Let’s Outlaw Religion before outlawing homosexual marriages

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One of the odd “advantages” of being married and gay in San Francisco must be that couples get to have weddings every couple of years. At first San Francisco passed a domestic partner law back in the 1990s and then they started issue marriage licenses under Mayor Gavin Newsom. At some point those were invalidated and now couples can once again get married. But wait, California has an initiative on the ballet to overturn the legality of those marriages. Presumably this debate will seesaw from one side to the other, and each time it becomes legal to do so, a gay couple can marry. The county clerk’s office makes out like a bandit until everyone gets tired of the game in the process.

Here’s the problem: each time a law is passed that forbids gay marriage, someone’s rights are taken away, in this case the right to be recognized as married, to have spousal rights, and to take advantage of other perqs only offered to married couples.

If the government is going to discriminate in such a way, we should ask either who it helps or who it hurts if they don’t. One could easily see why the government might need to restrict movements of someone with an infectious illness. One could agree with the argument for not giving driving licenses to the blind. But here, who is hurt if a marriage license is given to a gay couple? Nobody. Absolutely nobody.

It might make a person feel good to take someone else’s rights away, until that person has his or her rights taken away. Suppose we forbid the practice of religion? I could argue that there are immense social benefits to doing so. In fact I might continue that line of thought in the future. But keeping in mind the Spanish Inquisition, the recent abuse children in the Catholic church, and everything that went on in between (including standing by while many died in WWII), we could make a strong argument that religion is harmful, because we’ve seen evidence of it being harmful. We cannot say the same with gay marriages.

So let’s outlaw religion first, at least for a while, and see if the abuses curb. If not, then let’s agree to keep government out of the church. But let’s also agree to keep government out of the bedroom.

Final Thoughts on Airline Upgrades

As we discussed, customer loyalty is worth something to airlines. They spend billions of dollars worth of free services each year in order to maintain that loyalty, and their strategic alliances are intertwined with that customer loyalty.

And so let’s look at the customer. Be the customer a frequent business traveler or a casual tourist, one problem that could exist is that he or she may not be able to afford an upgrade if it is somehow connected to actual dollars. And while in my previous post I suggested that the cost would be in miles, there would be a conversion from dollars to miles. And so some segment of the customer based could end up unable to participate in the auction because of wealth disparaties. Such a customer might then be inclined to pick another airline that has a different upgrade allocation mechanism such as what we mostly have today.

That’s the risk. Is it worth it?

More On Airline Upgrade Auctions

When last we left our hero (me) we were talking about airline upgrade auctions, noting that Priceline already does this for seats.

Some of the problems that airlines would face with auctions would be these:

Upgrades are a huge perq for elite frequent flyers, where they either make or strongly influence their airline selection. Business travelers in particular make up the vast amount of revenue.
Inviting frequent flyers to use their miles as value to get these seats could imply that their miles in fact have value, and the IRS and SEC might like to know that. For years airlines have fended off attempts to view miles as any form of liability that would need to be written down. While I am sure that in recent times with the current set of passenger-hostile rules, this notion has at least been temporarily dispelled, one could easily envision governments taking a second look if they believed there was a logical monetization.

There are several approaches that may yet be available to airlines:

Run several auctions for the same seat, so that those in the same class are allowed to buy the seat first. This would be very close to how things are run today.
Provide elite members a discount on the final price. For instance, if you are a silver member, maybe you would get a 20% discount, but if you are a gold, perhaps that discount rises as high as 50%.
Reserve some seats for the Old Fashion methods of buying them in advance and using miles.

We may already be past the point where we could ever expect the auctions to be run in real money, simply because so many people have so many miles banked.

Potential Revenue of Business Class Upgrades

What this graph shows is normal business class revenue in red, and the potential for additional revenue in green. Note that the horizontal green line just indicates a random equilibrium. In reality that price would jump up and down based on the popularity of the flight, its length, and just how important it was to someone to get upgraded.

Again, this would need to be done in such a way as to preserve customer loyalty.

Airline Upgrade Auctions?

Bureau of Economics Those of you who know me know of my interest in economics, which started literally on my first day of college, thanks to a great professor named Joseph Seneca. He managed a lecture in 1983 of over 400 students in Scott Hall at Rutgers University, twice a week, for two semesters at 8:05am for an hour, covering Introductions to Micro- and Macroeconomics.

With that start in mind, I have learned to ponder my day-to-day issues with an eye on supply, demand, marginal benefit and cost, trying to understand profit maximization. It’s also why I like reading books like Age of Turbulance, by Alan Greenspan. While I do not subscribe the Greenspan’s anarcho-capitalistic approach to managing the economy, I haven’t been chairman of the Federal Reserve, so I’ll assume he knows a few things more than I do on the subject.

This brings me to two of the most remarkable Internet creations: priceline.com and eBay. eBay is remarkable not so much because of the vast amount of innovation that went on in its inception. Rather the founders applied very straight-forward economic doctrine to bring buyers and sellers together in a common market place so that goods could be sold at their optimal prices. eBay is elegant in its simplicity.

Priceline.com works along the same lines as eBay, but makes legitimate the grey market in airline tickets, hotel visits, and the like. And who can’t like a company that employs William Shatner as its spokesman? There are several limitations, however, to priceline that have often stopped me from considering them. One of the big ones has been an inability to upgrade to a higher class of service. This perhaps may sound snobbish, but sitting on an airplane with my legs cramped in front of me for 12 hours is not my idea of a good time.

And so I’ve wondered about an idea: why not let airlines auction upgrades? If the airline hasn’t sold a business class seat by the time of the flight, they could hold a pre-arranged auction that consisted of bidders who wanted the seat, complete with reserve pricing. Wouldn’t this maximize the airline’s profit? After all, people have done this on eBay without airline participation allowing individuals to maximize their profit, leading airlines to put many controls in place to prevent it.

There are of course a few problems. If you’re a very frequent flyer you expect to be upgraded all of the time without having to go through the hassle of an auction. And if you’re just a frequent flyer you expect to get upgraded some of the time. If you’re a business class traveler who normally pays the a factor of three more than the discount coach seat, you may instead decide that it’s cheaper to bid in the auction and get the same results, thus causing the airline to lose money on the proposition.

I’ll discuss mitigations to some of those problems in a future post. For those wondering about the picture, that’s the Bureau of Economics, which is part of the U.S. Federal Trade Commission, and not a Greek temple.

Viva La France!

France

Happy Bastille Day!

It was on this day in 1789 that The Bastille itself was stormed, it having become a symbol of oppression where many folks lost their heads. Let’s take a moment to recount just a few things the French have brought the world (and for now we’ll exclude french fries, french toast, and frenching).

French Wine— France offers a wide variety of reds and whites, including some interesting sparkling reds. Chateua Nuef de Pape, Cotes du Rhone, and the big ones like Pomerol are something they’ve given me.
Bread— Nobody does a better croissant than France. Napoleon even erected a fort in the Alps to keep the Italians from stealing all the good bread. Italians need to learn how to make bread like the french.
The Statue of Liberty— a remarkable lady whose purpose seems forgotten in this unkind time.
The United States of America— Without Lafayette there would have been no U.S.A.
The Citroen— without this peace of junk, there is no way the big three could have lasted as long as they have.
The Crepe— need I say more.

So Happy Birthday, France! Salut!