Biden and McCain both wrong on bundling

See Whatever We Are Doing is Wrong by David Henderson.

"Eric Boehm, in “Taylor Swift, Junk Fees, and the ‘Happy Meal’ Fallacy,” Reason, October 2023, does a nice job of explaining the case for, in some instances, charging separately for some components of a purchase rather than for bundling.

In his State of the Union address, President Biden discussed the pressing issue of whether airlines should charge an air fare plus extra charges for various special features, or should charge a price for a bundle that doesn’t allow people to choose the individual components. Biden, in his wisdom, proposed the latter and, strangely, claimed that it would save people money. Boehm writes:

Consider the budget airlines that currently offer low fares but charge additional fees for picking seats, bringing bags (sometimes even carry-on luggage), and getting in-flight snacks. If those airlines have to bundle all those costs together for every flyer, passengers who want to travel light, are willing to sit anywhere, and can go 90 minutes without a snack will have to pay more so that other travelers can avoid paying for those things à la carte.

The second group won’t pay less; they’ll just pay it all upfront. Meanwhile, a low-cost option will disappear for the first group. Instead of being able to evaluate tradeoffs—should I save money even if that means I don’t get to sit with my traveling companions?—consumers would face a market with fewer choices.

Well said.

Reading it made me recall an earlier issue on which a life arranger from a different political party, John McCain, proposed forced unbundling. In 2013, he proposed legislation to force cable companies to let people choose specific components separately rather than charging for a bundle.

What do Biden and McCain have in common? They think they know better than the individuals and companies buying and selling and they’re so confident about it that they want (or, in McCain’s case, wanted) to use force to get their way. Whatever we’re doing, according to them, is wrong."