By Robert A. Vella
The dangers of corporatism (i.e. the close association between big business and government) have been discussed repeatedly on this blog. It is by far the greatest contributor to political corruption in America and elsewhere. And, it’s getting worse by the day. The following story provides an illustrative example of just how pernicious this problem really is.
Three years ago, the Obama administration unleashed its might on behalf of beleaguered American air travelers, filing suit to block a mega-merger between American Airlines and US Airways. The Justice Department laid out a case that went well beyond one merger.
“Increasing consolidation among large airlines has hurt passengers,” the lawsuit said. “The major airlines have copied each other in raising fares, imposing new fees on travelers, reducing or eliminating service on a number of city pairs, and downgrading amenities.”
The Obama administration itself had helped create that reality by approving two previous mergers in the industry, which had seen nine major players shrink to five in a decade. In the lawsuit, the government was effectively admitting it had been wrong. It was now making a stand.
Then a mere three months later, the government stunned observers by backing down.