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Learning About Financialization the Hard Way

My Last Trip on LOT

by MICHAEL HUDSON

I should have suspected something was wrong when I took my first step into Terminal 1 at JFK. I was on my way to Riga, and looking for a flight with the shortest connecting times, I naively chose LOT, Poland’s national airline. Big mistake. I’m writing this article to warn other innocents – and to show what happens when an airline is crassly “financialized” to live in the short run and squeeze out revenue at the expense of fliers – and the nerves of its employees.

It was Wednesday, August 19. My e-ticket said Terminal 4, but the Air Train map showed LOT at Terminal 1, along with its Star Alliance partner Lufthansa, which I usually take.

Almost nobody in the terminal had a clue as to where the LOT counter might be. Lufthansa told me it was in Section E at the other end of the terminal. Someone else thought that it shared a counter with Air China, which might turn into a LOT counter when the current flight stopped boarding. A number of other airline workers claimed not to have heard of LOT or even of Poland.

I finally found that LOT was indeed in Terminal 4. Apparently it had sought to make a profit by swapping its gates with the higher Terminal 1 site value. This often happens when companies try to squeeze their operations and make money by selling off their parts.

I got back on the Air Train and found the LOT counter in Terminal 4. I asked the check-in agent whether many people made the mistake of following the Air-Train’s map. Only 3 that day, she said, but I was 3 hours early for the flight. (I like to work in airports and on the plane without disturbance, as I get much work done on long-distance flights.)

Many airlines have cut back their flights to Riga since Latvia’s property bubble burst last year. There is no longer a Berlin connection, and Lufthansa’s prices rise sharply in summertime. The connection via Warsaw was $300 cheaper, and shorter (if one could believe LOT schedules, which I will not do again). I thought I would save my hosts the difference. Harmony Center is the governing political party of Riga, and is trying to get Latvia out of the mess that neoliberals created by imposing what the World Bank applauded as one of the world’s most “business friendly” economies: the highest flat tax on labor in Europe (nearly 60 per cent), almost no property tax at all, no consumer or workplace regulation (or at least no enforcement). Business-friendly enough to have the lowest living standards, highest death rates, worst health and most polarized economies. Men and women who are able have been emigrating to flee the neoliberal disaster. I was being brought over to propose an alternative policy.

The plane was sitting on the ground, being loaded with what turned out to be the worst junk food I’ve had on an airline. But at least everything seemed on time.

Until the pilot pressed the starter button. Nothing happened. After we sat there for awhile, the captain announced that he couldn’t get the plane started and was waiting for a mechanic. After an hour on the tarmac I began to wonder why a pilot couldn’t hotwire the engines, like car thieves do in the movies.

After about 90 minutes the captain announced that we had to go back to the gate. But about half an hour later he said that he thought he’d solved the problem. All that remained was to be towed onto the runway to rev up and take off.

That took another hour. Apparently the tug-truck had to make its way to Terminal 4 – one more problem with changing terminals.

Many of the passengers were concerned about missing their connection flights. Many (including me) were down to just a few minutes leeway for transfer. I hoped that the fact that other passengers also were going to Riga meant that they would hold the flight a few minutes. The alternative, the attendants told us, was that either there would be another flight in ten or twelve hours, or we would have to stay overnight and catch the flight the next day – if there was indeed room on it.

The rising anxiety of the passengers prompted various stewardesses to tell us about what they actually felt to be the problem. The summer time’s heavy traffic meant that LOT planes were used more intensively. This meant more breakdowns. In what seemed to be crocodile tears, they assured us that the delay was for our own safety. It happened about three times a month for the JFK–Warsaw leg, one stewardess explained, bringing our attention to the fact that the planes were quite old.

I sensed that employees were not altogether happy with LOT, but were taking the usual subtle Central European approach in just how to convey this fact to us by backhanded complements on how the airline was coping with the safety issue of making sure that their overused, run-down planes would not crash. Later, on the flight back to the United States, I was given another reason: To cope with the busy summer business, LOT had slashed the normal turn-around times. Holding up an aircraft even for ten minutes would not leave enough time to meet the next scheduled takeoff, causing backups all along the system. Insufficient leeway had been built into the schedule to hold up planes for even a few minutes to cope with the delays that in fact normally occur.

We took off three hours late. As we approached Warsaw on what was Thursday morning there, I was as much on pins and needles as the other passengers. I was to be met by the Secretary General of Riga’s governing party, and worried that his retinue would find no one to meet.

The stewardess gave us the bad news just before landing: The purser had spoken with Control in Warsaw, and they refused to hold the plane. Apparently, the stewardess explained, this would hurt their on-time statistic. Passengers who still had a few minutes leeway to catch the plane to Vienna got the same answer.

The stewardess let the most seriously affected people in to the business class in front – it had almost entirely empty (only 2 seats) during the flight. She wanted to let us know she was doing what she could, regardless of the intransigence in Warsaw, which she said, wringing her hands in genuine disgust, was completely out of the control of the flight crew. As we neared the gate, various words from the stewardess and purser came out like “unimaginable,” “unbelievable” in a number of languages. They seemed to enjoy criticizing LOT’s planners.

I asked the purser whether they couldn’t have a cart drive us quickly to the gate. The purser said, no, it was all up to a particular individual, and he overruled this. The crew promised that there indeed would be somebody to meet the passengers at the gate to give guidance. But if nobody showed up, they said, we should go to the blue Transfer Booth.

Nobody showed up, and people were running toward the transfer booth – but didn’t know quite which way to run. Those of us who got there first were told that in fact if we ran very fast, they would hold the plane for us. An elderly woman in white, an old man and I soaked our clothes with sweat running for gate B29 – without really knowing where it was.

The first stymie was a security check, which seemed to take over 10 minutes a person (for three people). I’ve never quite seen so slow and deliberate  a check. (Two children and their father.) We all got through it, and ran and ran on to the gate.

Nobody was there. No attendant. There was a plane, but passengers told us that it wasn’t for the flight to Riga. After mulling around, we made our way back to the Transfer Desk.

This is where the LOT employees seemed to have fun explaining that the decision wasn’t up to them at all, it was up to the operations department. “Not our department,” one lady at the transfer desk said, (Yes, people still say this.) “You’ve got to go to the LOT office upstairs.”

So I went. A passenger from Australia started to yell at the lady there. “We don’t care,” she replied. “It’s not up to us. If we cared we’d go crazy. It’s another department.”

“What’s your name,” the man asked. I want to report you. Why wouldn’t the plane wait ten minutes for all these people?”

“We need to leave on time. We have a schedule, don’t you see?” she replied.

“But if you’re concerned about the schedule, what about the three hours form New York? Why not make it up by holding the plane for ten minutes rather than making everyone wait many hours, or even a whole day more?”

“As I said, all we care about right now is our on-time schedule,” she explained. The exchange got increasingly rude. While he was still arguing, the Latvian woman and I made our way back down to the transfer desk, where we found a group of three kids going to Austria. “But we saw the plane taking off just as we were at the gate,” one girl said.

The transfer staff explained once again that “We’re trying to keep to a tight schedule. It’s all up to the operations department, not us.” There was a note of impudence in the person’s voice. “We would never make that decision. Don’t blame us. Blame the people who told the plane to take off without waiting.”

It became apparent that being harassed angry passengers had become a normal experience for the transfer personnel, and they had learned simply to smile. In fact, they seemed to be doing what they could to make the passengers even more furious toward LOT. I gathered that labor-employer relations were not warm.

Those of us going to Riga were told that there was not a flight until late that evening. We naturally asked to be flown to another city to catch another airline to get there sooner, but were told that LOT would not do this. By this time the Australian had come down, even redder in the face than when we had left him, and said he needed to sleep somewhere, not on the terminal floor. He was told that he would have to pay what sounded like $400 to go to a hotel for his layover.

I myself was exhausted. It was the equivalent of 5:30 or 6 AM New York time. My immediate objective was to connect my laptop to let my hosts in Riga know that I wouldn’t be on the flight they were meeting in just an hour. They did let me use the phone to call the wife of my Latvian host (back in New Jersey) and send him an Internet message about the delay. And as a backup plan, I persuaded them to let me go to the business lounge. They gave me food vouchers for breakfast and lunch.

The result turned out to be an 11-hour layover in hell – LOT in Warsaw is something like Lot in Sodom. There was no food in the lounge, only liquor. I had hoped to sleep in the lounge and get at least some fruit. But it was small and crowded. Unlike even economy class on Lufthansa there were no English language newspapers. Evidently Star Alliance does not have any uniform policies of customer relations. LOT provided no Financial Times, Wall Street Journal or USA Today such as one gets on most airlines. And the chairs were not well designed for rest.

After about an hour, I heard my name being paged. It was my friend Prof. Jeff Sommers who had organized the Riga conference. His voice was angry as he told me how he had tried to find out what happened to me, without much help from LOT. He had been calling almost at random until he found me. We agreed to postpone the speech I was to give early the next morning, as I wouldn’t be getting into Riga until almost midnight – or so the schedule said. (It turned out to be wrong.)

Around 1 PM it seemed time for lunch. But when I tried to use my LOT voucher, I found that no cafeteria would take the voucher. “That’s for LOT,” they said, laughing – with almost a stage laughter for my own benefit, a demeaning tone that showed there was no love lost toward LOT.

So I went back to the lounge and asked how I was supposed to survive for twelve hours with a voucher that seemingly nobody would take.

This was the opening the staff seemed to be waiting for. With a grin as big as a shark’s they informed me that they weren’t LOT employees, and therefore were not responsible for LOT’s way of doing business. They were a separate lounge company, served other airlines besides LOT. They made it clear that LOT was a bit different from the others. The concierge said that there was just one restaurant at the airport that would indeed take the voucher. But it was in the furthest reach of the airport, in another terminal. He walked me there.

And walked, and walked, past many active restaurants with good-looking food and many customers. Finally, at the end of the entire walkway, there was a cafeteria. Although larger than the other restaurants, it was empty except for one person snoozing at a table. The cause of the lack of customers was clear enough. It had packaged sandwiches and a small hot table. The lady in charge explained to me that I could have one hot dish, but nothing to drink – LOT didn’t pay for water or any other beverages. All that would be extra, payable in local currency.

I had never been in Poland and had no expectations that I would be, so I had a very dry lunch – remarkably, it was even worse than the food I had on the plane, despite the fact that LOT has pressed bad airline food to a new dimension.

I made my way back to the lounge until finally the appointed 8:45 PM boarding time arrived. On the way to the distant terminal I met the woman who had joined me up front in the business-class cabin as we had landed and with whom I had run to the gate that morning. We were told that the plane wouldn’t be leaving on time, however, because of mechanical failure. Yet another! We were told the delay would be 30 minutes, but it stretched out to 40, for a flight that was only scheduled to take about 90 minutes. (That 45 percent overrun was more than normal, the plane’s stewardess assured us.)

The passengers shared LOT horror stories among themselves. It became apparent that I had not done adequate market research before I agreed to take LOT. I hadn’t realized it was a cut-cost, cut-service airline, providing food vouchers for the inedible while working its staff and planes alike to the breaking point.

Passengers were angry. The staff’s response was half angry, but also evidently half glad to see that passengers were as annoyed at their employer as they themselves were. As in New York, the new delay for mechanical problems was said to be “to make us safe with all the extra use these planes are getting in summer.” The tone of voice was not so much to say that we are lucky that LOT was taking such good care of our lives, but that it was over-working its aircraft to the breaking point, almost as much as it seemed to be overworking the staff.

I sat there to write down the day’s events in the hope of saving others from the horror of having to fly on LOT. The airline has effectively prevented policy flexibility by employees to cope with problems that inevitably arise in air travel. This “go by the book” attitude shows hat the airline’s management doesn’t care much about how its customers feel. The book they go by is purely exploitative.

I’ve been on numerous Riga trips where the plane has been held up as much as 20 minutes for passengers on connecting flights. Even the Long Island Railroad often waits. It became clear why the business class section of the planes to and from New York were so empty. (The trip back was almost equally disturbing, but I think readers will have got the picture by now.)

MICHAEL HUDSON is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his website, mh@michael-hudson.com