–What Spirit Airlines and BrandsMartUSA can teach us about bad government service.

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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A poor service experience with BrandsMartUSA and an truly horrendous service experience with Spirit Airlines (described in the comment section, below), made me think about the question of private vs. government service.

Here is what everyone knows:

1. Private industry provides better products and service than government industry, and the fundamental reason is motivation. Government agencies are uncaring about the public, and think only about quitting time, while private industry is motivated to improve and to grow by providing a lower price, a better product and better service.

2. Government workers will make you wait in line forever, then send you to another line, where you again will wait forever. Private industry workers know their job depends on their company’s success, so they try harder to please customers.

3. Private industry is hampered by government regulation, and would be more efficient if government would just get off their backs.

Everyone knows this and as is usual with “everyone knows,” everyone is wrong – or at least partly so. In fact, I believe government quite often provides better service than does business, at least big business. Here’s the reasoning behind my heretical statement:

Big business and big government each employs thousands of people, working anonymously in cubicles. For both big business and big government workers, rewards for individual performance are scarce, and few of these workers actually contact their customers. They labor silently and invisibly, mostly immunized from the realities of their product’s or service’s efficacy. They just do their jobs and keep their heads down.

From nearly all standpoints, business workers and government workers are the same people. They work. They don’t want to be criticized. They know they have very little to do with their organization’s success or failure. They recognize they are but minuscule, easily replaced cogs in giant machines.

I can see but one major difference between government agencies and private companies: Their leaders’ motivations. The leaders of government agencies follow the bidding of Congress. They don’t focus on invention, creation or competition. They focus on execution and staying out of trouble. They want to do a good, safe job while avoiding criticism and complaints from the public or from Congress.

The leaders of big business are motivated by sales, growth and profits. Customer complaints are tolerated up to the point where there is an impact on dollar inflow. They do focus on invention, creation and competition, the goal being to grow bigger, stronger and especially, richer.

Classic big private companies are banks, oil companies, car manufacturers, pharmaceutical firms, insurance companies and chemical companies. Classic big government agencies are Medicare, Medicaid, Social Security and the Pentagon.

Though big companies like to boast about their customer service, and how much they care for the ecology and their product quality, in reality they tend to do only what they must, either for competitive reasons or government regulation.

Imagine where the oil companies would drill if not for federal regulation. Or how even more dishonest the banks would be. Or how little attention to safety and gas mileage the car companies would pay. Or what poisons the pharmaceutical companies would sell. Or the toxins the chemical companies would spread. Imagine how poorly the airlines would treat you, left to their own devices. Things are bad enough with federal oversight; imagine without.

By contrast, federal agencies are self supervised. The good they do is not the incidental result of a drive for profits, but rather because that is their fundamental assignment.

My impression is that Medicare is more honest and helpful than most insurance companies; Social Security is more honest and helpful than most retirement funds. Back in the days when airline rates were regulated, service was far better than it is today. And deregulation of the banks has proved to be a disaster.

I suspect the American public would be better served by Medicare, rather than private insurers, for everyone – better served by federally owned banks than by private banks – better served by airline fare regulation and better served by federal universities than by private universities.

The point of this fact-deficient diatribe is that big government is necessary to control big business, and often provides better service, because it is not profit-constrained. Those who see big government as an Orwellian “big brother” weighing down our freedoms, are missing the big picture. The Tea Party reminds me of teenagers who tell their parents to “Get off my back,” until something goes wrong and they come running back to mommy, crying “Save me; save me.”

Rather than marching against all government involvement, and crying “socialism” every time someone suggests a government initiative, we should search for the points where we can benefit from the creative energy of capitalism together with the controls of government action and oversight.

And now that I’ve had my say, you may wish to read about Spirit Airlines in the first comment.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com


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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

17 thoughts on “–What Spirit Airlines and BrandsMartUSA can teach us about bad government service.

  1. Open letter to Spirit Airlines Customer Service
    10/25/11

    My wife and I were among the unfortunates who booked Spirit Airlines’ flight #433, scheduled to take off from Chicago’s O’Hare on 10/24/11 at 9:15AM, and land in Fort Lauderdale, Florida. At 5:30AM, we dutifully woke up, checked the Spirit website to be sure the flight was on time (it was), and went to the airport, arriving at 7:15AM, just as instructed.

    We had to negotiate a massive line at Spirit’s understaffed ticket counter (to check our luggage) and another massive line at security, but Chicago’s and Fort Lauderdale’s weather was clear, so what could go wrong?

    At about 9:00 AM we were informed our flight was delayed until 10:00AM.
    At about 10:00AM we were informed our flight was delayed until 11:00AM.
    At about 10:45AM we were informed our flight was delayed until noon.
    Just before noon, we were informed our flight was delayed until 1:00PM

    Notice how by giving one hour delay times, Spirit cleverly prevented anyone from cancelling and booking elsewhere. After all, why try to re-book, when there would be only a 1-hour delay?

    Just before 1:00PM we were informed the flight was delayed until 11:00PM. 11:00PM !?? We were told Spirit would help us book other flights, but could not do it at the desk where we all waited. No, we all would have to drag our carry-on luggage the half mile, out past security, to the main ticket counters.

    When we arrived there, we found a truly gigantic line at Spirit’s still undermanned ticket counter, and after standing in that line for over an hour, we arrived at the front, only to be told there were no other flights leaving for Fort Lauderdale. And if we wanted to cancel outright, and just go home there was a problem with that, too. Our checked luggage was held hostage in some locked place, somewhere, and with all the people needing attention, it could be quite some time until it could be retrieved.

    So my wife and I endured yet another security line, to re-enter O’Hare, search out some airline food, and wait . . . and wait . . . and wait. Meanwhile, other Spirit flights departed with regularity, some even going to Fort Lauderdale, but nothing could be done for the passengers of infamous flight #433.

    Shortly before 11:00PM, we were told our flight was delayed until 11:15, and indeed it did take off then, finally. By the time we landed, obtained our rental car and arrived at our destination, we had been awake almost 24 hours, with no sleep and minimal food. For people in our 70’s, this is no walk in the park.

    During all this time, the Spirit people continually lied, made excuses or disappeared altogether, at no time exhibited an ability or even willingness to assist their passengers.

    At one point the passengers became so angered with this treatment, the Spirit people called the police. (This was the alternative to actually providing service.) Five burly Chicago cops showed up to threaten that any more obstreperous behavior would result in arrests of Spirit passengers.

    A woman who identified herself as a Spirit manager told the police she didn’t understand the passengers’ attitude. After all she had offered to help people switch flights (by sending them out past security to that huge line at the ticket counter, where no flights were available.) And she had been so generous as to have given each passenger a $50 chit for lunch. This set off another round of howls. She actually had given each passenger a $7 chit, which is Spirit’s standard allowance, as it is pre-printed on the chit. Two more Spirit lies.

    I have flown for 60 years. I understand weather delays. I understand equipment delays. I even understand sitting on the tarmac for an hour. What I don’t understand is lie after lie after lie. I don’t understand a 14 hour delay in perfect weather, when the airline has other flights going to the same and other destinations.

    But, I guess I don’t understand the Spirit airlines passenger “service” system.

    Rodger Malcolm Mitchell

    P.S. Just in case your solution to the problem is to send me a voucher for a future Spirit flight, save your energy. That would be like a restaurant giving a voucher for a free meal to someone who had contracted botulism at that restaurant. The inclination for a repeat isn’t there.

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    1. Bad service and an example of “no alternative” transportation. Until 1960 there was quality passenger train service to virtually all points in the US and Canada. Within 10 years it was all thrown away and a skeletal Amtrak left in its stead. Too bad – a Pennsylvania Railroad “South Wind” would have been a better choice to from CHI to Florida than Spirit, if it still existed.

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  2. Ha! Living in Detroit, I have flown Spirit many times, and have vowed never to do so again. But – that’s OK with Spirit’s management. They have made it well known that they do not care about their customer. The reason: It costs money to provide customer service. They obviously don’t make money on their $9 flights, but they do when the planes are almost full and you pay the same as a legacy carrier. In the end, it is just a different marketing policy to get people in the door.

    However, because they have loss leader fares, I would probably fly them again – only if I was retired and had absolutely no time table.

    But this very fact I think actually goes against the point you were trying to make about government vs private enterprise. When you get fed up with Spirit, you can decide if you would like to pay more money to purchase customer service. For many government services, that is not an option.

    I believe that is the kernel behind the opposition to a single payer healthcare policy in the US (no choices). Of course, you could always purchase supplemental insurance, but everyone gets it in their head that, government services are all or nothing. Meaning – if the government provides health care, the coverage for the poorest must be equal to that of the richest. But, if the government doesn’t provide it, there is no issues with disparity. I don’t get it, but that’s what’s in the back of many people’s minds.

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  3. Rodger — That’s a shame about your experience, but your P.S. is great. And you are absolutely right about gov’t vs. private service. We elected a new license commissioner recently and she has made car tag renewal almost a pleasure.

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  4. “Big government is necessary to control big business, and often provides better service, because it is not profit-constrained.” Well Roger you got that wrong. There are a number of Government Agencies who work on profit margins and they make plenty of mistakes. Instead of going out of business, they get extra funding to get them by. You see, in the federal government everyone is too big to fail. Now, for your unfortunate plain trip, did the word Spirit Airline make any sense to you? I think their code name is “Fly-by-night”, but I could be wrong.

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  5. Rodger,
    I think it is wrong to compare bad service between private and govt sectors.
    The BIG difference between a bad service in the private sector vs government, is that we, the consumers, can take our private business elsewhere, but are forced to use the same government service without an alternative.
    If Spirit airlines continues to treat their customers this way, people will stop using then and go to other airlines and eventually Spirit will go out of business and close shop (unless they are too big to fail & the govt props them up by bailing them out!).
    Will that ever happen in the govt sector? We have to live with the same bad service that DMV or any other public facing department provides. No one is accountable for their performance, thanks to public unions.
    -net

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  6. Readers have made the point that one has the option of changing private suppliers, an option one does not have with government suppliers. I agree, but only partly.

    The realities are that it is very difficult to change private suppliers, when the big boys collude. Take airlines. For many routes there is only one or two, and they both provide lousy service. In fact it is difficult to think of one domestic airline that provides good service, and in the unlikely event there is one, they probably don’t fly the routes I need. So the notion that competition forces better service is great in text books, but not in reality.

    Take oil companies. Is there some way to switch suppliers to improve costs, service or ecological concerns? Not that I know of, especially since they all trade oil with one another.

    Take pharmaceutical firms. Are you going to switch from Merck to Pfizer?

    Take banks. Yes, you can switch your local bank, but what could you do to prevent the big bank criminality that caused the recession? Does Goldman really care what you do?

    Take chemical companies. Are you going to switch from Dow to BASF to prevent one from poisoning our air, water and earth?

    The list goes on and on. It is a practical impossibility for consumers to control big industry, merely by voting with their feet. Even with federal regulation, many of these companies have gone wild. Imagine the situation with less federal regulation.

    And what motivates bad service? The drive for profits combined with lax regulation.

    Rodger Malcolm Mitchell

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  7. Yes. But people feel better if they think they have choice although they have no real choice.
    Its like voting for party A or B in political elections….

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    1. Yes that comical cartoon is supplemented by this incredibly ignorant comment by the cartoonist, Joshua Brown.:

      This type of boom-in-a-time-of-bust can only be explained as the unintended (or perhaps intended) consequence of the Federal spending freight train and the effervescent bull market in law-writing and lobbying.

      Oh, really? The recession was caused by too much federal spending? Too many laws? Gimme a break. Or better yet, give Mr. Brown some knowledge of Monetary Sovereignty. Jason, too.

      Rodger Malcolm Mitchell

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      1. That is not what he said. He states the boom in the D.C. area can only be caused by the “effervescent bull market in law-writing AND lobbying”. There is no blaming the bust on federal spending. He rightly (in my view) points out that lobbyists are getting rich, they are the 1%. Lobbyists can only get rich if the government is getting ultra-involved in picking winners and losers in the private sector. The more government control, the more to be gained and lost by influencing legislation.

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        1. He said, ” . . . consequence of the Federal spending freight train . . .” You said, “There is no blaming the bust on federal spending.” Huh?

          As for the big “AND,” there is no connection between lobbying and the amount of “law writing.” Lobbying does as much to prevent laws (perhaps more) as it does to create laws. And the number of laws has nothing to do with the “boom – bust” he mentioned.

          You really shouldn’t try to make excuses for his foolish statement, by twisting his words.

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  8. Candice Choi, AP Business Writer, On Sunday October 30, 2011

    NEW YORK (AP) — Passengers on a JetBlue plane were stranded on the tarmac in Connecticut for more than seven hours Saturday.

    A passenger on a plane diverted to Bradley International Airport says the plane ran out of snacks and bottled water for the last few hours of the ordeal.

    “The toilets were backed up. When you flushed, nothing would happen,” said Andrew Carter, a reporter for the Florida Sun Sentinel, who was traveling to cover the Miami Dolphins game against the New York Giants. His plane took off from Fort Lauderdale for Newark International Airport at around 9 a.m. After being diverted to Hartford, the plane sat on the tarmac between around 1:30 p.m. and 9 p.m., he said.

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  9. Calendar:

    1. Flight took place on 10/24 (and ended 10/25!).

    2. Contacted Spirit customer “service” on 10/26, as soon as I recovered.

    3. 11/2/11: “Dear Mr. Mitchell, Thank you for contacting Spirit Airlines. It’s a pleasure to assist you. Our employees are expected to provide the utmost in professionalism and respect to our valued customers.
    Immediately upon reading your complaint, I conferred with our Chicago Station Manager. Please allow me a few days to further research this issue.
    Thank you for bringing his incident to our attention. Rest assured, it will be addressed with the seriousness it warrants.

    Thank you!

    Sincerely,

    Nikki 54425
    Corporate Consumer Relations
    Spirit Airlines, Inc.

    4. Emailed Nikki 54425, asking what was being done. I guess Spirit doesn’t consider this incident serious.

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  10. Hilarious note from Spirit airlines:

    Dear Mr. Mitchell,

    Thank you for your continued correspondence with Spirit Airlines.

    54425 is my employee number. We’ve extended courtesy $50 dollar Future Travel Credit under your
    reservation code OCYSFK. The expiration date is 12/23/2011 per person with the following
    information:

    1- Phyllis Mitchell – 16436291512200012
    2- Rodger Mitchell – 16436295532400011

    You can redeem Future Travel Credit yourself online at http://www.spirit.com. After you select your desired travel dates, city pairs, flight times and contact information, while in the screen titled Confirm Flights, scroll down to the button labeled “Redeem Here” next to “Vouchers and Credits”. Enter your original locator number numbers in that tab labeled “Reservation Credit” field and hit the “Go” button. You will be shown the available credit amount for the new reservation. Enter the amount that you want to apply in the “Amount to Spend” field and hit the “Apply” button. It will then apply the amount of the voucher to your reservation. This process must be complete before entering your payment information.
    Future Travel Credit are good for travel booked within 60 days of issuance for travel on any flight available in the system. NO extensions can be given if the credit is not used by the expiration date. Credits can be used for airfare, seat fees and bag fees. The credit can only be used by the person who it is issued to. You can also redeem your credit with our Reservations Center at 1-800-772-7117, please reference your original locator when speaking with an agent.

    At your service always!

    Again, we apologized for the inconvenience.

    Thank you!

    Sincerely,

    Nikki 54425
    Corporate Consumer Relations
    SPIRIT AIRLINES, Inc.

    Today, I received a phone call from Nikki, offering me a coupon for future flights — on Spirit. Are you kidding? I politely declined and asked for a refund on my ticket. She said she couldn’t do that, because they had “fulfilled their contract.”

    It gets better and better.

    Like

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