Returning America to its Capitalistic Roots

by Thomas Hinton

It should come as no surprise that consumers are frustrated and downright angry at corporate America. We’re especially angry with big banks and big oil. After five years of economic hardship and financial carnage not much has improved for the average consumer. America’s economic forecast is cloudy at best.

There’s a lot of blame to go around for the economic mess we’re in, but at the root of our financial problems is the growing culture of greed that permeates Corporate America and, specifically, big oil and big banks. The One Percenters, as they’ve been labeled by the Occupy Wall Street movement, have grossly misinterpreted what American capitalism is all about.

The corporate vultures do not represent the best economic interest of our nation, nor the world. In fact, they represent what is blatantly wrong with America, and their behavior is both disgusting and criminal. I do not use the word criminal lightly. Their misdeeds and governance actions have undermined the basic freedoms guaranteed to every American as prescribed in our Constitution and the Declaration of Independence, our nation’s two most sacred documents. When the basic rights of Americans – life, liberty and the pursuit of happiness – are compromised by corporate malfeasance under the pretense of a company’s right to make a profit, government has both a responsibility and obligation to protect the interests of its citizens. Regrettably, this is not happening because our elected officials have been unduly compromised by lobbyists and brainwashed into believing a big bank, insurance company or automaker is too big to fail. Such thinking further undermines the basic tenets of American capitalism.

We all know who these corporate culprits are. Their corporate names are household words. Their signage and logos adorn skyscrapers and buildings in every major city across the nation. Many of these companies are led by unindicted crooks who knowingly endorsed programs, schemes and policies that undermined the housing industry – the most sacred cornerstone of the American Dream, created epic levels of unemployment and under-employment, and stripped millions of American of their financial dignity by manipulating investment markets that eroded retirement plans and savings accounts.

All of this happened under the blind eye of our federal government and elected officials. Our federal and state governments have done little to hold these corporate leaders accountable for their brazen abuses or protect consumers from another financial meltdown. While the nation’s attorneys general should be applauded for their efforts to sue big banks in an effort to help distressed homeowners, President Obama and the Congress continue to reward these corporate culprits with government bailouts and gentle slaps on the wrist. Is it any wonder that so many Americans have lost faith in their leaders and their ability to initiate meaningful change? Is it any wonder that consumers are frustrated, angry and bitter about their dwindling economic prospects let alone the economic prospects of our children?

Five years after the financial debacle was perpetrated by big banks with the approving nod of the Federal Reserve, SEC and other federal agencies, millions of Americans remain mired in the economic mud created by investment houses and big banks. It continues to be a very slow and painful financial recovery for millions of consumers; and, all of this is happening while big banks and big oil amass outrageous profits at the expense of struggling America’s consumers.

Can consumers do anything to stop this harmful trend besides transferring their bank accounts to credit unions and limiting their driving so they buy less gas? I think the answer is a resounding yes! Consumers ultimately control the power of the purse and the economic fortunes of a nation because we can choose where and how to spend our money. We can also choose to dethrone those elected officials who contributed to our economic misfortunes. In the final analysis, consumers can regain control of their economic destiny by standing up for what is right with America and demand big banks and big oil honor the true spirit of American Capitalism – making a fair profit while raising the fortunes of society.

About the Author:
Thomas Hinton is president of the American Consumer Council, a non-profit consumer advocacy and financial education organization with over 126,000 members. He can be reached at tom@americanconsumercouncil.org

Airlines Should Get Aboard with the new Truth-in-Advertising Rules

This week, Ray LaHood, the Secretary of the United States Department of Transportation, announced new rules that require domestic airlines to include all taxes and fees in airline ticket prices. These new rules are common sense and are good for consumers.

Surprisingly, Southwest, Allegiant and Spirit Airlines are resisting this “truth in advertising” policy by suing the US-DOT over the new rules. The airlines are arguing that the new requirements make the rules for the airline industry more stringent than any other. That’s utter nonsense! The fact is consumers are fed-up with the airlines lousy service, unfair pricing rules, non-disclosure of upfront costs for baggage, meals and ticket changes. This is why Secretary LaHood and US-DOT should resist any changes to their new rules. Consumers deserve honesty and full disclosure from the airlines.

Frankly, I’m surprised by Southwest Airlines’ involvement in the lawsuit. As one who regularly flies Southwest, I think it might tarnish their otherwise sterling reputation. Southwest Airlines has been an industry leader and a role model for domestic airlines in many ways – their consistent profitability, a very strong safety record, low fares, free baggage, customer-friendly flight attendants who know how to make passengers smile and laugh during the safety announcements, and the most user-friendly website in the industry, bar none.

On the other hand Spirit Airlines has earned a reputation for nickel-and-diming its passengers for everything! So, their position in the lawsuit is understandable. They want to continue to lure prospective passengers onto their website by disguising low fares before hammering them with various fees and charges after passengers have purchased the ticket. These are the very types of unfair pricing tactics that Secretary LaHood is trying to stop.

In fact, Spirit Airlines and AirTran Airways, which is owned by Southwest, were fined a combined $90,000 for violating the pricing rules in advertisements such as emails, tweets and on their websites. Allegiant Airlines was fined in 2009 for not including a convenience fee in initial fare quotes. Need I say more?

The airlines have had their way for too many years. They have consistently practiced unfair and devious pricing schemes to lure passengers onto their flights and making record profits in the process. But, a growing number of complaints by consumers prompted the U.S. Department of Transportation to implement new rules which are based on fairness, truth-in-advertising and full disclosure. Frankly, these new rules are long overdue and the airlines ought to quit their pouting and do the right thing by consumers.

The turbulence surrounding the new Department of Transportation rules amounts to little more than belly-aching from the airlines that must now be honest and forthright with consumers. It’s one more reason why a strong government watchdog agency like the U.S. Department of Transportation is necessary. Without such rules in place, airlines would continue to use unfair pricing tactics and unscrupulous methods to lure travelers onto their planes. Am I exaggerating? Not at all! Just read what the lobbying group, All Airlines for America (A4A) stated in the legal brief they filed with the D.C. Court of Appeals in support of the lawsuit by Spirit, Allegiant and Southwest Airlines.

In its legal filing, A4A said, "ATA members share DOT’s stated objective of ensuring that customers are treated fairly and consistently, receiving the products and services for which they have paid on the basis advertised to them. But ATA members do not share DOT’s unstated, but apparent, goal of holding airlines to much higher standards of conduct than prevail in other deregulated industries."

In other words, the airlines don’t like being held accountable to the same common sense practices and fairness standards that American consumers expect from every other industry. Are you kidding me? And, remember, folks this is the same industry that has gutted its workforce, stripped its talented and dedicated employees of fair wages and benefits and moved to decertify its unions. No wonder consumers are frustrated and outraged at the questionable pricing practices used by so many of our nation’s airlines. Perhaps, the airlines should simply mind their Ps and Qs and be lucky Secretary La Hood isn’t pushing for re-regulating the airlines!

About the Author:
Thomas Hinton is president of the American Consumer Council, a non-profit consumer education organization with over 120,000 members. He can be reached at tom@americanconsumercouncil.org