Summary of "Southwest surprises, tariff guac shock, and fraud flourishes" The Indicator from Planet Money
Release Date: March 14, 2025
Hosts: Waylon Wong, Darian Woods, Kenny Malone
Produced by: NPR

Introduction

In this episode of The Indicator from Planet Money, hosts Waylon Wong, Darian Woods, and Kenny Malone delve into three significant economic topics: the alarming rise in fraud losses, Southwest Airlines' surprising policy changes regarding baggage fees, and the intricate dynamics of avocado consumption and related tariffs. The discussion is rich with data, expert insights, and relatable anecdotes, providing listeners with a comprehensive understanding of these pressing issues.

Surge in Fraud Losses

Key Statistics and Increase

Waylon Wong opens the discussion by highlighting a staggering rise in fraud-related losses. "My indicator is $12.5 billion. That is how much people lost to fraud in 2020," Wong states at [02:14]. This figure represents a significant 25% increase from the previous year, raising concerns about the effectiveness of current fraud prevention measures.

Types of Scams

Darian Woods references an insightful podcast series by The Economist titled Scam, Inc., emphasizing the issue of underreporting in fraud cases. "An expert that they interviewed there said that you should actually multiply the numbers because of underreporting," Woods explains at [02:34]. This suggests that the actual losses could be considerably higher than official statistics indicate.

Wong elaborates on the most prevalent scam types, particularly imposter scams. "[...] the most commonly reported category is something called an imposter scam. An example of this is when you get a phone call from someone, they say they've detected suspicious activity with your bank account [...]" [03:15]. These scams often involve urgent requests to transfer funds to seemingly secure accounts or to withdraw cash under false pretenses.

Impact on the FTC

The hosts discuss the Federal Trade Commission's (FTC) struggle to keep up with the surge in fraud cases. Wong mentions at [03:51], "the FTC later reversed this request. It said, it's fine. So, I don't know. These are confusing times." This indicates potential resource constraints and administrative challenges within the FTC, which could hamper its ability to effectively combat fraud.

Personal Accounts and Advice

Kenny Malone shares a personal sentiment, expressing fear of being defrauded: "Man, I am so scared of getting defrauded. I'll be honest" [04:19]. In response, Wong advises, "Just don't answer your phone" [04:22], noting that interaction over the phone leads to higher financial losses, with a median loss of $1,500 compared to the overall median of $500 [04:26].

Darian Woods reinforces the importance of vigilance by recounting a specific scam attempt: "Once somebody called me and they said, they're from the Department of Homeland Security [...] and then hung up" [04:41]. This example underscores the deceptive tactics scammers employ to gain victims' trust.

Southwest Airlines' Policy Change

New Baggage Policy

Transitioning to the second major topic, Kenny Malone introduces the change in Southwest Airlines' baggage policy. "My indicator this week is two, because that is the number of suitcases that you will not get to check for free anymore at Southwest Airlines" [04:53]. This marks the end of Southwest's long-standing policy that allowed all passengers to check bags for free.

The Trend of Unbundling

Wong provides context by explaining Southwest's previous stance against unbundling services: "They were saying that, like, we're not the other airlines who are breaking apart the flying experience into all its parts and then asking travelers to pay for things like bags or picking better seats" [06:03]. However, due to financial pressures, including significant layoffs and changes to their open seating policy, Southwest has now joined the industry trend of unbundling services.

Darian Woods aptly summarizes this shift: "So this is the unbundling trend that has taken over airlines and actually a lot of products" [06:16]. The hosts agree that Southwest's policy change signifies the completion of the great unbundling of air travel [06:22].

Implications for Consumers

Kenny Malone points out the immediate implications for travelers: "If you do want to fly for free with a Southwest bag, you do have a chance. Like, the new rules will only apply to flights booked on or after May 28th" [06:43]. This creates a sense of urgency for passengers to adjust their travel plans accordingly, whether by booking early or reconsidering their packing strategies.

Avocado Consumption and Tariffs

Rise in Avocado Consumption in the US

Darian Woods introduces the topic of avocado consumption with a compelling statistic: "£3 billion of avocados. That's how much avocado Americans are eating each year" [07:05]. The hosts calculate this to mean approximately 20 avocados per person annually, based on an average weight of half a pound per avocado [07:35].

Waylon Wong shares a personal anecdote, reflecting on the cultural shift toward avocados: "I didn't eat an avocado until college. It was probably at a Chipotle or something" [07:39]. Kenny Malone adds that the popularity was bolstered by extensive marketing campaigns, such as "Avocados from Mexico," which significantly increased consumer demand [09:15].

Tariffs and Trade Issues

The conversation shifts to the economic factors influencing avocado prices. Darian Woods explains the current trade tensions: "The US slapped 25% tariffs on steel and aluminum. There's been retaliatory tariffs from Canada and the European Union, and the Trump administration is still threatening a 25% tariff on everything from Canada and Mexico, including avocados" [08:40]. Given that approximately 80% of Hass avocados come from Mexico, these tariffs could substantially impact avocado prices and availability.

Wong connects this to historical trade policies, noting that the rise in avocado consumption began when Mexico was permitted to export to the US in 1997 [08:58]. This openness, combined with strategic marketing, laid the foundation for the avocado boom in the United States.

Potential Impact on Prices

Kenny Malone humorously speculates on the consequences: "Avocados from Broward County" [09:56], suggesting that locally grown avocados might not immediately substitute imports. The hosts anticipate that tariffs will likely lead to higher avocado prices, affecting both consumers and the overall market dynamics.

Darian Woods mentions that the widespread tariffs on Mexico are currently on pause until April 2nd, indicating that the situation is still fluid and dependent on ongoing negotiations between the White House and Mexico [09:46].

Conclusion

The episode adeptly navigates through three distinct yet impactful economic topics:

1. Fraud Losses: The significant uptick in fraud-related losses highlights the growing sophistication of scams and the challenges faced by regulatory bodies like the FTC in combating them. Personal anecdotes and expert insights underscore the necessity for heightened consumer vigilance.

2. Southwest Airlines' Policy Change: The shift away from free checked bags by Southwest Airlines marks a pivotal moment in the airline industry's move toward unbundling services. This change reflects broader economic pressures and has direct implications for travelers' costs and behaviors.

3. Avocado Consumption and Tariffs: The substantial increase in avocado consumption in the US, driven by effective marketing and favorable trade policies, now faces potential setbacks due to rising trade tensions and impending tariffs. This situation exemplifies the delicate interplay between consumer trends and international trade policies.

Overall, the hosts provide a nuanced analysis of each topic, enriched by relevant data, poignant quotes, and engaging dialogue, making the complex economic issues accessible and relatable to listeners.

Notable Quotes:

• Waylon Wong on fraud losses: "$12.5 billion is how much people lost to fraud in 2020" ([02:14]).
• Darian Woods on underreporting scams: "You should actually multiply the numbers because of underreporting" ([02:34]).
• Kenny Malone describing Southwest's baggage policy change: "My indicator this week is two, because that is the number of suitcases that you will not get to check for free anymore at Southwest Airlines" ([04:53]).
• Darian Woods on avocado tariffs: "The US slapped 25% tariffs on steel and aluminum... including avocados" ([08:40]).
• Waylon Wong reflecting on avocado consumption: "I didn't eat an avocado until college. It was probably at a Chipotle or something" ([07:39]).