danwyd

The point is that there's a serious opportunity cost. By prioritizing customer service (to some degree), airlines can't charge sell space to businesses moving cargo for a higher margin.

The coffee shop argument doesn't really work because you can't keep scaling it. At a certain point people want space for books. But given that there's a space shortage on international flights, there's probably room for airlines to make more money by charging for freight instead of taking your luggage.

The comparison has to be with banks...

Does Citi diligently pay every penny in taxes it owes?

Does J.P. Morgan perfectly free of corruption and accusations of insider trading?

Does Goldman always deliver high returns to its clients and charge very reasonable fees always?

First sentence: "a fortune of about $1.5 billion in today’s dollars."

Fairy long article. Here's the summary:

Hedge funds are investment vehicles that have avoided being heavily-regulated because they only accept money from government-certified "accredited investors." Their investment strategies are secret and unconventional. Some of them deliver floods, while the average one doesn't do that well.

Hedge funds provide liquidity, which makes it easier to trade; and conduct arbitrage, so that prices are muscled into line before they get totally irrational. (The latter doesn't always work though.) Meanwhile, since they have fewer safety nets, hedge funds are more aggressive about monitoring their own risk. They're better than banks in that respect, which are much more heavily leveraged and which have a history of being supported by the government when they mess up. Hedge funds have never been bailed out by the government like banks have time and again.