In what could be titled “the Risks of Being Ruled by Progressive Experts,” the WSJ shows the apparent consequences of lawyers and judges untethered from business reality.
As news breaks out on the death of Spirit Airlines, the Journal writes of the tragedy to Spirit’s more than 15,000 employees. Although, as the WSJ points out, at least taxpayers didn’t have to pony up for a bailout.
You may wonder, how could this have happened? Give dubious credit to the last administration’s main culprits: The antitrust theorists of the Biden administration.
Timothy Wu, Jonathan Kanter, Lina Khan, and others on the left sought to revive long-discredited theories of antitrust that view nearly all mergers as anti-competitive. It seems Mr. Kanter’s tested that view on the airline industry with disastrous results.
The Biden Justice Department in 2021 challenged a JetBlue Airways alliance with American Airlines. JetBlue offered Spirit a $3.8 billion merger for the companies to offer more competition for the four US airline giants.
Mr. Kanter’s Antitrust Division sued to block the merger in 2023 and prevailed in court in January 2024 in one of the most bizarre opinions.
The judge ruled that the merger violated antitrust law because it would eliminate one low-fare option on some routes.
JetBlue ended its merger bid soon thereafter, and Spirit declared bankruptcy in November 2024, long before the Iran war fuel spike. Now it’s shutting down for good. As these columns warned after the judge’s ruling, “Justice has essentially set Spirit up for failure.”
“Congratulations” from the Journal to Judge Young: “With Spirit’s demise, that low-fare option is gone.”
What is likely to happen is the big boys will gobble up Spirit’s planes, airport gates, and other assets.” That means there will be less competition than if the merger had been allowed. JetBlue is also struggling these days. Judge Young, the Journal reminds the judge, owes those Spirit employees and the traveling public an apology. Mr. Kanter does also.
The Khan New Deal-era view of antitrust has long been in disrepute after rigorous analysis by Robert Bork and the law and economics scholars in the academy.
The Trump-era Republicans have fallen for the Khan New Deal-era view of antitrust that was long in disrepute after rigorous analysis by Robert Bork and the law and economics scholars in the academy, government, and the judiciary. Gail Slater, a Khan aficionado, was recently forced out of her job as Mr. Kanter’s successor.
When lawyers and politicians indulge in theories untethered to business reality, the results can be tragic for the lives and livelihoods of thousands of people. It’s another lesson in the risks of being ruled by progressive “experts.”
