Today's links

Boeing, Spirit and Jetblue, a monopoly horror-story: 43 years later, Reagan's other shoe drops.
Hey look at this: Delights to delectate.
This day in history: 2004, 2009, 2014, 2019, 2023
Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading

The US Supreme Court building, backed by a starry sky. Sticking out of a hole in the steps is a Boeing 737 Max. The plane is Spirit Airlines yellow, but sports the Jetblue wordmarks and tail-livery.

Boeing, Spirit and Jetblue, a monopoly horror-story (permalink)

Correction 24 Jan 2024: This article originally asserted that no new US airline had launched in 14 years. Actually. Breeze Airways launched in 2021. I regret the error. (thanks, Richard Green!)

Last week, William Young, an 82 year old federal judge appointed by Ronald Reagan, blocked the merger of Spirit Airlines and Jetblue. It was a seismic event:

https://storage.courtlistener.com/recap/gov.uscourts.mad.254267/gov.uscourts.mad.254267.461.0_6.pdf

Seismic because the judge's opinion is full of rhetoric associated with the surging antitrust revival, sneeringly dismissed by corporate apologists as "hipster antitrust." Young called America's airlines an "oligopoly," a situation he blamed on out-of-control mergers. As Matt Stoller writes, this is the first airline merger to be blocked by the DOJ and DOT since deregulation in 1978:

https://www.thebignewsletter.com/p/antitrust-enforcers-block-the-jetblue

The judge wasn't shy about why he was reviving a pre-Jimmy Carter theory of antitrust: "[the merger] does violence to the core principle of antitrust law, '…to protect markets –- and its market participants — from anticompetitive harm."

The legal arguments the judge advances are fascinating and worthy of study:

https://twitter.com/johnmarknewman/status/1747343447227519122

But what really caught my eye was David Dayen's American Prospect article about the judge's commentary on the state of the aviation industry:

https://prospect.org/infrastructure/transportation/01-19-2024-how-boeing-ruined-the-jetblue-spirit-merger/

Why, after all, have Spirit and Jetblue been so ardent in pursuing mergers? Jetblue has had two failed merger attempts with Virgin, and this is the third time they've failed in an attempt to merge with Spirit. Spirit, meanwhile, just lost a bid to merge with Frontier. Why are these two airlines so obsessed with combining with each other or any other airline that will have them?

As Dayen explains, it's because US aviation has been consumed by monopoly, hollowed out to the point of near collapse, thanks to neoliberal policies at every part of the aviation supply-chain. For one thing, there's just not enough pilots, nor enough air-traffic controllers (recall that Reagan's first major act in office was to destroy the air traffic controller's union).

But even more importantly, there are no more planes. Boeing's waitlist for airplane delivery stretches to 2029. And Boeing is about to deliver a lot fewer planes, thanks to its disastrous corner-cutting, which grounded a vast global fleet of 737 Max aircraft (again):

https://prospect.org/infrastructure/transportation/2024-01-09-boeing-737-max-financial-mindset/

The 737 disaster(s) epitomize the problems of inbred, merger-obsessed capitalism. As Luke Goldstein wrote, the rampant defects in Boeing's products can be traced to the decision to approve Boeing's 1997 merger with McDonnell-Douglas, a company helmed by Jack Welch proteges, notorious for cost-cutting at the expense of reliability:

https://prospect.org/infrastructure/transportation/2024-01-09-boeing-737-max-financial-mindset/

Boeing veterans describe the merger as the victory of the bean-counters, which led to a company that chases short-term profits over safety and even the viability of its business:

https://www.airliners.net/forum/viewtopic.php?t=213075

After all, the merger turned Boeing into the single largest exporter in America, a company far too big to fail, teeing up tens of billions from Uncle Sucker, who also account for 40% of Boeing's income:

https://www.thebignewsletter.com/p/its-time-to-nationalize-and-then

The US government is full of ex-Boeing execs, just as Boeing's executive row is full of ex-US federal aviation regulators. Bill Clinton's administration oversaw the creation of Boeing's monopoly in the 1990s, but it was the GOP that rescued Boeing the first time the 737 Maxes started dropping out of the sky.

Boeing's biggest competitor is the state-owned Airbus, a joint venture whose major partners are the governments of France, Spain and Germany – governments that are at least theoretically capable of thinking about the public good, not short-term profits. Boeing's largest equity stakes are held by the Vanguard Group, Vanguard Group subfiler, Newport Trust Company, and State Street Corporation:

https://prospect.org/blogs-and-newsletters/tap/2024-01-18-airbus-advantage/

As Matt Stoller says, America has an airline that the public bails out, protects, and subsidizes but has no say over. Boeing has all the costs of public ownership and none of the advantages. It's the epitome of privatized gains and socialized losses.

This is Reagan's other legacy, besides the disastrous shortage of air-traffic controllers. The religious belief in deregulation – especially deregulation of antitrust enforcement – leads to a deregulated market. It leads to a market that is regulated by monopolists who secretly deliberate, behind closed board-room doors, and are accountable only to their shareholders. These private regulators are unlike government regulators, who are at least nominally bound by obligations to transparency and public accountability. But they share on thing in common with those public regulators: when they fuck up, the public has to pay for their mistakes.

It's a good thing Boeing's executives are too big to fail, because they fail constantly. Boeing execs who are warned by subcontractors of dangerous defects in their planes order those subcontractors to lie, or lose their contracts:

https://www.levernews.com/boeing-supplier-ignored-warnings-of-excessive-amount-of-defects-former-employees-allege/

As a result of Boeing's mismanagement, America's only aircraft supplier steadily has lost ground to Airbus, which today enjoys a 2:1 advantage over Boeing. But it's not just Boeing that's the weak link in aviation. US aviation is a chain entirely composed of weak links.

Take jet engines: Pratt & Whitney are Spirit's major engine supplier, but these engines suck as much as Boeing's fuselages. Much of Spirit's fleet is chronically grounded because the engines don't run. The reason Spirit buys its engines from those loveable goofballs at Pratt & Whitney? The Big Four airlines have bought all the engines for sale from other suppliers, leaving smaller airlines to buy their engines from fat-fingered incompetents.

This is why – as Dayen notes – smaller US airlines are so horny for intermarriage. They can't grow by adding routes, because there are no pilots. Even if they could get pilots, there'd be no slots because there are no air traffic controllers. But even if they could get pilots and slots, there are no planes, because Boeing sucks and Airbus can't make planes fast enough to supply the airlines that don't trust Boeing. And even if they could get aircraft, there are no engines because the Big Four aviation cartel cornered the market on working jet engines.

Part of Jetblue and Spirit's pitch was that they hand off the routes that they'd cut after their merger to other small airlines, like Frontier and Allegiant. But Frontier and Allegiant can't service those routes: they don't have pilots, slots, planes or engines.

Spirit hasn't been profitable since 2019 and is sitting on $4b in debt. Jetblue was proposing to finance its acquisition with another $3.5b in debt. The resulting airline could only be profitable by sharply cutting routes and massively raising prices, cutting 6.1m seats/year. With a debt:capital ratio of 111%, the company would have no slack and would need a bailout any time anything went wrong. Not coincidentally, the Big Four airlines also have debt:capital ratios of about 100-120%, and they do get bailouts ever time anything goes wrong.

~~As William McGee reminds us, it's been 14 years since anyone's started a new US airline:~~

~~https://twitter.com/WilliamJMcGee/status/1747363491445375072~~

Correction: Breeze Airways launched in 2021 (thanks, Richard Green!)

US aviation is deeply cursed. But Boeing's self-disassembling aircraft show us why we can't fix it by allowing mergers: private monopolies, shorn of the discipline of competition and regulation, are extraction machines that turn viable businesses into debt-wracked zombies.

This is a subject that's beautifully illustrated in Dayen's 2020 book Monopolized, in the chapter on health care:

https://pluralistic.net/2021/01/29/fractal-bullshit/#dayenu

The US health care system has been in trouble for a long time, but the current nightmare starts with the deregulation of pharma. Pharma companies interbred with one another in a string of incestuous marriages that produced these dysfunctional behemoths that were far better at shifting research costs to governments and squeezing customers than they were at making drugs. The pharma giants gouged hospitals for their products, and in response, hospitals underwent their own cousin-fucking merger orgy, producing regional monopolies that were powerful enough to resist pharma's price-hikes. But in growing large enough to resist pharma profiteering, the hospitals also became powerful enough to screw over insurers. Insurers then drained their own gene pool by combining with one another until most of us have three or fewer insurers we can sign up with – companies that are both big enough to refuse hospital price-hikes, and to hike premiums on us.

Thus monopoly begets monopoly: with health sewn up by monopolies in medical tech, drugs, pharmacy benefit managers, insurance, and hospitals, the only easy targets for goosing profits are people:

https://pluralistic.net/2022/01/05/hillrom/#baxter-international

This is how you get a US medical system that costs more than any other rich nation's system to operate, delivers worse outcomes than those other systems, and treats medical workers worse than any other wealthy country.

Now, rich people can still buy their way out of this mess, but you have to be very rich indeed to buy your way out of the commercial aviation system. There's a lot of 1%ers who fly commercial, and they're feeling the squeeze – and there's no way they're leasing their own jets.

Stein's Law holds that "anything that can't go on forever will eventually stop." America's aviation mergers – in airlines, aircraft and engines – have hollowed out the system. The powerful, brittle companies that control aviation have so much power over their workforce that they've turned air traffic controller and pilot into jobs that no one wants – and they used their bailout money to buy out the most senior staff's contracts, sending them to early retirement.

Now, I'm with the people who say that most of US aviation should be replaced with high-speed rail, but that's not why our technocrats and finance barons have gutted aviation. They did it to make a quick buck. A lot of quick bucks. Now the system is literally falling to pieces in midair. Now the system is literally on fire:

https://www.nytimes.com/2024/01/19/us/miami-boeing-plane-engine-fire.html

Which is how you get a Reagan appointed federal judge issuing an opinion that has me punching the air and shouting, "Yes, comrade! To the barricades!" Anything that can't go on forever will eventually stop. When the system is falling to pieces around you, ideology disintegrates like a 737 Max.

(Image: Vitaly Druchenok, CC BY-SA 4.0; Joe Ravi, CC BY-SA 3.0; modified)

Hey look at this (permalink)

Penguin Classics (1984) Triband sweater https://www.ravelry.com/patterns/library/penguin-classics-1984-triband-sweater (h/t Kottke)
The No AI Fraud Act Creates Way More Problems Than It Solves https://www.eff.org/deeplinks/2024/01/no-ai-fraud-act-creates-way-more-problems-it-solves
Another Hollywood strike? Musicians union ‘prepared to do whatever it needs’ for AI protections and streaming residuals https://www.cnn.com/2024/01/20/business/musicians-union-streaming-residuals-ai/index.html

A Wayback Machine banner.

This day in history (permalink)

#20yrsago Vote absentee, avoid Diebold machines http://www.zephoria.org/thoughts/archives/2004/01/22/avoid_diebold_register_absentee.html

#20yrsago Air travel “security” as theater of the absurd https://web.archive.org/web/20040130200202/https://idlewords.com/2004/01/security_as_theater.htm

#20yrsago GOP electronically burgled Dems’ computers https://arstechnica.com/uncategorized/2004/01/3327-2/

#20yrsago Milne heirs don’t own Pooh https://web.archive.org/web/20040211100427/http://www.scifi.com/scifiwire/art-main.html?2004-01/22/11.45.film

#20yrsago DVD cartel backs off, EFF wins, DVD keys aren’t “secret” https://www.eff.org/cases/dvdcca-v-bunner-and-dvdcca-v-pavlovich

#20yrsago RIP, Whole Earth Review https://web.archive.org/web/20040202031838/https://www.worldchanging.com/archives/000338.html

#15yrsago Media helped create the financial meltdown https://web.archive.org/web/20090125204013/http://tpmcafe.talkingpointsmemo.com/2009/01/23/the_medias_role_in_the_financial_crisis/

#15yrsago Monty Python’s free web video increased DVD sales by 23,000 percent https://mashable.com/archive/youtube-boost-sales

#15yrsago National Film Board of Canada puts its archives online, free https://www.nfb.ca/explore-all-films/

#10yrsago Animal Planet’s “nature” shows: whistleblowers detail crimes, animal cruelty, fakery https://www.motherjones.com/environment/2014/01/animal-abuse-drugs-call-of-the-wildman-animal-planet/

#10yrsago Teach your rooted Android phones to lie to apps about whether it’s rooted https://lifehacker.com/rootcloak-hides-root-access-from-specific-applications-1505596942

#10yrsago Eyes on the Prize, famed civil rights documentary series, is back on DVD and Youtube https://www.pbs.org/wgbh/americanexperience/films/eyesontheprize/

#10yrsago One Soul: 18 interwoven lives in a graphic novel that pushes the boundaries https://memex.craphound.com/2014/01/22/one-soul-18-interwoven-lives-in-a-graphic-novel-that-pushes-the-boundaries/

#10yrsago Ukraine government sends text to protesters: “Dear subscriber, you are registered as a participant in a mass disturbance” https://memex.craphound.com/2014/01/23/ukraine-government-sends-text-to-protesters-dear-subscriber-you-are-registered-as-a-participant-in-a-mass-disturbance/

#10yrsago What Makes Jo Walton So Great https://www.tor.com/2014/01/21/what-makes-jo-walton-so-great/

#5yrsago After Net Neutrality repeal, Comcast, Charter and Verizon cut investment in their networks https://arstechnica.com/information-technology/2019/01/sorry-ajit-comcast-lowered-cable-investment-despite-net-neutrality-repeal/

#5yrsago Data-broker implicated in bounty-hunters’ access to mobile location data lobbied FCC to fight consent for sharing location data https://www.vice.com/en/article/vbwgw8/zumigo-phone-location-data-sold-lobbied-fcc-consent

#5yrsago Limits to trickle-down: Trump’s tax-cut “boom” fizzles https://www.cnn.com/2019/01/23/business/investment-boom-tax-cuts-economy/index.html

#5yrsago Corporate America projects giant profits from climate disasters https://www.bloomberg.com/news/articles/2019-01-22/muggy-disney-parks-downed-at-t-towers-firms-tally-climate-risk

#5yrsago After six days, LA teachers settle their strike, wringing huge concessions out of the school district https://jacobin.com/2019/01/la-teachers-strike-contract-arlene-inouye/

#5yrsago Winners Take All: the Davos Edition (how elites launder looting with phoney philanthropy) https://www.theguardian.com/news/2019/jan/22/the-new-elites-phoney-crusade-to-save-the-world-without-changing-anything

#5yrsago How a political outsider’s fundraising tool is helping insurgent, working-class Dems mount primary challenges and campaigns https://theintercept.com/2019/01/23/grassroots-analytics-campaign-donations/

#5yrsago Senator Mark Warner’s Stop STUPIDITY Act would protect federal employees’ pay during shutdowns https://www.scribd.com/document/398006535/Stop-the-Shutdowns-Transferring-Unnecessary-Pain-and-Inflicting-Damage-In-The-Coming-Years-Act

#5yrsago Republican Arizona lawmaker revives doomed “porn tax” to fund Trump’s doomed border-wall https://www.vice.com/en/article/gyapwj/arizona-porn-blocking-bill-trump-border-wall

#5yrsago An annotated bibliography of anarchism in science fiction https://www.anarchysf.com

#5yrsago The sad history of Livejournal as a lens for understanding the state of social media today https://arstechnica.com/gadgets/2019/01/the-linux-of-social-media-how-livejournal-pioneered-then-lost-web-blogging/

#5yrsago Teen Vogue explainer: what are “resistance, rebellion, and revolution?” https://www.teenvogue.com/story/resistance-rebellion-revolution-explainer-interviews

#5yrsago English and Welsh Ramblers have seven years left to catalogue the nation’s footpaths, or they will be absorbed into private lands https://www.newyorker.com/news/letter-from-the-uk/the-search-for-englands-forgotten-footpaths

#5yrsago A list of all the booze in Casablanca (surprisingly long!) https://www.wired.com/beyond-the-beyond/2019/01/booze-gin-joints-crazy-world/

#1yrago Walking the Plank https://pluralistic.net/2023/01/22/walking-the-plank/

#1yrago Eggflation is just more price-gouging https://pluralistic.net/2023/01/23/cant-make-an-omelet/#keep-calm-and-crack-on

Colophon (permalink)

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Books & Books (Coral Gables, Florida), Jan 22
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The Bezzle at Third Place Books (Seattle), Feb 26
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"The Lost Cause:" a solarpunk novel of hope in the climate emergency, Tor Books (US), Head of Zeus (UK), November 2023 (http://lost-cause.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3007/Pre-Order_Signed_Copies%3A_The_Lost_Cause_HB.html#/)
"The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).
"Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.
"Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
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Upcoming books:

The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books, February 2024
Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025
Unauthorized Bread: a graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025

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