The Saturday Exhale Episode 20: Why Chaos Is Good Business

AT: Have you ever wondered why mild, routine occurrences, such as a lightning storm lasting an hour in the summer, can lead to mass chaos at the largest airports in the United States? Why every time a completely routine event such as this occurs, the response by airline and airport staff is one of complete incompetence, the entire infrastructure and logistical operations overwhelmed by what should be expected and accounted for? Perhaps why the larger the airport, the more populous the city, the more likely a chain of events will lead to mass chaos? Flights that inexplicably get canceled, for nonsensical reasons, while at small, regional airports, flights are able to push off in much worse conditions?

What if I told you that the system of regulations and financial reward incentivizes mass cancellations, at least intermittently, and the larger the cancellation wave, in metropolitan areas capable of absorbing the brunt, the greater the profit? First, let’s take a step back and remember Hanlon’s razor: never attribute to malice what can easily be explained by incompetence. But, what if both are true? What if the system evolved in a manner that incentivizes incompetence—leading to a reality where fixing emergent issues would penalize those tasked with fixing them (corporate executives), creating a situation in which resolving consumer issues in order to provide better service would be a demonstrable breach of fiduciary duty by the executives in a position to suggest improvements?

As I write this I’m sitting and reflecting on the last 29 hours. Inclement weather yesterday, July 18, in the New York City region led to the cancellation of roughly 1,250 flights. Cancellations began around 1PM, and the time in which flights weren’t pushing out from the gate due to weather concerns was roughly one hour. Yet, this hour disruption led to upwards of 150,000 people stranded, delayed, and distressed. In this distress, the multinationals will be expected to have made a substantial spike in revenue; my quick math estimates in the range of $100-200 million in additional revenue.

The first flight I personally watched cancel was an Alaska Air flight from JFK to San Francisco. Passengers were returning to the gate, having received an email that they would be boarding, just to be told that the flight had been cancelled due to the “poor weather conditions” (inexplicably and unjustifiably, as I will soon detail). Meanwhile, our flight to Seattle kept preparing to board; the crew kept boarding the plane, waiting for a “window,” just to leave for a delay. I pressed for the head gate agent on duty to level with me, having my 8 month pregnant wife and 14 month old daughter with me, not wanting them to be going back and forth from the lounge to the gate with every false promise of imminent boarding. The gate agent advised he wasn’t sure why the crew kept being asked to board, as the plane had “yet to be fueled or had the catering supplied,” and “multiple flights were ahead of us on the priority list” with “only one refuelling truck working.”

I asked if the flight crew repeatedly boarding just to de-board was accelerating the clock on when they’d “time out,” and he confirmed it would, stating he wasn’t sure why they kept getting on the plane. He then advised that, in his opinion, the flight was at best delayed another 2 hours, but he believed it was a 50/50 it would be canceled. The above said, in my searches, it seems the “duty clock” was the same whether they were on the plane waiting, or in the lounge, so the gate agent could have been mistaken.

Regardless, family in tow, I hedged my bet and booked a flight to Las Vegas, and then an early AM flight home to the Seattle area, knowing the likelihood of another Seattle flight were functionally zero (all were already sold out). An hour later, the flight to Seattle was cancelled “due to the weather,” while Alaska flights to Anchorage and San Diego were boarding, and took off—two of the flights the gate agent advised were ahead of the Seattle flight in priority to fuel and cater. It seems unlikely that “weather” caused flights to Seattle and San Francisco to be cancelled, when the same airline, same airplanes, from the same location, were able to fly to San Diego, Anchorage, and Los Angeles just before, and then to Portland shortly after. I digress.

As we made our way to a different terminal, a Jet Blue flight to Las Vegas at 10PM, the weather report seemed promising. The rain had all but stopped, and no lightning remained in the forecast. We arrived at our gate, after waiting in the lounge for a few hours, and the flight was being prepared to board. The crew was there, and ready. I asked the gate agent, and confirmed that the flight had been fueled, bags loaded, catered, the crew was arrived and ready, and everything was on track. Then, it never boarded.

As everyone sat confused and waiting, it was announced on the intercom that another flight, to Santo Domingo, would be “immediately departing from Gate 521,” the gate where the flight to Las Vegas was about to board from. The gate agents were in disarray, and after being called, left, as did the crew for Las Vegas. A new crew, and a wave of people, arrived for Santo Domingo. It was advised the Las Vegas flight would take off “immediately following Santo Domingo,” giving a buffer of 30 minutes between, what seemed to be an impossible timeline. This was further rendered impossible when time went by and Santo Domingo never boarded.

As our 10 PM departure, rescheduled to 11:30, became an impossibility, the clock passing 11:30, I ventured to speak to the gate agent for the Santo Domingo flight. I asked what the status was, and she advised that the plane at the gate was the one designated for Las Vegas; that it had not left the gate to make room for the plane heading to Santo Domingo, as it still needed the luggage removed, the catering removed, and to have the A/C “de-charged.” I asked how it was possible to conduct all of that activity, with limited crews, and then re-cater, load bags, charge the A/C, and bring the plane back to take off, being it was 11:40 PM. The gate agent responded she didn’t know, but was being told both flights would take off.

I, quite loudly, brought up that every hotel in Brooklyn and Queens was sold out on at the very least the Bonvoy and Accor apps/websites, with only a handful of hotels with any rooms in Manhattan, and none in any city in New Jersey near Newark airport. That the cheapest rooms I was able to see were $1,700 for the night, and that in less than 20 minutes, that option would be gone for anyone waiting, as the websites do not allow booking for the “day before” after the clock strikes midnight. I added that, since it is same day, booking now would mean the room is “non cancellable” if the flights did, in fact, take off. Multiple passengers became extremely concerned, quickly going on their phones to verify, and the gate agent, in disbelief, said “that’s a really big problem.” She called someone immediately, presumably management, and the flights were cancelled minutes later, just before 11:50.

Already having secured accommodations, knowing there was a functional 0% chance the flight would take off, I stayed to grill the gate agents with some other passengers. They were reporting that “they’ve been advised the flights are canceled due to the weather,” however that is a bold faced lie. Airlines are allowed to claim weather if weather conditions create a chain of unpreventable events that lead to cancellations, even if the weather has resolved. This is not a case where that is true.

In pressing why the flight was canceled, given the plane to Las Vegas was fueled, catered, air conditioning was charged, bags loaded, and a full crew present, the one gate agent advised that “we looked into having Las Vegas fly out, but the first officer timed out during the wait”—the first officer that was cleared 2 hours prior, I should add. Crew availability is tightly monitored. There’s a functionally 0% chance JetBlue did not know that a two hour delay would leave them without the first officer; they chose to move Santo Domingo, cause chaos, knowing full well Las Vegas would never take off. I advised all listening to write down that chain of events for their compensation, while the gate agent chimed in that JetBlue would likely argue it, and that they’ll pay out a “maximum of $250 for accommodations,” of which no hotel existed at that price point, and she had no vouchers to provide.

Let’s look into why an event like this would be a net positive for the airlines. First, many flights seemed to have plenty of free room on them. The cancellations served to fill up every flight to be fully sold. Second, as I will detail much more comprehensively at a later time, the network of large publicly traded companies that run much of our “economy” is a functional monopoly—their duty being to the market itself, and each other. Control of the multinational corporations making up the largest corporations on the major “lists” such as the Fortune and S&P 500, omitting perhaps a few select outliers and including and many others not on the list, amount to being what functionally controlled by three firms (Vanguard, Black Rock, and State Street), with over a quarter of the control being from one of these three firms; ownership structures and holdings are largely uniform between them. Moreover, the S&P 500, as of 2025, is 92% intangible valuation, as opposed to being 83% tangible in 1975, meaning the perpetuity and power of these corporations is predicated upon the continued artificial stock market valuations. Basically, what’s good for one of these entities is good for the entirety, as small gains and losses pale in consideration to the massive implosion that could occur if this perception ever changes.

Back to how the profit occurs. There are laws against price gouging, and price fixing. However, there is a modern workaround: just as observant Jews have figured out a way to “outsmart” their religious restrictions, namely conducting many activities on the Shabbat, by erecting an “Eruv” around Manhattan, making all of Manhattan a “structure” exempt from the rules—the Eruv is basically a string line, by the way—dynamic pricing software and algorithms serve as a corporate “Eruv” protecting against price gouging and price fixing laws, by eliminating any need for active coordination or conspiracy.

Because every corporation knows what will occur when there is a wave of cancellations in any industry providing a need, none need to coordinate during such events. In fact, they are rewarded for creating chaos, knowing full-well each of their pseudo-competitors’ software will be automatically triggered, creating a united wave. Critically, these software programs remove the legal need of “coordinated action” for competitors to engage in the act. They all know that each of them runs the same software. Since they’re all multinationals, controlled by the same funds, these dynamic price spike waves create massive profit windfalls whenever initiated.

Consider the situation I just sat through:

Inclement weather causes flights to be delayed, possibly a small amount of flights to be cancelled. A single company notes this and cancels another wave of flights. The flights could have taken off; weather subsided, crews were available, but the airlines intentionally have the crews board early, before the next known rain or snow spike, leading to them to “time out.” Alternatively, prioritizing takeoffs in orders that create higher cancellation rates, rather than maximizing for passengers brought to final destinations.

These intentional logistical failures, which the airlines declare as weather events to ensure passengers aren’t compensated, lead to a cascade of cancelations. The cascade triggers all dynamic pricing systems to spike into massive gouging surcharges, and flights sell out for several days into the future, spreading to other major airports as well. I watched as flights in Las Vegas, where I had decided to re-route to, began selling out fast; and hotels in Vegas began spiking in cost, as well. Apparently, others had my idea. I’m sure this occurred in many other cities.

This causes a secondary wave of hotel bookings, causing yet another dynamic pricing trigger, selling out all regional hotels in multiple markets. This cascade can lead to tens if not hundreds of millions in revenue spikes, a transference of wealth from the middle class to the multinationals. Consider this rough hypothetical below:

• Roughly 1250 cancelled flights with 120 people a flight, 150,000 people affected
• Let’s say the top 10% did what I did, and tried to buy surging seats left on flights still operating (of course some will be like me and got cancelled again), so maybe 5% got through.
• Let’s say average $1500 a ticket for that 5% of 150,000, so 7500 x 1500, a meagre $11m
• But then of the remaining 142,500 people, let’s say 75% needed a hotel. Let’s also say that most of these who needed a hotel didn’t have to book late like me, and average it out to $1,200 per room, $128m
• But, then the majority of that 5% that got through need a hotel in a new city. Vegas spiked, at the very least. Let’s say 75% of that 7,250, at $500: another $2.7m.

This adds perhaps $140-150m for what was 30-60 minutes of lightning followed by light drizzle. It assumes that every passenger was single, a poor assumption, but also that every passenger was stranded for just one night—another poor assumption, as we spoke to individuals and groups advising they’d been rebooked two, three, and in one case four days later. I kept the math simple for simplicity, but I suspect it is undercounted. It also doesn’t account for increased spending at hotel restaurants, or lost finances due to surging Uber and taxi costs (my Uber to the airport the next day was $500 for a 40 minute ride), nor for lost wages, childcare expenses, and the list goes on.

Laws need to be erected in order to stop this. Dynamic pricing should be recognized as price gouging and fixing software, as once installed each corporation understands they do not need to coordinate in order to begin a cascade. They simply need to initiate a first action, and the software all competitors run, which have been set and programmed in a conscious and deliberate, premeditated manner, will be triggered into coordinated action.

Furthermore, the government currently only protects consumers for safety (poorly, as of late, when considering the airline industry). There is no oversight on logistical contingencies for expected and frequent events, such as winter snow, or summer lightning. As I alluded at the start, not only are there no incentives for executives to enact logistical safeguards, they’d breach fiduciary duty in doing so. If major airports and airlines cannot recover from a one-hour disruption, due to lack of crews for fueling and catering, then their very plan is to fail any time a mild event occurs.

If airlines lost financially in these events, they’d quickly contract the third party companies offering catering and fueling to have “on call” staff, and additional fueling trucks ready to work “double time” when weather delays are resolved. However, they reap financial reward for these expected events, the sole losers being the consumer class footing the entire bill, both financially and from a mental stress perspective.

Active conspiracy, or emergent behavior leading to tacit collusion, it matters not. Corporations are substantially rewarded for creating chaotic and disruptive situations, without any legal or regulatory ramifications, while our government, those supposedly protecting us, not only allow this to occur, yet erect regulations helping to facilitate it.

Nothing changes unless our behavior does, unless those profiting from destructive and parasitic extraction are held accountable. Otherwise, these events will continue, they’ll intensify, and eventually every last drop of wealth, fictitious currency and real ownership, will be pried from us. If you think you’re safe, you’re not. Your turn is just delayed, but it’s coming.

VG: I generally support free markets, viewing them as an extension of the human ‘biospirit’ that is characterized by barter, trade, and competition (cooperation, broadly conceived, is a collective form of competition which is done in the service of protecting a group from some ‘Other’). What I think some free-marketers fail to understand, even though it is in Economics 101 textbooks, is that monopolies are sometimes deleterious and sometimes they are not. There are natural monopolies, which exist for the reason that not everyone can start a nuclear power plant, an oil rig, or an airline. Alex describes the airlines as a kind of cartel profiting from your misery. I agree with him, and I agree that a solution to this will not come from ‘free markets’ and has to be legislated or enforced in some other way. The greatest theoretician of capitalism, Adam Smith, holds similar views:

The interest of the dealers [domestic producers], however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers [producers]. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.

The proposal of any new law or regulation of commerce which comes from this order [e.g., trade protectionism], ought always to be listened to with great precaution, and ought never to be adopted until after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men [e.g., domestic producers], whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

Keep in mind Smith was talking about trade protectionism on the part of the great producers: cartel-formation, not a freeing of the market for further competition. The people at the top don’t act like capitalists. They are, to borrow a term from Mark Fischer, Market Stalinists who wish to maintain control over their fiefdom: their consumers and an ever-expanding base of consumers. Just like a community needs a CEO (and a board of directors, etc.), as I stated in a previous newsletter, big projects need to be done by big actors. This is how these actors get entrenched. In Imperialism, the Highest Stage of Capitalism, Vladimir Lenin argues that the natural progression of capitalism is towards monopolization. Even though monopolies may be necessary, because they are natural monopolies, maybe he’s right.

AT: The problem is when these monopolies are faceless, with any reasonable ability to hold them accountable reduced. We all know the saying from Spiderman, albeit the concept is much more ancient, “with great power comes great responsibility.” The problem is that faceless entities, publicly traded multinationals, private equity backed companies, and so on, have almost immeasurable power, yet are able to skirt any responsibility by remaining faceless. There is no human to hold accountable, and this is where my support of free markets ends. I am a staunch capitalist, but only ethical and accountable capitalism. This does not currently exist for our largest companies, but it can, and it must, again—or else the system will collapse, and a much worse one will take its place.