Wednesday, April 14, 2010

Because Ben Cardin Thinks He's Smarter Than Adam Smith

You all know who Adam Smith is right? If not, you should. He wrote A Wealth of Nations and it's the Bible of economics. It discusses efficient uses of resources, the relationship between supply and demand on price, among other things. A Wealth of Nations reads like common sense (but not Common Sense by Thomas Paine). Unfortunately, common sense eludes our elected officials.

Today, Maryland liberal extremist Ben Cardin declared that it's ridiculous that airlines are going to charge for carry-on bags. He and Charles Schumer of New York (pronounced shoo-mah), have vowed to introduce legislation outlawing the practice of charging for carry-on luggage.

Let's sit back and examine this for a minute. Why would airlines be adding fees for baggage? Probably because they are not making enough revenue to cover expenses, so instead of raising ticket fees, they add fees that passengers can avoid if they choose. Or - are they just being greedy and want to make more money?

If the airlines are, in fact, being greedy and want to make more money, then what is going to happen? Well, air travel is normally considered a luxury (with exceptions to politicians, salesmen, and limousine liberals), not a necessity. If it costs too much to use their service, people will find alternatives - drive, take a train, take a bus, or not take a trip. The airline industry's supply is challenged by other industries that can provide similar services. If they charge too much, consumers have a choice to use alternate transportation methods or not travel. Thus, if consumer usage of airlines goes down, so does airline revenue. So are the airlines really going to get more money from the consumers?

Let's assume the far left-wing arm of the Senate passes this bill and it eventually becomes law. What happens next? The airline industry is prohibited from increasing bag fees, so in order to increase revenue they'll increase other fees and/or raise ticket prices. Does the consumer really benefit from government interference in pricing models? Is Congress going to come back and tell the airlines how much they can charge for ticket prices? Don't think that idea is that far-fetched.

So, Senators Schumer and Cardin - before you go passing laws forcing more government interference into the economy, think about the consequences of your actions and what it will really accomplish. Remember - your constituents aren't THAT stupid.

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