What Happens When Corporations Hate Their Own Customers

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The current commentary explosion on social media of Chicago airport security guards forcibly pulling a man off a United Airlines plane is deeply disturbing because everyone who has flown can relate to some degree of passenger mistreatment.

Of course, three men have not pulled us from our seats in a closed container. Still, the callous, sterile, “we are only doing our jobs” attitude of the people who have the most contact with passengers—stewards and stewardesses—has become a caricature of disassociated corporations with almost complete disdain for their customers.

It’s simple: Decades of de-regulated capitalism created airline overbookings, bank and investment company frauds, and Trump’s continued deregulation push will make consumer abuses worse.

This is prevalent in the airline industry, as the current online video shows, and how airlines can routinely overbook sets, charge for every possible amenity, and squeeze every inch out of seats and legroom to pack more people onto a single plane. Worse, we have all heard about people who have been delayed from takeoffs and then forced to spend hours in a plane as it sits idle on the runway, with no effort to allow people to disembark after waiting for hours in a cramped, stuffy container.

While the airlines may be in the headlines today, the other large industry that hates its customers is financial services.

This industry’s distain for its own customers is worse than the airline industry’s since saving for retirement, college, or just plain life is regarded as secondary to the ability of investment firms, banks, and insurance companies to do everything in their power to separate unsuspecting and uninformed customer-investors from their money by charging excessive fees, commissions, or inappropriate expensive products.

The net effect of this systemic re-routing of hard-earned customer money into the coffers of investment and banking firms contributes to the current retirement crisis. When this is combined with the disturbing video of the passenger being pulled from the United airplane, it could become a tipping point for disgruntled Americans to protest the dominance of unregulated capitalism against their rights, as well as their own financial and personal security.

This is why a flash point could happen as the Trump administration moves aggressively towards more federal de-regulation. At the same time, customer abuses have become legitimatized after decades of systemic de-regulation. While the average American cannot articulate it, they correctly suspect that this continued power shift towards greater corporatism is coming at the expense of their individual liberties and financial security.

Abuses by the Financial Services Industry

While the financial services, airlines, and communications industries have been beneficiaries of regulatory capture (an academic term that explains how regulators become servants of the industry they are supposed to be regulating), the financial services industry has perfected this practice. In addition to manipulating regulators, the industry regularly takes millions of dollars annually from their customers through fees and profits. It then perversely uses that same customer money to hire lobbying firms that push to enact regulations, laws, and rules at the state and federal levels to work precisely against the best interests of their customer investors. 

That’s why we see that the financial services lobby is the largest in Washington. Worse, it is almost entirely funded by customer money. In the perverted logic of corporate America, this means customer money is being used to push anti-customer laws and regulations.

Today, the financial services lobby is the largest in Washington, spending $1.4 billion in the 2016 election cycle. Open Secrets said “the financial sector is far and away the largest source of campaign contributions to federal candidates and parties, with insurance companies, securities and investment firms, real estate interests and commercial banks providing the bulk of that money.” 

What that money buys is continued deregulation, lax enforcement of existing rules, control over regulatory agencies, and access to any pending legislation that threatens the iron fist of the financial services business always to have the upper hand against its customers.

So, when we see a man being dragged off a plane, we can all relate to it.  In some form, we have all suffered the discomfort of flying on airlines that want our airfares and do the minimum to make customers comfortable. No blankets, no chips; keep your elbows out of the aisle. The evasive answers to delays offered by pilots and cabin attendants, complete with their frozen smiles, fake affection, lack of eye contact, and empty slogans (“We certainly appreciate your business. Have a great day.”), all wear very thin after years of going to the airport and the more intrusive TSA lines.

So, if United is wondering about the causes of what the media calls its current PR nightmare, its management should know it is not about a single event caught on cellphones. It is fueled by the pent-up disgust with how airlines treat their customers in a monopoly capitalist situation where we don’t have that many choices and where elected leaders have failed to build more modern airports to accommodate more passengers.

The airlines know the public has few choices to fly, and airlines only compete on price, so the public is squeezed into smaller and smaller seats, with less and less common decency provided by the airlines.

It’s Even Worse in the Financial Services Industry

In the financial services industry, we have seen the criminality from the mortgage fraud that caused the 2008 recession. We also have seen the global felony that affected millions of unsuspecting investors worldwide, as prosecutors made the case that traders at some of the world’s largest banks rigged LIBOR rates, foreign exchange, and gold and silver prices.

In the most recent charges, prosecutors charged traders in January 2017 at Barclays, JPMorgan Chase, and Citibank, some of the largest banks in the world, with conspiring to rig exchange markets through discussions in an electronic chat room known as The Cartel, according to a news report on Bloomberg news.

The financial services industry also shows few signs of changing its anti-customer behavior. But, thankfully, for astute customers, investors have more choices when finding a replacement. This is because more online investing firms focus on keeping fees and expenses down such as Betterment, Wealthfront, Robinhood, Motif, Future Advisor, and Personal Capital, and for banking services, Aspiration or credit unions.

These firms are online and emphasize lower fees, so more money goes into your account. This is critical because the only investment variables any investor can control are fees, expenses, and how much you save.  All else is up to the random moves of the markets.

There are also customer-owned, co-op credit unions to counter the criminal acts of the world’s largest banks, which engage in price rigging (Chase, JP Morgan, Barclays, Barclays, UBS, Bank of America, JPMorgan Chase, and the Royal Bank of Scotland) and domestic fraud against their own customers (Wells Fargo).

So when we see a man being victimized by a large corporation that overbooked its flight, read about a customer at Well-Fargo who had credit cards issued without their permission, or a class action lawsuit filed by 401(k) investors who paid too much for mutual funds, we should recognize this is the way too many global corporations do business in a near-monopoly marketplace.

The public’s power in these abusive situations is simple: walk away from criminal or arrant corporations that do not care about you. Close your checking account at a bank that makes the news for price rigging. Instead, go to a credit union. Close your account at a money management firm or financial advisor who pushes you to buy proprietary, more expensive mutual funds.

So, as we approach baseball season, remember that to protect your hard-earned money, adopt the “one strike and you’re out rule.” Don’t let a corporation or financial advisor lead you into their territory without making them provide good reasons. Even then, take their advice and evaluate it by an informed third party. This is the only way to protect yourself against the friendly corporation that hates you.

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