Show Notes
Whether it is interfering with airline mergers, off-shoring a state’s oil refineries to Asia, or placing bets on chip makers, the nine scariest words in English are, in President Ronald Reagan’s immortal phrase, “I’m from the government, and I’m here to help.”
The fall of Spirit Airlines “is the classic Democratic problem,” says author and investigative journalist Peter Schweizer. “They don’t understand the implications of their decisions, the costs and repercussions that affect real people’s lives.”
On the most recent episode of The Drill Down podcast, Schweizer and co-host Eric Eggers tie a neat bow around Spirit Airlines, California oil refineries, and chip-maker Intel Corp.
With the collapse of Spirit Airlines last week, after two bankruptcies, some Democrats in Congress have blamed spiking fuel prices caused by the war in Iran for pounding the final nail into Spirit’s coffin. Republicans and financial experts, however, recall that those same people prevented the planned merger of Spirit with Jet Blue Airlines in 2023, which offered an infusion of cash and a chance for the airline to be run by a better-placed new team.
Sen. Elizabeth Warren loudly opposed that merger and wrote then Transportation Secretary Pete Buttigieg urging the Biden administration to prevent it. When they did, she trumpeted a “Biden win for flyers,” arguing the merger would have raised ticket prices by the budget carrier.
“They don’t even know people who flew on Spirit,” Schweizer says.
“They created those conditions, and this has now created a lot of frustration, because you’re going to have prices go up. One less lower-cost airline out there offering these services,” Schweizer says. “People are already concerned about the cost of living. And there are politicians trying to spring and take advantage of this situation.”
Spirit Airlines was based in Florida, and its collapse put 17,000 people across the country out of work. Florida gubernatorial candidate James Fishback called for “the Florida state government to buy the Spirit Airlines Headquarters to turn it into a public high school and name it after Spirit and their employees.”
“Spirit Airlines High School could even be fed by ‘Dollar Tree Middle School,’ and by the ‘Temu Tigers,’” co-host Eric Eggers quips.
Meanwhile in California, fuel prices are the highest in the nation at an average of more than $6 a gallon, higher even than Hawaii. Again, government involvement in the oil and gas industry makes that situation so bad The state has the nation’s highest gas taxes, and has actively worked to eliminate oil and gas refineries from operating in California, on environmental grounds, so the gas sold in the Golden State is all refined and, at added cost, imported back from Asian countries and from India.
That act “is a classic move that they make, which is done in the name of the environment,” Schweizer says. “We’re going to have it done in a poor Third World country that has very loose environmental regulations. It’s going to have ordinary people in California pay much higher prices because we’ve got to take the oil, take it to India, get it refined and then bring it to California for a second trip.”
The state’s Attorney General, Democrat Rob Bonta, is actively fighting plans to build domestic pipelines into California to alleviate that. And the attorney general of California is preventing these pipelines from being approved. “You continue to see that these refineries are leaving the state of California” because of state government opposition, he added.
Democrats are not the only ones that use government to pick winners and losers in the marketplace. The Trump administration made a $7 billion investment in Intel with funds from the CHIPS Act, arguing that the silicon chips the company produces are a national security matter. That the investment is now worth about $35 billion is not really the point, Schweizer argues.
“It sets the predicate that a future administration can say, ‘we had this great experience with Intel. Now we’re going to do this other deal that happens to involve my friend or involve this industry that gave me a lot of money, or involve a state that is a big political supporter for me,’ and they’re going to take our taxpayer money and they’re going to fritter it away,” Schweizer says.
“They will come to all the wrong conclusions,” he adds.
