United Starts Charging for Upgrades

Some time ago we discussed a potential market for business class upgrades. Now comes news from United Airlines that they will start charging a variable price for upgrades, ranging from 0 to $500, depending on where you are going, and what class in which you book your travel. This will be in addition to miles (although 1/3 less than before). A number of my colleagues are grousing about this, but not me. For one thing, the actual likelihood of an upgrade for other than the top elite has been reducing over time. While we don’t know what the downturn holds, it was a rare situation when one could find a free seat in either business or first class. This is particularly true on A320 aircraft, where there are only 8 first class seats. That says that somehow or another, United was leaving either money or miles on the table. These days, money is far more interesting to United, and so the charge was to be expected. The variable nature of the charge leaves United with room to experiment, so that they can still fill seats and make money in the process. After all, they have to find a new equilibrium.

As for me personally, as I live in Switzerland, and Swiss already charges for upgrades that I can get, this will allow me an opportunity to take advantage of Swiss more without feeling as though I am losing (more) money. And so right now it seems like a win/win. It does pose a question for others, particularly companies that have been relying on their employees’ largesse for transatlantic upgrades. In a downturn, it is unlikely employees will make a big stink. Wait until the upturn, however…

WSJ: Wah Wah Wah, Blah Blah Blah

Today’s Wall Street Journal is running quite a number of doom and gloom stories, simply because Democrats are strengthened through the election of Barack Obama and an increased number in the Senate and the House. Remarkably this sounds an awful lot like the same sorts of stories they ran when Bill Clinton was elected. And with his financial team that consisted of Former Senator Lloyd Benson and Robert Rubin, he was able to work collaboratively with the Federal Reserve AND Congress to produce both incredible growth and a balanced budget, results that have been reversed over the eight years by primarily a Republican president and a Republican Congress.

And so I have to ask: why is it that the Journal thinks so highly of Republicans and their anti-regulation agenda?

Obama Wins: Another Barrier Broken

In 1861 a group of rogue states went to war with the Union based on the election of Abraham Lincoln, a man who believed that slavery was wrong. Some argue that it all boiled down to economics, as in “who will tend our fields, if not slaves?” Whatever the case may be, it wasn’t until 1865 and over 600,000 deaths later that the war was won by the north. Days after the end of the war, Lincoln lost his life, and racism raged in the United States for one hundred years or more.

Yesterday America elected another man from the Land of Lincoln, Barack Obama, to put another nail in the coffin of America’s tragec era. While it would take great effort for him to be as awful as his predecessor, it will take even greater effort for him to get us out of all of the messes that have been left for him. We live in a divided country, as Mr. McCain received approximately 47% of the vote. One can hope that of that 47% only a small handful were racists.

We have a huge ballooning deficit that will cripple our ability to address great problems of the day. We have troops at war in two – four countries, depending on how you count, and we have an economy that is in a recession that many experts believe will last from three to five years. If it lasts even three years, President-elect Obama will have great difficulty being re-elected. In the process of fixing all of the above, he might be able to deal with education, healthcare, and national infrastructure.

One thing he has already done has been to shatter the image that a black person cannot lead the country. Maybe next time it will be a hispanic or jewish woman. One could only imagine the day when our president is a muslim.

Today’s the Day!

Obama or McCain, California is still in trouble

When I moved to California in 1988 I had this notion that it never rains, and sure enough it didn’t rain from the date I arrived (June 1) through November. In fact we were in a drought. To paraphrase Spock sometimes having is not as good as wanting.

It has always bothered me that the state does not have an effective form of government, where budgets require a 2/3 majority and the initiative process delivers generally cruddy legislation (cf, Props 1a, 5, 13, 99, 187, etc). My favorite was SF Proposition BB in 1993 when Officer Bob Geary managed to garner enough signatures for this lovely question, “Shall it be the policy of the people of San Francisco to allow Police Officer Bob Geary to decide when he may use his puppet Brendan O’Smarty while on duty?” And he won.

I grew up in a state where an honest politician stayed bought (NJ), but our roads and bridges were maintained and our school systems remained relatively competitive. In the meantime, California’s infrastructure degraded at a time of great prosperity, where people invested in their SUVs, Wiis, and wide screen TVs (not to mention prisons), with only a modest break when Grey Davis (who otherwise was quite awful) drove resources into the schools.

Now with California having the highest foreclosure rate in the country we already see the crisis of municipalities cutting services, and schools are next in line. My friends in Asia think the U.S. is finished. They think that our reputation is so tarnished, and our finances so wrecked, that we will not recover in our lifetimes. They may be right.

While Obama or McCain might be able to fix our reputation, no matter who wins tonight, California, the 5th largest economy in the world, cannot expect the federal government to fix the above messes that Californian citizens made. Whether Prop 8 passes is absolutely insignificant compared to what has to happen to get things on the right track. To me that includes an overhaul of the taxing policies, review of how we fund our schools, opportunistic use of emminant domain to fix public transportation and power distribution, and most of all, a fix to the initiative system, which should be a last resort, and one that requires a super-majority to prevail.

So sure! Get out and vote. But then think about real change in California. It will take a lot of work.