The interference of the government in the private sector is playing out this week in two sectors: Aviation and grocery.
In January, a judge blocked JetBlue’s acquisition of ultra-low-cost Spirit Airlines for $3.8 billion. On Monday, Spirit filed filed for Chapter 11 bankruptcy protection, unable to recover from the onerous, federally mandated Covid travel restrictions, and not allowed by the court to sell to JetBlue, the nation’s sixth-largest airline. Spirit is the seventh-largest.
Judge William Young said at the time, “A post-merger, combined firm of JetBlue and Spirit would likely place stronger competitive pressure on the larger airlines in the country” and that “the consumers that rely on Spirit’s unique, low-price model would likely be harmed.”
Attorney General Merrick Garland in January called the ruling “a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward.”
But now, Spirit Airlines is in trouble and cannot pay its bills. It’s unclear if this bankruptcy reorganization will end in a Chapter 7 bankruptcy and closure of the business altogether.
The parallels with the attempted merger of Albertsons and Kroger grocery retailers are ripe for comparison this week.
Rep. Mary Peltola vociferously opposed the merger of the two major grocers, saying it would harm Alaska consumers, even though the companies said they would spin off their Alaska properties as part of the merger. Alaska would not be impacted. Peltola has taken credit for stopping the merging of the two companies.
On Tuesday, not learning its lesson from the Spirit bankruptcy filing, the Federal Trade Commission moved to block the proposed merger between Kroger and Albertsons.
It’s one of the biggest interferences ever committed by the federal government in private-sector matters.
Albertsons has said that without the merger, it will have to rethink its entire business model to survive, including store closures and layoffs.
Albertsons, which owns Safeway, has struggled to compete in today’s rapidly evolving industry landscape, where its market share has declined significantly to Costco and Walmart.
Alaskans may see Safeway stores — Carrs-Safeway in Alaska — closed as a result. The FTC decision is also a gift to companies like Walmart and Sam’s Club, Costco, Amazon, and other behemoth companies that compete in the grocery and goods sector.
The FTC decision comes at a time when the Anchorage Assembly has increased the freight tariffs for food and other goods coming through the Port of Alaska. Alaska consumers are feeling the pressure as freight charges will increase by 7.5% in December, after the Assembly decided to get around the voter-imposed tax cap by creating a tariff that impacts Anchorage consumers and those across the state whose goods come through the port.
Weren’t the Democrats just up in arms a week or two ago when Trump said he would implement a tariff on goods coming into the US? And here you have the same DemoRATS implementing a tariff on their own citizens of Alaska.
Oh the hypocrisy!
dimlibby donkeys can’t see in a mirror!
Kroger stated on a financial show that by incorporating they will be able to control prices and increase Krogers worth… Monopolies are certainly not what we need. BTW, Fred Myer (Kroger) is selling salmon fillets from CHINA!
Thanks for the info on FM selling China’s Salmon Filets..Is it Salmon fished and caught in AK and then shipped to China for processing?? or is it all caught, bought and sold to China to process and then resold to AK via FM?
Anchorage Assembly is doing to Anchorage what Bidum/Harris did to this country, Peltola hasn’t done anything but Lie, Cheat and Swallow NO credit for anything else
We are a capitalistic society bring back the monopolies and robber barons of the days gone by! If your not born rich you don’t deserve to live a good life. Your sole purpose is to make money for the wealthy. You peasants should be grateful we even allow you to work.
We study history to learn from it. If we can discover what worked and what didn’t work, we can use this knowledge wisely to create a better future. Studying the triumph of American industry, for example, is important because it is the story of how the United States became the world’s leading economic power. Free markets worked well; government intervention usually failed. The years when this happened, from 1865 to the early 1900s, saw the U.S. encourage entrepreneurs indirectly by limiting government. Slavery was abolished and so was the income tax. Federal spending was slashed and federal budgets had surpluses almost every year in the late 1800s. In other words, the federal government created more freedom and a stable marketplace in which entrepreneurs could operate. Free markets worked well; government intervention usually failed.
Why is it, then, that for so many years, most historians have been teaching the opposite lesson? They have made no distinction between political entrepreneurs, who tried to succeed through federal aid, and market entrepreneurs, who avoided subsidies and sought to create better products at lower prices. Instead, most historians have preached that many, if not all, entrepreneurs were “robber barons.” They did not enrich the U.S. with their investments; instead, they bilked the public and corrupted political and economic life in America. Therefore, government intervention in the economy was needed to save the country from these greedy businessmen. This widely-accepted “history” of America’s Gilded Age is grossly inaccurate, but it tells a compelling story that many continue to fall for.
Here is an opportunity for you to educate yourself by merely reading:
“The Myth of the Robber Barons” by Burton Folsom
You need some medical attention ak 4 freedom, seek medical aid!
Not a word about government “interference” in Big Pharma price gouging, insurance-industry price gouging, Big Tech censorship…
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Maybe a different government?
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Be good to see the back of them.
In order to have any useful effect on ‘Big Pharma price-gouging’ the convoluted and twisted permutation of the original ACA will have to submit to serious reforms which involves Medicare, specialty contract pricing, PBMs, and private ‘health’ insurance –along the lines of what effects the megalomanic wannabes in grocery store monopolies. A different government isn’t going to help much. In fact, the incoming ‘big government’ is going to have its handsfull with tariff repercussions in the drug industry considering that a majority of generic drugs are manufactured elsewhere at this time. I don’t think anyone wants to witness loosening quality and legal restriction already barely enforced by the FDA (due to lack of inspection and enforcement of regulation).
As for grocery chains merging. Even Kroger admitted in court to price-fixing on price of eggs. Can you imagine if every grocery chain was price gouging that vulnerable product? It’s not like a person can go out and purchase eggs from ducks or even emus. Let alone the price effects on availability from bird flu and other existing causes for shortages which catapulted the most unfit ever candidate presidential candidate to ascend to cataclysmic and catastrophic height in American history. (Hyperbole helps take the sting out of it a bit.) So, yeah. Tariffs. Time to bring back Matanuska Maid and the Alaska chicken farmers.
I”m surprised that Capt Lewis just found out that the ocean fish sold by Kroger pass through the China fish processors. Why do you think the shrimp were so cheap?
This is illogical. If Albertsons/Safeway cannot compete against Walmart, Costco and Amazon, how is it logical that a Wholesaler based in the East Coast can make Safeway/Carrs work and compete in Alaska? Safeway/Albertsons currently can compete. Fred Meyer can easily compete with Walmart, (check prices, I do and Walmart is not cheaper than Fred Meyer on most items and the service sucks at Walmart). Safeway locally here is constrained with terrible service too. Remember, Safeway/Albertsons is owned by a Hedge Fund that sucks and sucked all the profit out of this company. The Merger should not be completed. This is not a Democrat/Republican issue especially here in Alaska. If Safeway cannot compete now and needs to be shut down, then having a East Coast wholesaler buy it makes no sense.
People that fail to realize these two chains exist outside of Alaska are the ones claiming this merger shouldn’t go through. It is absolutely necessary for them to be able to combine to remain competitive in what has become a very unbalanced market. The FTC has just proven it should butt out with the Sprit Air decision. Now they are doing it again. Two very bad decisions that will ultimately screw up both markets.
And they’re allowing the Alaska- Hawaiian merger post-haste!. But that’s DIFFERENT!!!
Only a fool believes merging two of the top three grocers will result in lower prices
frank I am pretty sure you are that only fool!
And yet black rock keeps inhaling businesses at a rate never seen before. This Kroger deal is pocket change to black rock, Berkshire, Carlyle. Where is the FTC watching these guys .?.
The closure of stores was already displayed if the merger were to happen. In Juneau we would lose our Safeway leaving only Fred Meyer and two smaller IGA stores. Sometimes government does need to interfere.
The FTC has ZERO basis for their decisions beyond protecting the big players in the markets they have interfered with. There is zero basis for their decision beyond that motive in both cases.
Prove it!
Prove it? Every day we go to each store it is proved by the prices.
With the anchorage ASSembly “members” actions, shipping goods will add the cost of goods, which we pay for at the checkout line. A merger provides more effecient shipping of goods to Alaska, which provides better savings at the checkout line.
You need to grocery shop at each to see for yourself the cost of goods.
Effeciencies are gained by consolidating them and making them bigger players. The bigger players receive better/lower shipping costs as there are more goods being shipped.
The more you spend, the better your savings as a larger organizatikn. Basic economics.
Agreed
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