Pluralistic: The learned helplessness of Pete Buttigieg (10 Jan 2023)


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A vector drawing of a man slumped at a desk with his face on his laptop. The man's face has been replaced with that of Transport Secretary Pete Buttigieg. He has a DOT logo on his shoulder. There are also DOT logos on a coffee-cup on the desk and behind the desk, on the wall.

The learned helplessness of Pete Buttigieg (permalink)

The apocalyptic airline meltdown over the Christmas break stranded thousands of Americans, ruining their vacations and costing them a fortune in unexpected fees. It wasn't just Southwest Airlines' meltdown, either – as stranded fliers sought alternatives, airlines like AA raised the price of some domestic coach tickets to over $10,000.

This didn't come out of nowhere. Southwest's growth strategy has seen the airlines add more planes and routes without a comparable investment in back-end systems, including crew scheduling systems. SWA's unions have spent years warning the public that their employer's IT Infrastructure was one crisis away from total collapse.

But successive administrations have failed to act on those warnings. Under Obama and Trump, the DoT was content to let "the market" discipline the monopoly carriers, though both administrations were happy to wave through anticompetitive mergers that weakened the power of markets to provide that discipline. Obama waved through the United/Continental merger and the Southwest/AirTran merger, while Trump waved through Virgin/Alaska.

While these firms were allowed to privatize their gains, Uncle Sucker paid for their losses. Trump handed the airlines $54 billion in Covid relief, which the airlines squandered on stock buybacks and executive bonuses, while gutting their own employee rosters with early retirement buyouts:

https://www.bloomberg.com/opinion/articles/2020-05-04/airlines-got-the-sweetest-coronavirus-bailout-around

Incredibly, the airlines got even worse under the Biden administration. In the first six months of 2022, US airlines cancelled more flights than they had in all of 2021, while the airlines increased their profits by 45% – and kept it, rather than using it to pay back the $10b in unpaid refunds they owed to fliers:

https://www.economicliberties.us/press-release/economic-liberties-releases-model-legislation-to-eliminate-airlines-liability-shield/

Dozens of state attorneys general – Republicans and Democrats – wrote to Transportation Secretary Pete Buttigieg, begging him to take action on the airlines. After months without action, they wrote again, just days before the Christmas meltdown:

https://www.levernews.com/state-officials-warned-buttigieg-about-airline-mess/

For his part, Secretary Buttigieg claimed he was doing all he could, trumpeting the order to refund fliers as evidence of his muscular regulatory approach (recall that these refunds have not been paid). He assured Americans that the situation "is going to get better by the holidays."

https://www.youtube.com/watch?v=6FlD6fHq8-g&t=145s

But the numbers tell the tale. Under Buttigieg, the DOT "issued fewer enforcement orders in 2021 than in any single year of the Trump and Obama administrations."

https://www.economicliberties.us/press-release/economic-liberties-releases-model-legislation-to-eliminate-airlines-liability-shield/

As the crisis raged, enraged fliers and opponents of unchecked corporate power blamed Buttigieg. So did opportunistic, bad-faith Republicans looking to score political points. The "liberal" media lumped all this criticism together, insisting that Buttigieg had done everything in his power and declaring it unreasonable to expect the Transport Secretary to prevent transportation catastrophes:

https://www.levernews.com/the-partisan-ghost-in-the-media-machine/

Buttigieg's defenders trotted out a laundry list of excuses for the failure, ranging from the nonsensical to the implausible to the contradictory – Pete's Army continued to claim that the aviation meltdown was the weather's fault, even after Buttigieg himself went on national TV to say this wasn't the case:

https://twitter.com/GMA/status/1608075800254767105?s=20&t=wmaJq3OWU0r0e6TS9V-9sA

Buttigieg is the Secretary of a powerful administrative agency, and as such, he has broad powers. Neither he nor his predecessors have had the courage to wield that power, all of them evincing a kind of learned helplessness in the face of industry lobbying. But there is a difference between being powerless and acting powerless.

To see what a fully operational battle-station looks like, cast your eye upon Lina Khan, chair of the FTC, another agency that has a long history of dormancy in the face of corporate power, but which Khan has transformed – not through ideology, but through competence. Khan – and her fellow Biden administration trustbusters Jonathan Kantor and the recently departed Tim Wu – have an encyclopedic knowledge of their powers, and they haven't been shy about using them:

https://pluralistic.net/2022/10/18/administrative-competence/#i-know-stuff

Over the Christmas break, even as the airline industry was stranding Americans far from their families, Khan proposed a rule to ban noncompete agreements, which are widely used to prevent low-waged workers like fast-food cashiers from quitting their jobs and seeking better pay from competitors:

https://mattstoller.substack.com/p/antitrust-enforcers-to-ban-indentured

These are, as Matthew Stoller writes, a form of indentured servitude, used by private equity crooks to lock in their workforces. "30% of hair stylists works under a non-compete, as do 45% of family physicians." Noncompetes destroy the livelihoods of workers who start their own businesses, too: "One comment to the FTC came from a graphic designers for signage who was bankrupted by a lawsuit from her control-hungry former boss and a small town judge":

https://www.regulations.gov/comment/FTC-2019-0093-0015

Noncompetes are a scourge, and there should be bipartisan agreement on this. If you're a Democrat who believes in labor rights, noncompetes are manifestly unfair. But that's also true if you're a Republican who believes in competition and the power of entrepreneurship.

Nevertheless, noncompetes have festered, with neither Congress nor the administrative branch showing the courage to act – until now. Khan's proposed rule bypasses Congressional inaction by invoking powers that she already has, under Section 5 of the Federal Trade Commission Act.

Section 5 gives the FTC broad powers to prohibit "unfair methods of competition" – an incredibly broad power to wield, and one that the FTC hasn't bothered to use since the 1970s (!):

https://casetext.com/case/national-petroleum-refiners-assn-v-f-t-c

Which brings me back to Secretary Buttigieg and the airlines. Because Chair Khan isn't the only federal regulator with these broad powers. As David Dayen writes for The American Prospect, "the Department of Transportation has the exact same authority":

https://prospect.org/infrastructure/transportation/ftc-noncompete-airline-flight-cancellation-buttigieg/

Under USC40 Section 41712(a), Buttigieg has the power to unilaterally ban transportation industry practices that are "unfair and deceptive" or use "unfair methods of competition." Per the DOT's own guidance, this provision is "modeled on Section 5 of the Federal Trade Commission Act":

https://www.govinfo.gov/content/pkg/USCODE-2020-title49/pdf/USCODE-2020-title49-subtitleVII-partA-subpartii-chap417-subchapI-sec41712.pdf

The are a lot more recent examples of the DOT using this power than there are of the FTC using its Section 5 authority, like the Tarmac Delay Rule. But as Robert Kuttner writes, the airlines reneged on their end of the $54b bailout, slashing staffing levels and failing to invest in IT modernization – examples of the "unfair and deceptive" practices that the DOT could intervene to prevent:

https://prospect.org/infrastructure/transportation/ftc-noncompete-airline-flight-cancellation-buttigieg/

As Dayen writes, "The definition of 'deceptive' is 'likely to mislead a consumer, acting reasonably under the circumstances.' If the airline scheduled a flight, took money for the flight, and knew it would have to cancel it (or, if you prefer, knew it would have to cancel some flights, all of which it took money for), that seems plainly deceptive."

This is the same authority that Buttigieg used to fine 5 non-US airlines (and Frontier, the tiny US carrier that flies 2% of domestic routes) for cancelling their flights – his signature achievement to date. But as Dayen points out, this authority isn't limited to taking action after the fact.

The DOT can – and should – act before Americans' flights are canceled. It can use its authority under 41712(a) to "say that the cancellation itself is an unfair and deceptive practice and issue a fine for each canceled flight." It could "promulgate a rule saying that cancellations due to insufficient crews, or due to dysfunctional computer scheduling systems, are unfair and deceptive, with stiff fines for each violation."

Both of these were within Buttigieg's power months ago, when the State AGs begged him to take action to prevent the mounting epidemic of cancellations. Both of these are within his power now. Heads of federal agencies are among the most powerful people in the world and they can use that power to materially improve the lives of the American people.

Just ask Lina Khan.

(Image: Gage Skidmore, CC BY-SA 2.0, modified)

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