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News Link • Transportation: Air Travel

The Unfriendly Skies

• EuroPac.Net

As if the federal government were not already doing enough to kill the U.S. airline industry with restrictive workplace rules, over-regulation, and a monetary policy that supports higher fuel prices, earlier this month anti-trust authorities at the Justice Department blocked the merger between American Airlines and US Air. (Unbelievably, the regulatory roadblock was thrown up more than a year after the two companies had agreed to terms, and after great expense has been incurred to integrate operations). Although long suffering investors had hoped that the merger would allow the beleaguered airline to finally exit bankruptcy, in the days after the surprise announcement, AMR stock almost fell as much as 60%.

Entire columns could be written on why the government had little reason to stop this particular merger, (the preponderance of other air carriers and transportation alternatives) or why the entire "anti-trust" apparatus of the government has done, and will do, nothing to support the living standards of average Americans, but the bigger story here involves the diminished scope of the airline industry in general. The difficulties that U.S. carriers face, which is the driver behind the current "urge to merge," provides us with clear insight into the health of the broader economy.

Over the last few weeks, I have made a few attempts to show how government sleight of hand may be making our economy appear to be healthier than it actually is. For instance, I showed how in recent years initial reports of GDP growth have consistently been far too optimistic, thereby creating a false narrative about the current recovery. I also pointed out how the inflation measures used to calculate GDP have been consistently below other inflation yardsticks, and may have led to overestimates of economic growth. Instead of looking at government yardsticks, I have suggested that the truth can be better observed by looking at the demonstrable changes in living standards.

1 Comments in Response to

Comment by Powell Gammill
Entered on:

Let us not forget the federal government runs the TSA who singlehandedly destroyed the short flight hop runs.   Anyone living within a two hour drive between cities is certainly not going to take a plane.  Now the TSA is working in the three hour drive stops.


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