When Secretary of Transportation Elaine Chao named Frances B. “Fran” Smith to the Aviation Consumer Protection Advisory Committee (ACPAC) last year, the Chicago Tribune carried a column headlined “Chao to Consumers: Drop Dead.”
The headline was a takeoff on the famous New York Daily News headline of 1975, “Ford to City: Drop Dead,” when the Ford administration refused a bail out to the financially strapped city of New York. But why was this appointment seen as such a betrayal of consumers?
The Chicago columnist cited her chief sin: “opposing regulations.” An adjunct fellow at the Competitive Enterprise Institute (CEI), Smith has a different philosophy of how to fulfill her role in looking out for consumers while serving on this committee. Smith wants to ensure that the consumer gets the best deal the marketplace can offer by encouraging industry competition, choice, and transparency.
Too many so-called consumer advocates seek to use government regulations to gain consumer protections, but that’s not the best way to achieve that aim, says Smith. “It’s a mistake to believe that consumer protection can be done only through government,” Smith explains. “CEI and free market groups believe that competition in the markets creates benefits for consumers, giving them more choices. Government mandates generally limit the choices that consumers can have. That’s not in their interests.”
Too many so-called consumer advocates seek to use government regulations to promote consumer protection, but that’s not the best way to achieve that aim, says Smith. “It’s a mistake to believe that consumer protection can be done only through government,” Smith explains.
“I come from a background in the financial industry,” she continues. “What if there were only one kind of credit card? I use a credit card with a very high interest rate, but for some people that would be a terrible choice. But I pay off my credit card every month. For somebody who carries it over, that would be a bad credit card. One-size-fits-all often is what government comes up with, but our idea of consumer protection is one that allows people to make their own decisions.”
Fran Bivona grew up in New Orleans in an Irish-Italian family whose life revolved around good food and the Catholic Church. She lived in an uptown neighborhood, within walking distance of Tulane University. Her father owned a restaurant and grocery store. “I grew up eating like only New Orleanians do,” she recalls. “My father was a terrific cook and so was my mother. I still cook their Creole dishes, mainly seafood gumbos and jambalaya. But I still can't fry oysters as well as my father or make cream puffs as well as my mom. I grew up surrounded by wonderful cooking, and mother, father, aunt who lived next door, grandmother.”
For grammar school, Fran attended St. Rita School (founded in 1924), walking to school most days with neighborhood kids, and then won an academic scholarship to St. Mary’s Dominican High School, a private, all-girls school then located on the tree-lined St. Charles Avenue. The high school was founded by Irish nuns in the nineteenth century, and its alumnae roster includes Judge Amy Coney Barrett, Fox News anchor Arthel Neville, and former President Barack Obama’s Environmental Protection Agency head, Lisa Jackson. Fran remembers it as “a terrific school.”
After Dominican, Fran enrolled in the University of New Orleans (then Louisiana State University in New Orleans), where she became heavily involved with the LSUNO Workshop Theater. But the city’s turbulent racial atmosphere intruded into the Workshop Theater. Fran, who had acted in New Orleans little theater and in high school plays, landed her first leading role. It was a big deal: the U.S. premiere of Italian playwright Ugo Betti’s The Queen and the Rebels. A black student, Louis Washington, was cast as the male lead.
All hell broke loose. The racist New Orleans Citizens Council mounted a protest and the board received a barrage of complaints, most unprintable. The play was cancelled. “We just couldn't believe it,” Fran recalls. “And as I said, UNO was an integrated university. It was one of the early ones to be integrated, but you still had things like that happening that would just bring you up short and you'd say, ‘What's going on? How can this be?’”
Fran, who frequented meetings of the Student Nonviolent Coordinating Committee (SNCC), which supported bringing about racial integration by direct, nonviolent actions, had the city’s troubled racial politics very much on her mind when she met her future husband, Fred L. Smith, Jr. at a college mixer. Smith was from a Louisiana town so tiny it didn’t even have a proper name.
Fran landed her first lead role in the U.S. premiere of Italian playwright Ugo Betti’s The Queen and the Rebels. A black student was cast as the male lead. All hell broke loose. Fran, who attended meetings of the Student Nonviolent Coordinating Committee (SNCC), was furious when the university cancelled the play.
“If you've ever met my husband,” says Fran, “he's the most extroverted person who loves talking. I think that’s because he couldn't find many people to talk to growing up!” That night, Fred and Fran talked for hours. “We ended up talking about public policy,” Fran says. “It was a very fraught period of time. Fred and I both believed ardently in integration. At Tulane, which was established to educate white gentlemen, you could not even bring African American friends to social events.” Fred was briefly suspended from Tulane, she says, for doing just that.
Fran and Fred were married at Mater Dolorosa Catholic Church on Carrollton Avenue in New Orleans in 1963. The Smiths went onto graduate school – Fred at Harvard University and then Fran at the State University of New York at Buffalo. They lived in Philadelphia before coming to Washington in 1973. Fred did a stint working for the Environmental Protection Agency, where he saw “people who didn't know much about business making decisions that affected whole industries.” The Smiths wanted to do something about this.
“The story is that CEI was founded on our kitchen table, but it was actually our dining room table,” Fran recalls. “Fred wanted to form his own group that would stress economic freedom. It would combine advocacy with legal work and then with the intellectual public policy work. So, he wanted all of those working together. At that time, I was working for the financial services industry, making a very good salary. And we figured out that Fred could start CEI without any funding if I used some of my earnings to support it.” It started in the Smith apartment, with Fred and one other employee.
Now four decades old, CEI has an annual budget of more than $8 million and describes itself as “dedicated to advancing the principles of limited government, free enterprise, and individual liberty.” “We make the uncompromising case for economic freedom because we believe it is essential for entrepreneurship, innovation, and prosperity to flourish,” it states on its website.
“I grew up eating like only New Orleanians do,” Fran recalls. “My father was a terrific cook and so was my mother. I still cook their Creole dishes, mainly seafood gumbos and jambalaya. But I still can't fry oysters as well as my father or make cream puffs as well as my mom.”
Prior to her affiliation with CEI, Fran was executive director of Consumer Alert, a free-market consumer organization, from 1994 until she shuttered the group in 2005 and moved on to CEI. She has served as a consumer representative on the U.S. Trade Representative’s Trade and Environmental Policy Advisory Committee, which reviews international agreements involving the U.S.
Fran describes herself as a libertarian who believes that “individuals are better at making decisions affecting their lives than governments — even small governments, even local governments. Government puts restraints upon individuals and keeps them from being able to make decisions. This is especially harmful to entrepreneurs starting new businesses. All the legal red tape, all the bureaucracy. So, I favor small government and government doing only essentials, as opposed to getting involved in every aspect of people's lives.”
ACPAC is purely an advisory board, and it is not mandated to advise on one of the biggest concerns of all who fly: the cost of a seat on a plane. But Fran has some thoughts on this hot topic. Her thoughts boil down to two words: competition and transparency. “Airlines often have flights that are fully booked,” Smith says, “and different seats are preferable. Obviously middle seats aren't. I don't see anything wrong with paying different prices for seats. What I would like is that this is disclosed to consumers. How much are consumers told when they are shopping around? Why are some seats more expensive?
Fran describes herself as a libertarian who believes that “individuals are better at making decisions affecting their lives than governments — even small governments, even local governments. Government puts restraints upon individuals and keeps them from being able to make decisions. This is especially harmful to entrepreneurs starting new businesses. So, I favor small government and government doing only essentials, as opposed to getting involved in every aspect of people's lives.”
“If you're shopping around, say on a secondary site, on Expedia or Priceline, you might have just the base fare. You might then choose an airline that might have other fees tacked on. For instance, baggage, extra baggage fees for the first baggage, second piece of baggage, et cetera, for weight limits and such. All of those fees, you may not know about when you're booking. So, what are the standards that the airlines have? Consumers should know what they are buying. If those are sprung on you after you've booked thinking you've gotten the lowest price, there is a problem there.”
Another hot debate in aviation policy today revolves around the passenger facility charge (PFC), which permits airports to collect a fee up to $4.50 from every passenger. Smith supports this user fee rather than having a tax that the entire public pays. How could it be pro-consumer to tack a fee onto their ticket? Smith replies, “Well, the person who's using the service probably is better able to pay for that service and should be paying for the service directly, as opposed to being spread over all of taxpayers, many of whom may not ever use that service. So that would seem to me to be a rationale for that.”
Smith also serves on a related DOT task force that is making recommendations about sexual misconduct on airplanes. It’s a dicey topic. “We will be recommending to the committee best practices relating to training, how incidences are reported, and how the data are collected. For instance, we don't know the extent of the problem of sexual misconduct, because some people may report to DOT, some people report to the airline, some report when they get off the flight. So, data collection is not very good. We can encourage the airlines to look into how best to handle these situations, what's the first line of defense, and then reporting it to the proper authorities so that if it is a crime, the perpetrator can be apprehended.”
Smith may not be a typical consumer advocate—which is assumed to be an advocate for bigger and bigger government—but she is a true advocate for empowering people with more choice, more information, and more freedom about what they consume.