The US government is very good at destroying things on the pretense that its actions are required to save the things destroyed.
“It became necessary to destroy the town to save it,” an unnamed major was famously quoted as saying in 1968 in reference to the indiscriminate bombing of the provincial capital of Bến Tre in southern Vietnam during the Vietnam War.
The government destroys the economy in the name of saving it and harms consumers in the name of protecting them, too.
The New York Times, which is ever in favor of massive government interventionism into the economy, provides an example of the government harming consumers with ostensibly benevolent intent by reporting that Spirit Airlines has filed for bankruptcy.
The relevant background about the company is provided:
The airline began operations as a trucking company operating under a different name in 1964. It later became a tour operator and started offering flights in 1990. Two years later, it became Spirit Airlines.
But the company’s modern incarnation traces its roots to 2006, when Indigo Partners, a private equity fund, acquired a majority stake. Under Indigo and the leadership of Ben Baldanza — who spent a decade as Spirit’s chief executive and died this month — the airline focused on lowering costs and selling cheap, bare-bones tickets.
That business model made the airline the butt of late-night jokes, but also helped to reshape the industry. Travelers flocked to Spirit for its low fares, often overlooking concerns about the quality of its service. The airline earned consistent profits, and other companies sought to copy its approach. Today, most U.S. airlines offer some version of a no-frills ticket.
Spirit also became a powerful force in the industry, pressuring others to lower fares.
The Times also explains the trouble that Spirit Airlines ran into: “The airline, which last reported an annual profit in 2019, has had trouble finding its footing after a federal judge blocked a planned merger with JetBlue Airways in January.”
It was ostensibly because the company had become such an important competitor in the industry to help lower fares that the US Department of Injustice decided it had to block the merger. As the Times elucidates, “That phenomenon became a central part of the Justice Department’s successful lawsuit to prevent the JetBlue-Spirit merger, on the grounds that losing Spirit would harm consumers.”
See, the government had to destroy Spirit Airlines to save it.
A conspiracy theorist might argue that the ostensible reason for blocking the merger was a false pretext, the true reason being that the government was colluding with the bigger airlines to help them maintain high prices by eliminating the smaller competition.
But we should not be too quick to overlook the possibility that people in government really just are that clueless and incompetent. “The road to hell,” the saying goes, “is paved with good intentions.”
So what do you think? Malevolence or just stupidity? Let me know in the comments below.
Also check out my relevant 2013 article “Joe Nocera’s Epic Fail: Lamenting Deregulation of the Airline Industry“, which provides a case study in cognitive dissonance typical among advocates of government interventionism into the market.
Cross-posted from JeremyRHammond.com.
