.jpg)
In a recent analysis, Bruce Gilley discusses the ongoing erosion of American capitalism, highlighting the recent bankruptcy filing of Spirit Airlines in November 2024 as a case study. Gilley attributes the airline's financial struggles not to mismanagement but to a predatory economic environment shaped by excessive government intervention and regulatory burdens [80aef95b]. Spirit Airlines, which has reported losses exceeding $2.2 billion since early 2020, filed for Chapter 11 bankruptcy protection after a failed merger with JetBlue was blocked by the government [395500b8]. This merger was seen as a potential solution to the airline's financial woes, which have been compounded by pilot strikes in 2010 and 2017 and a significant drop in average fares [395500b8][80aef95b].
Gilley points out that Spirit Airlines paid 22% of its net income in taxes from 2014 to 2019, illustrating the heavy tax burden faced by companies in the current economic climate [80aef95b]. Furthermore, during the COVID-19 pandemic, the airline received government aid, which has become a common theme across various sectors as the government plays a significant role in the economy [80aef95b].
The analysis also touches on broader economic issues, such as the Federal Trade Commission's recent decision to block the Kroger and Albertsons merger, citing concerns over market share, and the Justice Department's proposal to break up Google due to its monopolistic practices [80aef95b]. Gilley argues that these regulatory actions create compliance burdens that hinder competition and innovation, ultimately undermining the principles of capitalism [80aef95b].
Moreover, the influence of unions and government-backed loans is highlighted, with 81% of residential home loans being government-backed in 2023 and government health plans accounting for 53% of health spending in 2022 [80aef95b]. Gilley emphasizes that such interventions distort the market and create an environment where capitalism struggles to thrive, as seen in the case of Spirit Airlines and other sectors of the economy [80aef95b].
In conclusion, Gilley’s critique of American capitalism underscores the need for a reevaluation of government policies and their impact on the economy, suggesting that the current trajectory may lead to further erosion of capitalist principles if left unaddressed [80aef95b].