December 2, 2008 - 10:32am
OP/ED

Asinine Watch cites Senator Menendez

Today the Asinine Watch begins.  With so many illiterate statements made about the economy by elected officials in recent days and weeks, it was tough coming up with the most egregious pronouncement by a member of the political establishment.  Nevertheless, I thought it would be appropriate to give the first AW award to a New Jersey politico. I am pleased to announce that U.S. Senator Robert Menendez is the recipient of the first Asinine Watch award.

Last Wednesday, the busiest air travel day of the year, at Newark Liberty International Airport (how ironic!) Senator Menendez proposed a new regulation that would force the airlines to disclose and itemize the fees they charge customers.  As the price of oil rose in 2008 airlines added fuel surcharges and baggage fees to offset the higher price of jet fuel. Now that oil price have plummeted about $100 a barrel since its all-time high, some airlines still have surcharges and fees while others have "folded" these costs into their ticket prices. 

Senator Menendez's proposal is another unwarranted intervention into the marketplace.  There is no need for the federal government to mandate more airline ticket pricing rules.  The American people are smart enough to figure out the prices of tickets no matter what pricing strategy the airlines employ.  Or are they?  After all, the people of New Jersey did elect Bob Menendez for a full U.S. Senate term in 2006.  The Senator apparently believes that a majority of people in both New Jersey and the U.S. do not mind electing economics illiterates to the Congress.  

Now there is nothing wrong per se with being an economics illiterate.  However, you should not be in the position to write bills that may become national laws based on fallacious ideas.    

What prompts Senator Menendez's proposal is the airlines' seemingly opaque pricing strategy.  When fuel costs are rising, the airlines may try to pass all the costs along to their customers in the form of higher ticket prices, or they may keep ticket prices the same and tack on a fuel surcharge and/or baggage fees. By going the surcharge and fee route the airlines seem to confirm that "costs" determine prices.    Raising prices when costs are rising is a gamble for any business.  If a firm or industry faces an "inelastic" demand curve for its product or service, then consumers will gladly pay the higher prices.  However, if the demand curve is relatively "elastic" then firms will not be able to pass on all or most of the higher costs to customers.  In the final analysis, customers determine the price of goods and services in the marketplace.  Think eBay.

Costs are important because they affect the bottom line of a company.  Higher costs and elastic demand spells low profit margins or losses for the firm or industry.  Think the airlines and Big Three U.S. auto companies. 

Career politicians should not be proposing regulations to address issues that are best handled in the marketplace.  With the Internet consumers have more information at their fingertips than ever before.  Consumers can compare prices and other factors online to get the best travel deal.  The American people do not need Senator Menendez or other illiterate members of Congress to propose more regulations on an industry that is facing enormous challenges to stay afloat.   

The U.S. economy now more than ever needs more free enterprise, less government spending and taxes, no monetary inflation, and the abolition of unnecessary regulations-and an end to the stationing of our troops around the world which is undermining our national security.  These are the ingredients of sustainable prosperity and better U.S. relations with countries around the globe.  Instead, Menendez and his congressional colleagues unfortunately will continue to intervene massively in the economy and maintain the colossal military-industrial complex that is draining our wealth.   The predictable results will be greater inflation, less prosperity and more economic controls in the years ahead. 

Murray Sabrin can be reached via email at msabrin@nj.rr.com.

Related topics: Mnendez, Airlines, free enterprise

Comments

Wait a minute


Wanting businesses to tell people what they are paying surcharges for is asinine? If airlines want to build all these into the set price for the ticket, then expecting them to itemize is not a good idea. But if they are going to add surcharges, fees and other incremental additional costs that make the flight significantly more expensive than advertised then why shouldn't people be told what the cost is?

I think Mr. Sabrin just got his own AW.

12/02/08 10:54 am

Yeah, it's asinine


Most of what government does is asinine; however, forcing businesses to disclose their costs by government fiat is particularly asinine.

A pencil is a pencil with or without an eraser, and a pencil without an eraser is cheaper than one with an eraser. But no one expects to get a breakdown of the costs of a pencil with an eraser, however.

When you purchase an airline ticket, the conditions of the ticket are stated on the back. One of those conditions is that the total purchase price of the ticket may be increased if fuel prices increase (a fuel surcharge). You are supposed to understand this when you buy the ticket (a limited license subject to conditions).

I used to live in an apartment that provided heat as part of the rent under a yearly lease agreement. However, the lease agreement provided that the landlord would be permitted to add a surcharge during the pendancy of the lease if the price of heating oil increased. What's the big deal?

Menendez is just another pol dem demagogue who wants everyone to think he's a populist looking out for consumers. What a waste.

12/02/08 12:26 pm

Menendez ?


Is nothing but a spokeman for third world values. His love affair with the illegal immigrant community is both disgusting, costly and wrong for NJ

12/03/08 2:07 pm

Nothing wrong with a little disclosure to educate consumers.


Sunshine is generally good, I wish there was more of it.

Is it the most pressing issue today? Of course not, but it should be easy to implement and is a general plus for consumers.

Must be a very slow day to find that to make a complaint about Senator Menendez.

12/03/08 10:55 pm

Sunshine is generally good,


Sunshine is generally good, I wish there was more of it.

Is it the most pressing issue today? Of course not, but it should be easy to implement and is a general plus for consumers.

Must be a very slow day to find that to make a complaint about Senator Menendez.

12/03/08 11:14 pm

asinine watch


asinine is murray sabin proclaiming he was the frontrunner for the gop nomination for us senate. think about who he ran against, and what place did he come in, with how many votes? asinine is giving you the opportunity to have your own spot on this website. asinine is when you claimed, gannett, no, not the newspaper, the DECEASED man whose name the paper service bares was supporting you. asinine is in the midst of an economic windfall saying that increasing transparency in big buisness is asinine.

12/04/08 3:15 pm

and racist is...


what bergenite wrote. and disgusting, is your ignorance.

12/04/08 3:16 pm

Ok


THe reason why Murray and his massive ego deserve his own coveted award is this. The Airline industry has been bailed out by the government. The Government has every right to look into businesses that they aid. Same with Farms, same with the current financial bailout. Consumer protection especillay from an industry that despite Murray's ignorance practices collusion on pricing and is known for tacking on additional and expensive fees while reducing services is not a bad idea. Especially sice consumers can in now way look elsewhere for airtravel. Every few years the airlines cry poormouth and the government gives them dollars. Murray provides the same old tired response that all hardcore Republicans do...Free Market will fix everything. However, deregulation of the Savings and Loans is what started this massive economic crumble when RR did it in the 80s. The pure free market is greedy and those are economically literate take advantadge of those who are not, again consumer protection is needed and should be provided by the government. I take pleasure in knowing that Murray will read this comment, its not as if he has much to do, and his ego requires that he ready every comment, I bet he even has an allias that he will comment with. Perhaps what is most rediculous is Murray's usage of finace language to uderscore the fact that he knows what he is talking about "Look I use big words to show you all how smart I am, I'm an expert..."Its pretty sad. Lastly, I love his insult that all NJ voters are idiots because we elected BM to the Senate..what Murray is really saying is "NJ voters are idiots because they didnt vote for me and Im an economic expert look at the words I use below" This guy is such a yahoo its laughable.

12/04/08 4:12 pm

Government "rights"


The egos are apparently out of control here.

The issue here is not Dr. Sabrin's ego, but rather the legitimacy/efficacy of a particular government program or the proper exercise of an alleged government power. Clearly, under the U.S. Constitution's enumeration of delegated powers set forth in Article I, Congress has no power to compel any such delineation of costs in private industry (no bootstrapping here, please . . . Congress has no power to bail out the airline industry, either). All of this so-called "consumer protection" legislation is also unconstitutional, a clear violation of the doctrine of enumerated, delegated powers and limited federal government.

Governments have no rights, just powers delegated to them as agents of the principal (We, The People). Anything that government does that is not expressly granted to it by its principal constitutes an ultra vires act and is, by definition, illegitimate. See, for example, Declaration of Independence.

Governments get away with exceeding their powers in the same way as criminals often get away with their crimes. The only difference is that criminals are more honest than government in that they don't try to convince us that their ruining of our lives and stealing our existence are in "our best interest" and done "to protect us" and "for our own good". They simply rob us and then leave us alone.

Sure wish the statist Menendez-types would behave more like the highwayman . . . respect our intelligence, and all that.

12/05/08 8:10 am

Ok


So when the government bails out an idustry your saying that we should simply ignore it after the fact...your "constitutional crisis" with standing...we could get into a debate about what the founders wanted, but rest assure they created a document that was sufficiently vague, flexible, and filled with nice little "necessary and proper" clauses...regardless the government has a right yes a right on behalf of taxpayers to insist upon sunshine when taxpayer dollars support the industry: Agriculture, airline, financial, energy...further deregulations of the free market caused the financial crisis...pure unregulated free market causes greed trickle down doesnt work. Murray is a crackpot. Regardless If the people (where supreme authority rests)elect Menendez types it means we want what he stands for in government. No one was dupted into voting for him, he had an opponent. Consumer protections are more than needed when you consider the vast scope of the airline industry, without consumer protection air travel would be impossible for most people. The free market would simply tell them to take the train or a bus, but to Menedez types like myself that simply isnt good enough, the less of keep getting the shaft in favor of those that keep getting richer on their father's and grandfather's money. No I am not a communist, I am not arguing in favor of the prolitariate, I am simply stating that in a fair society, all need to contribute. The free market fails people, and its governments job to help

12/05/08 9:47 am

You can look it up . . .


The intent of the Framers is not determinative in deciding what the Constitution empowers the Congress to do. What matters is what the original meaning of those various general constitutional clauses was at the time they were adopted and ratified. Definitive, scholarly books and law review articles have been written and published on the subject of the original meaning of those clauses. Most notably are the works of Prof. Randy E. Barnett of the Georgetown Law Center. Has his own website . . . you can access the law review articles on line. In connection with this issue, I also recommend that you read his book, Restoring the Lost Constitution".

If The People really want to change the powers (governments have no "rights" as such) delegated to the federal government, Article V provides the ONLY legal, constitutional method for such a change. The mere fact that a majority of the voters voting in any given election in any state or congressional district elect a particular congressperson with views that are inconsistent with the limitations set forth in the U.S. Constitution does not validate the subsequent ultra vires activities of that Congressperson. Period. Think "Bernie Sanders".

Thus, your arguments are inapposite. The point is not whether any particular voting constituency favors a change in the powers delegated to the Congress and articulates that preference by voting for a particular candidate who favors those changes. The point is whether anyone so elected to a federal office can exceed the powers delegated to that office by and through the U.S. Constitution.

In a democratic republic, the voting polity gets to elect representatives who are obligated to do the job as set forth in the U.S. Constitution . . . whatever that is and nothing more. Currently, the Congress has no delegated, enumerated authority to either bail out the airline industry or to require any particular form of airline ticket with any particular form of information.

If anyone wishes to change the existing power delegation, they are invited to refer to Article V and to follow the instructions. Note that Article V DOES NOT ALLOW CONGRESSIONAL MEMBERS TO CHANGE THE POWERS DELEGATED TO THE CONGRESS IN THE CONSTITUTION.

As far as I have understood what Dr. Sabrin has said on this matter in the past, Sabrin apparently understands that the U.S. Constitution can be changed via Article V. I would understand that he might oppose any proposed amendment giving Congress power to regulate business on the basis that Sabrin favors political and econiomc liberty, self determination and the right of free persons to contract freely for the provision of airline and and travel services. He might also oppose it on the basis that Congress surely lacks the institutional competence to effectively run a business or to make business decisions (the so-called "business judgment" rule). Neither of these positions are in any way "crackpot", but are rather fundamental to any understanding of the market economy.

Finally, "fairness" is undefined and undefinable, and nothing in the U.S. Constitution empowers Congress to make all laws necessary and proper to ensure "fairness", even by your definition. You can look it up.

12/05/08 10:38 am

Thanks for the History Lesson Murray


I would simply add that definitatve scholarly works have been written about a number of subjects, as have law opinons, it doesnt change the fact that an equal number representing the opposing view have also been written. Howard Zinn uses a scholarly method and I am sure you disagree with him. Furthermore read James Madison he'll let you know what the intent was

12/05/08 1:08 pm