop service for prices ranging from $371 to $449, which strikes me as a decent swing (nonstops range from $290 to $449, not including all the goddamn taxes and fees that I'm sure Kuttner is generally in favor of).

In the end, Kuttner remains a medieval thinker about prices: There is a fixed and fair price to any given good or service, independent of context, the subjective valuations of individuals, etc. Indeed, he even trots out the labor theory of value to say why it's wrong that airlines charge different prices for the "same" seat:

Fares bear little relationship to airlines' costs. In principle, it's possible that every person on the same flight was charged a different fare. Some paid less than others, not because they booked early but because they got discounts negotiated by a corporate employer. Yet it costs the airline the same to fly the passenger in seat 21A as in 21B. These corporate discount deals produce few if any economies of scale, since seats are still mostly booked one at a time. So why should different passengers be charged different fares for the same flight?

Last question first: Because different passengers will pay different prices for the same ticket.

I'm curious if Kuttner charges a fixed rate for all of his writing? If the Globe offers him, I don't know, $200 for an op-ed and someone else offers $500, does he turn down the offer that bears less relationship to his "costs"? After all, why should he charge different prices for the same op-ed (and let's be clear: he's not coming up with any original thoughts; indeed, he can't even be bothered to pull a George Jetson and hit a couple of buttons to research airfares)? Does he get more (or give more, as an editor at The American Prospect) for someone who turns in a piece overnight on a very time-sensitive subject? Yet it costs a newspaper or magazine the same to run each letter of print, doesn't it?

I fly a lot–every week, in fact. I wish airline prices were cheaper still, that the seats were bigger, the planes faster, the food better (or that there even was actual food on flights, rather than "snacks" that seem scrounged up from the backseats of a 1968 Ford station wagon). I wish that the airline industry was fully open to competition, that the government doesn't bail them out anymore, and that foreign companies can openly own controlling interests in domestic carriers (not because I hate America but because that would certainly benefit you and me). But it's not such a stretch to see that air travelers are in a much better situation now than they used to be. Or that fluctuating airfares are a sign that something is right with the world.

I'm just glad the Kuttner isn't flying the plane.