<v SPEAKER_01>This is why I'm so in on my tinfoil hat, because I think that a lot of people are genuinely confused as to like what this debate is about.

<v SPEAKER_02>Yeah.

<v SPEAKER_01>Because if the American Economic Liberties Project was called the Technocratic Regulators Can Improve on Market Outcomes Institute, then nobody would be confused.

<v SPEAKER_01>It's a debate about what it means to be a center-left political party, should be to be like a capitalism and welfare state party, or it should be a central planning party.

<v SPEAKER_00>Hi, my name's Jerusalem Demsis.

<v SPEAKER_01>I'm Matthew Iglesias.

<v SPEAKER_00>And welcome to The Argument.

<v SPEAKER_00>It's a show where two friends argue about politics, policy, and whatever else we're interested in that week.

<v SPEAKER_00>This week, uh Matt and I are going to talk about Spirit Airlines.

<v SPEAKER_01>Yes, Spirit Air.

<v SPEAKER_01>Not great.

<v SPEAKER_01>Um it's bankrupt.

<v SPEAKER_01>Uh this is interesting.

<v SPEAKER_01>I mean, I think we want to talk about what actually happened with this airline.

<v SPEAKER_01>But also, I think that some of the political arguments about this are like a skeleton key for understanding like really big ideological divides in America in a way that people don't totally understand.

<v SPEAKER_00>Yeah.

<v SPEAKER_01>But first, we had an airline.

<v SPEAKER_00>It no longer exists.

<v SPEAKER_00>It's bankrupt.

<v SPEAKER_01>It's gone.

<v SPEAKER_01>Um, so Spirit, for I don't know if those don't know, um, it was what we call an ultra-low-cost carrier.

<v SPEAKER_01>It's a cheap airline.

<v SPEAKER_01>ULCC is focused uh mostly on like price-sensitive leisure travelers, tourists, things like that.

<v SPEAKER_01>They do point-to-point service.

<v SPEAKER_01>Um, Spirit is one of the older ones uh in the United States.

<v SPEAKER_01>Um, so you know, it's its elimination is sort of significant.

<v SPEAKER_00>Yeah, and like the proximate cause of this is obviously the Iran War.

<v SPEAKER_00>Um like the Strait of Hormuz has uh been closed for like what, like six weeks now?

<v SPEAKER_00>How long has it been?

<v SPEAKER_01>It's been a while since I since I last took a super tanker through it.

<v SPEAKER_00>No, it's 10 weeks, actually.

<v SPEAKER_00>And like, and then uh you know the 20 percent of the world's oil flows through the Strait of Hormuz.

<v SPEAKER_00>Obviously, it's gonna raise jet fuel costs.

<v SPEAKER_00>Jet fuel is like 20% of the cost of airline's largest expense after after labor.

<v SPEAKER_00>And you know, the cost of jet fuel is roughly doubled at this point.

<v SPEAKER_00>So it seems bad.

<v SPEAKER_00>That's what they're citing in their in their bankruptcy documents.

<v SPEAKER_01>Right.

<v SPEAKER_01>I mean, to back it up, uh, so spirit had been going on for a while.

<v SPEAKER_01>Its business model um had been ailing for a while.

<v SPEAKER_01>Uh jet blue, which is a different airline, tried to buy them uh when Joe Biden was president.

<v SPEAKER_01>Uh the Justice Department um argued that this would be uh an antitrust problem.

<v SPEAKER_01>They got a federal judge to agree, the acquisition was blocked.

<v SPEAKER_01>Spirit then went bankrupt pretty soon after.

<v SPEAKER_01>Uh they did what's there's like multiple kinds of bankruptcy.

<v SPEAKER_01>There's like two main ones for companies, Chapter 11 and Chapter 7.

<v SPEAKER_01>And at Chapter 11 bankruptcy, you like uh shrug off your old debts, you can rewrite uh leases as important for airlines.

<v SPEAKER_01>Um, you can like uh screw over your workers on things you'd promise to pay them.

<v SPEAKER_01>Um airlines are filing for chapter 11 bankruptcy like all the time, uh, because it's one of the only ways they can reduce their cost structure.

<v SPEAKER_01>So Spirit did a chapter 11, they emerged from chapter 11, they then did another chapter 11, they emerged from that, and then jet fuel prices spiked.

<v SPEAKER_00>So there's like a huge debate happening right now about like what actually is the cause of Spirit's bankruptcy, which is like what we're kind of getting into here.

<v SPEAKER_00>Like Spirit, as I said, is like nominally citing, and it is like the last knife was definitely the jet fuel prices.

<v SPEAKER_00>Like it was, they were like very exposed to this.

<v SPEAKER_00>They were already in a bad position, but this was like, I don't know, like the final, the nail in the coffin.

<v SPEAKER_00>But like now there's like all this discourse.

<v SPEAKER_00>Like I was just listening to like a podcast on The Blaze this morning.

<v SPEAKER_00>Um comedian, or I guess like, I don't know, it's like a comedy podcast, but they were uh um, you know, on the right, and they were basically entirely attributing this demise of spirit to the f um DOJ suit to prevent Spirit from merging with Jet Blue under the Biden administration.

<v SPEAKER_00>And like the like argument that's like really burgeoning, both on the right, like you know, Sean Duffy, transportation secretary for the Trump administration, is really saying this, but also, you know, lots of people are saying this online and um and um you know, elected officials are are arguing this too, that the um Biden administration like made an anti-capitalist, like anti-market, like anti-competitive decision um to allow for Spirit Airlines to or to prevent Spirit Airlines from being able to um merge with JetBlue.

<v SPEAKER_00>And like there's kind of like this like, well, look, look what happened.

<v SPEAKER_00>So like you didn't let them merge, but now it doesn't even exist.

<v SPEAKER_00>So the benefits that you were supposed to get of Spirit Airlines continuing and continuing to be this like pressure to prevent price increases like no longer exists.

<v SPEAKER_00>Right.

<v SPEAKER_01>Well, so I I that second argument I think makes a lot more sense than the first, right?

<v SPEAKER_01>But what they're literally saying, like I saw, you know, there was uh an AI cartoon, and it's like Joe Biden and Elizabeth Warren are like the pall bearers at the Spirit Airlines funeral.

<v SPEAKER_01>There's just two of them.

<v SPEAKER_01>And they're jumping around.

<v SPEAKER_01>I think I'm strong.

<v SPEAKER_01>Um Yeah, this is they're strong guys.

<v SPEAKER_01>Um so in a literal sense, clearly, it's the increase in jet fuel, is why Spirit is liquidating.

<v SPEAKER_01>Like that's the difference between today and two months ago.

<v SPEAKER_01>In a counterfactual sense, I mean it seems likely, actually, that if the purchase had gone through, right, jet blue has been losing money since this time anyway.

<v SPEAKER_01>Spirit is also losing money.

<v SPEAKER_01>If they had merged, jetblue would have taken on Spirit's debts, and it also would have incurred costs because when you buy an airline, you know, you need to repaint all the planes, so on and so forth.

<v SPEAKER_01>Um, they would have made this purchase not knowing that Trump was going to start a war with Iran that was gonna spike the price of jet fuel.

<v SPEAKER_01>And so the combined entity would almost certainly be bankrupt now.

<v SPEAKER_00>Yeah, I mean, I'm not- I'm like that's like a very plausible argument people are making.

<v SPEAKER_00>Like, I do not feel like I have the the necessary business expertise to know if that's true or not.

<v SPEAKER_00>But I do think that it's one thing that's relevant is that Spirit also made, I mean, a bunch of interesting business decisions.

<v SPEAKER_00>So after it wasn't, and you know, the JetBlue merger was also like super controversial at the time.

<v SPEAKER_00>Like even, you know, um within Spirit, there were like concerns that JetBlue's merger was just definitely not going to be allowed and that they should just not, the shareholders should not accept the the merger.

<v SPEAKER_00>But they, you know, they were they were drawn in by the the massive potential payout that they were gonna get an exit for for for for accepting that.

<v SPEAKER_00>But I think that like, you know, the point was that after the uh merger was blocked by, you know, a Reagan-era judge, um, Spirit like decided to try to not just be a budget airline anymore.

<v SPEAKER_00>They were like, okay, we need to like now expand our premium offerings.

<v SPEAKER_00>Um, I forgot what they're called, like the big front seats or whatever, like some kind of like premium offerings they started doing and they started like really trying to break up the main carrier.

<v SPEAKER_00>And like obviously, like anyone who's ridden Spirit, I don't think Matt or I have ever had the have ever had the privilege.

<v SPEAKER_00>I guess we'll never have the privilege at this point, um, knows like the the whole point is it's like really ultra-look, like it's not meant to have any kind of like premium offerings.

<v SPEAKER_00>And like it becomes it creates like this weird dynamic though in the arguments from the like DOJ that were like, okay, we want to keep Spirit around because they're this ultra low cost carrier, but then like they block the merger with Jet Blue, and then you get a situation where like Spirit thinks it's only like pathway out of this is to no longer be just an ultra low-cost carrier.

<v SPEAKER_00>So even if like the war with Iran doesn't happen um and jet fuel fuel prices don't spike, it seems unclear to me whether Spirit would have remained as like this very low-cost carrier into the long term.

<v SPEAKER_00>That doesn't seem like the strategy they were going for.

<v SPEAKER_01>Well, and this is I I think the the correct critique of the Biden administration policy is not that they caused Spirit to go bankrupt, but that Spirit's bankruptcy, not just the chapter seven liquidation that's happening now, but the two prior chapter 11s.

<v SPEAKER_01>It just like it calls into question what they were trying to accomplish here.

<v SPEAKER_01>Because like Spirit was a failing business, right?

<v SPEAKER_01>But it had assets, it had airplanes, it had slots and gates primarily in Florida.

<v SPEAKER_01>JetBlue was interested in buying that stuff.

<v SPEAKER_01>The the argument that was made to block the merger was no, no, no, we need this independent, cheap airline with lots of flights in and out of Florida rather than consolidation.

<v SPEAKER_01>But Spirit was losing money.

<v SPEAKER_02>Yeah.

<v SPEAKER_01>And so the alternative to them being purchased by JetBlue was to be purchased by somebody else who would also want that stuff, or for them to change their business model to be more comparable to these higher-priced airlines, or what ultimately happened, which is that the airline's just going to be dissolved and the planes and the gates will be auctioned off.

<v SPEAKER_01>And, you know, so somebody else will buy them.

<v SPEAKER_01>Probably in the end, JetBlue is going to get a lot of what it wanted out of this, like the material objects at a lower price because they're not going to need to pay, you know, a control premium.

<v SPEAKER_01>So, you know, in in some sense, right, like some of the brainiacs who are involved in this are like, well, so we were, we were correct to block it because this whole merger was like a bad business idea, which I sympathize with.

<v SPEAKER_01>Like a lot of times I think it's underrated that like a lot of times CEOs want to do mergers simply because it's like cooler and more fun to be the CEO of a bigger company rather than a smaller one.

<v SPEAKER_01>And it doesn't really make business sense.

<v SPEAKER_01>And it's not like an evil monopoly plot.

<v SPEAKER_01>It's just a just a bad idea.

<v SPEAKER_01>Like when ATT bought um Warner Brothers uh years and years ago, and it's like they had this story that they were telling their shareholders, but at the end of the day, being the CEO of like a cell phone infrastructure company is kind of boring.

<v SPEAKER_01>And being the CEO of a movie studio, it like is awesome.

<v SPEAKER_01>You get to hang out with movie stars, you go to the Oscars.

<v SPEAKER_01>They just lost all this money and it was unwound ultimately.

<v SPEAKER_01>So I feel bottom line, like the specific allegations being leveled at the Biden people about this are not literally true.

<v SPEAKER_01>But also, it's really hard to say that like this was an example of this amazing new era of antitrust policy that was supposed to give us all these benefits.

<v SPEAKER_01>Like all that happened is the failing airline that wanted to sell itself to jet blue is now failed and will be sold off for parts.

<v SPEAKER_01>Some of the parts will be bought by jet blue, some by, I guess, like Breeze.

<v SPEAKER_01>I mean, there's a bunch of airlines out there.

<v SPEAKER_00>I also think that's like um, you know, when I was looking to this, like it just is clear that there was also some very bad luck that Spirit Airlines like was facing.

<v SPEAKER_00>I mean, I don't actually know what this is, but there's this uh there's a type of jet engine called a geared turbofan engine.

<v SPEAKER_00>Sure.

<v SPEAKER_00>And Pratt and Whitney are the manufacturers of this product, and they had to do a recall.

<v SPEAKER_00>Um and Spirit Airlines was like the single most exposed airline for this recall.

<v SPEAKER_00>And so like they were able to, they had like Pratt and Whitney had to like pay, I think it was like$130 million, something like that, a year or something like that, um, in order to um compensate Spirit Airlines, but it's like that doesn't actually like fix the problem.

<v SPEAKER_00>Like you're not able to sell people, well, I I mean this is one of the you know, airlines are a tough business, right?

<v SPEAKER_01>So like the mainline carriers fly these very complicated fleets with lots and lots of different types of planes on it.

<v SPEAKER_01>And typically a low-cost carrier will only get one kind of plane, right?

<v SPEAKER_01>And so there's a lot of cost savings for that because you can, you don't need as many spare parts on hand, you know, because it can come in.

<v SPEAKER_01>Your pilots only need to train for one thing, but you are left more vulnerable to something going wrong because you only have one supplier, right?

<v SPEAKER_01>So airlines is a difficult business.

<v SPEAKER_01>Um airlines, a lot of airlines have gone bankrupt over the years.

<v SPEAKER_01>Um, and you know, Spirit had a nice, like long run as a business that helped um maybe cause some other airlines to have financial difficulties over the years.

<v SPEAKER_01>And that's like kind of what competition is supposed to be.

<v SPEAKER_00>Yeah.

<v SPEAKER_00>And I mean, I was like uh a kid before uh this period, but the 2010s is like right now, it's really normal when you go online and you're like, let me go buy like a flight, right?

<v SPEAKER_00>And you're like, oh, I there's like a there's all these different tiers.

<v SPEAKER_00>I don't remember all the names.

<v SPEAKER_00>Like there's like basic economy, there's like super basic economy, there's like loser basic economy, and then there's like premium loser basic, and like there's all these different ways, and there's you can once you've actually bought your like premium loser basic economy ticket, then you can like decide if you want to spend another$35 on like a seat with more leg room, and then they can also spend another like$15 if you want to like board early and you don't actually have like loyalty points with that airline.

<v SPEAKER_00>And then on top of that, if you want to maybe on some airlines, if you want to bring more than just one checked bag, you have to pay anyway.

<v SPEAKER_00>There are all of these like there's been a bunch of unbundling that's happened in the airline space, and not just on like the spirit and the frontier, but like also on the legacy airlines and on the airlines that are supposed to be like these premium products.

<v SPEAKER_01>Um but it was the spirits of the world that did introduce.

<v SPEAKER_01>Exactly.

<v SPEAKER_00>And that's it.

<v SPEAKER_00>I was like too young to remember the time before this, but like this is like in the 2010s, really, and spirit is older than this, but this is when spirit really starts, and also Allegiant and Frontier really start actually pioneering this new business model.

<v SPEAKER_00>And it's funny, the Deldo president at the time, like when when all this was happening and they had to um, you know, compete with Spirit and Allegiant and all these kind of ultra-low cost carriers, the president was basically just like we're calling it a spirit match fair, like said specifically that basic economy is not something we want to grow, as we've outlined before.

<v SPEAKER_00>It's a defensive product against the ultra-low-cost carriers.

<v SPEAKER_00>Like it's like really, really explicit that the actual effect of all of these airlines, these ultra-low-cost airlines, was like to genuinely produce lower prices for consumers.

<v SPEAKER_00>And it's difficult to tease out because when we think about Delta or United or JetBlue or any of these other airlines lowering their prices in response, and therefore Spirit can no longer compete, and therefore Spirit like has to go out of business.

<v SPEAKER_00>It's like, is that like a win for it?

<v SPEAKER_00>Sounds like a win for consumers, but then like obviously there's this question of like when Spirit goes away, what's going to happen?

<v SPEAKER_00>And I think that's like a big part of um.

<v SPEAKER_01>Well, and there's also, I mean, I mean, some of what I you know drives discourse around this is that ultra-low-cost carriers came into the market.

<v SPEAKER_01>They offered people cheaper airfares, uh, but they did also offer like a worse product.

<v SPEAKER_01>Right.

<v SPEAKER_01>Like what the innovation was.

<v SPEAKER_00>Typically cheaper things are worse.

<v SPEAKER_00>Right.

<v SPEAKER_01>Well, I mean, it's just it turns out that for not everybody, but like most people, most of the time, what they basically want is to get to their destination as cheaply as possible.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>Right.

<v SPEAKER_01>And so there's been this long-term trend toward creating lower airfares in part by like decontenting the product.

<v SPEAKER_01>And so you'll sometimes see these like nostalgia posts, and they'll show you what an airplane was like in the store.

<v SPEAKER_00>Oh my god, we should put that up on the screen.

<v SPEAKER_00>It's like men and women in like the 1960s garb, and they're like lounging in these like like large chairs, and there's like alcohol being served on this like giant platter and like a roast turkey or whatever.

<v SPEAKER_01>And the thing is, is that those fares cost roughly what a business class fair would cost today, right?

<v SPEAKER_01>In a country that was poorer.

<v SPEAKER_01>So you just used to have a situation where many fewer people fly.

<v SPEAKER_01>Airfares were much higher, they were particularly much higher relative to incomes, but the experience was really, really nice.

<v SPEAKER_01>That has now been reinvented as the premium cabin in a mainline airline.

<v SPEAKER_01>And then first the ULCCs came in and they invented this like cheap-mode of flying.

<v SPEAKER_01>And then the mainline carriers started responding so that now, you know, you can get like economy, which is like kind of crappy, but then like basic economy, you give up even more and it's cheaper, cheaper, cheaper.

<v SPEAKER_01>And so, you know, the standard neoliberal quote unquote thing to say about this is that like that this is way more people get to fly now.

<v SPEAKER_00>I just think it's like it's one thing that's like the top, I don't even, I we should have looked this up number, but like a very small slice of American society was like flying commercial in like the 1960s and 70s.

<v SPEAKER_00>Like this was just like the normal flight was like a normal flight for a very rich person.

<v SPEAKER_00>I find this is very analogous to like the college debate sometimes, like the composition of people who like are attending college today who are considered college educators, just like a completely different composition of people.

<v SPEAKER_00>Like way more people get to be a part of this.

<v SPEAKER_00>And so that drives a lot of like weird confusion when you know you see the like you know, this picture of like the 1960s, and people are like, well, why is it so much worse now?

<v SPEAKER_00>It's like, no, like the thing you should be comparing it to was like driving across the country.

<v SPEAKER_00>Like you were not, you didn't have a flight option because you could not afford to fly.

<v SPEAKER_01>But it depends, because like one aspect of this that I do think is relevant is that um when I was a kid in the in the 80s, and that was the early days of this, you know, transformation of the industry.

<v SPEAKER_01>My mother worked at Newsweek.

<v SPEAKER_01>Um, she was mostly a graphic designer, photography person, um, rather than a um, you know, a writer.

<v SPEAKER_01>But uh Newsweek journalists like journalists today traveled for work, you know, fairly frequently.

<v SPEAKER_01>And journalists then, like today, were not treated to like the super premium fares on these things.

<v SPEAKER_01>They had to book regular economy class tickets.

<v SPEAKER_01>But because the worst ticket that you could buy in the 70s and 80s, which is like way better than an economy fair today, like things have gotten way worse for people like that, right?

<v SPEAKER_01>If you travel a lot for work, which means you're probably, you know, in the upper strata of American society, yeah, but you're not in the like real upper strata of American society.

<v SPEAKER_01>You are now kind of like saddled with this product that has been developed to optimize for the needs of the majority of people who fly infrequently.

<v SPEAKER_01>And when they fly, it's to visit family or to go on vacation.

<v SPEAKER_01>And for them, it's like the upside is that an airplane is much faster than a car.

<v SPEAKER_01>And so you can get where you're going and you can do it affordably.

<v SPEAKER_01>And now all kinds of people fly, at least sometimes, you know, like just for fun and it's cheap.

<v SPEAKER_01>And in in Europe, you know, where people are poorer on average, but also have more vacation days on average, and also um, I don't know, this is like more interesting places to go.

<v SPEAKER_01>Um, the the the ULCC segment is huge on like Ryanair, Jet2go, um, uh EasyJet, things like that.

<v SPEAKER_01>Because you have lots of people who just would really like to, you know, get to Budapest or Warsaw, whatever it is for a long weekend, you know, as cheaply as possible.

<v SPEAKER_01>And it's like it's crappy planes.

<v SPEAKER_01>Uh, but you get there.

<v SPEAKER_01>In America, the market's structurally different.

<v SPEAKER_01>The mainline airlines invented basic economy to defend.

<v SPEAKER_00>And you know, it just sets up like a bunch of interesting like trade-offs too, because it's like at some level, obviously, whether it's these uh, you know, upper middle class people who are now by having to buy like basic economy because they're trying to be cost-cutting, like people like often have like very little loyalty to like the airline.

<v SPEAKER_00>When they go on like Google flights or whatever it is that they do, like they just pick like the cheapest thing often.

<v SPEAKER_00>Sometimes they'll discriminate on like non-nonstop or something like that.

<v SPEAKER_00>But like largely they're just like, I want the cheapest flight possible.

<v SPEAKER_00>I don't really care if it's you know, I don't really care if it's Delta, like some small of the population cares a lot because I care so much.

<v SPEAKER_01>So I I'm clinging to my Starline silver status for dear life.

<v SPEAKER_00>But like I don't like have I don't I don't really care about that sort of thing.

<v SPEAKER_00>I think I like like many Americans, I just sort of like and maybe I'm I'm like loonly, I know I'm leaving money on the table, but it's just like one of those things where I just, you know, you just go for the cheapest thing.

<v SPEAKER_00>Um yeah, I'm a woman of the people, Matthew, unlike you.

<v SPEAKER_00>I think the thing that's important about that is that there's there's almost like a I want it to be much cheaper than it's ever been, more so than like the technological progress or the increased competition would would, or you know, if you're just looking at the marginal cost of these airlines, like that would justify.

<v SPEAKER_00>And also I want it to be this like very luxury product that's available for everyone.

<v SPEAKER_00>And it's like, I also think that's that would be great.

<v SPEAKER_00>Like it would be a good situation if like we got like higher quality airline tickets and like uh or airline experiences and things were very, very cheap, and like hopefully with like more technological progress, like more competition, like you can actually get access to those sorts of things.

<v SPEAKER_00>But there's like this almost like weird dynamic where people both are like really mad at how expensive air travel is.

<v SPEAKER_00>That's like their primary focus.

<v SPEAKER_00>But so much of like the policy discourse is like focused on this like, is it really annoying that there are all these fees?

<v SPEAKER_00>And isn't it really annoying that like, you know, there was this proposal from I forget what it was, but it was like some airline in Europe to like have like a short-standing flight.

<v SPEAKER_00>And it was like really treated as like this horrible thing that companies are doing to you.

<v SPEAKER_00>And the CEO was just like, I just think it's like you can get more people on, it's a cheaper flight for everyone, and you can opt into a higher quality thing if you want to.

<v SPEAKER_00>And so it just becomes this like question of like whether you view companies as largely entities that are trying to like make a profit and like in like any way possible, or if you think that they're like actively just exploitative entities, like regardless of uh what's going on.

<v SPEAKER_00>But we're talking about all this.

<v SPEAKER_01>Can I do my bit now?

<v SPEAKER_01>You can.

<v SPEAKER_01>You know, we gotta go, because I gotta put on my tinfoil hat here and talk about what we're really talking about here.

<v SPEAKER_00>This is like did you how much work you didn't put any work into this hat?

<v SPEAKER_00>This is not even a hat.

<v SPEAKER_01>I'm not a crafty person, but I need to, I'm getting parano- No!

<v SPEAKER_00>Here's the thing How long are you gonna keep that on?

<v SPEAKER_00>Just the whole podcast?

<v SPEAKER_01>We'll see what happens.

<v SPEAKER_01>Okay, for a long time now, there has been factional controversy inside the Democratic Party.

<v SPEAKER_01>And one side in this controversy likes to label itself anti monopoly, or they will sometimes talk a lot about antitrust policy.

<v SPEAKER_01>And Lena Khan is probably the most prominent figure in this sort of movement, uh, but they have uh Um multiple policy organizations, uh, Open Markets Institute, American Economic Liberties Project, um they've uh seems to uh dominate the Washington Monthly's journalism and have influence over uh the American Prospect, the New Republic.

<v SPEAKER_01>And these people would like you to think that they are really interested in competition, and that like that's the point of all of this.

<v SPEAKER_01>But you see their commentary specifically on the airline industry, which is not the most important industry in the world.

<v SPEAKER_01>But their beef with the airline industry is that there is too much competition.

<v SPEAKER_01>There was a big deregulation of the airline industry that took place in Jimmy Carter's administration that unfolded into the early 1980s and that has unleashed this series of changes where flights got cheaper, the low-end tickets got worse, there have been many airline bankruptcies, there have been a lot of chapter 11 processes in particular that have not been great for the workforce at the labor unions, uh at the airlines.

<v SPEAKER_01>And, you know, sometimes an airline liquidates, goes out of business.

<v SPEAKER_01>There was a there was a uh a guy named Donald Trump ran a uh airline called Trump Shuttle when I was a kid, would take you from DC to New York.

<v SPEAKER_01>It's not in business anymore.

<v SPEAKER_01>Uh, I don't I don't know what happened to that guy.

<v SPEAKER_01>Um, and it's this very different world.

<v SPEAKER_01>And Khan herself, you know, she before the Amazon antitrust paradox piece, she had this piece with Phil Longman called Terminal Sickness that said airline deregulation was a mistake.

<v SPEAKER_01>And they're like blaming all kinds of things on this, right?

<v SPEAKER_01>Ganesh Sidaraman has a book out uh fairly recently about how airline deregulation was a mistake.

<v SPEAKER_01>He's one of the big movers and shakers behind the underbility policy accelerator.

<v SPEAKER_01>He's like old friends and was a key advisor uh to Secretary Mayor Pete uh at the Department of Transportation.

<v SPEAKER_01>Uh Pete, when he was there at DOT, brought uh one of these people over from FTC to do competition policy there.

<v SPEAKER_01>And um it's just like a huge, it's not the most important thing in the world, but like it's a huge tell that the vision that they actually have for the American economy is not that we're gonna use antitrust enforcement to make markets be competitive.

<v SPEAKER_01>It's that we're gonna use the idea that real-world markets don't exhibit like total textbook frictionless competition as a pretext to impose pre-Carter regulatory frameworks on everything.

<v SPEAKER_00>Okay, let's just back up for a second.

<v SPEAKER_00>Because so this is obviously a bit of a different episode than we uh hats coming off.

<v SPEAKER_01>Taking off the hat.

<v SPEAKER_00>Taking off the hat.

<v SPEAKER_01>Getting normal.

<v SPEAKER_00>Uh it was hard to take you seriously, I'm gonna be honest with you.

<v SPEAKER_00>I was not fully grokking even what you were saying as a result of that.

<v SPEAKER_00>So teapot uh tinpot hat wearers out there would really uh reflect on your choices.

<v SPEAKER_00>Um, I want to take a step back because like usually we have an episode where Matt and I like are like beefing over something in specific.

<v SPEAKER_00>Um this time Matt has like an argument that like, you know, both of us have like, you know, general thoughts about spirit airlines, but now Matt has like a specific argument about how well he is a meta point about how like this specific episode shows that there's like actually this like shady plot underlying a lot of the rise of anti-monopoly um discourse in the public.

<v SPEAKER_00>And now just to like situate people in this who are not so online, there has been like a rise of a movement, like the Neo Brandesian movement.

<v SPEAKER_00>Um you might have hear a lot about Lena Khan, who was FTC chair under um Joe Biden.

<v SPEAKER_00>But there are lots of people who have been interested in this space.

<v SPEAKER_00>Matt detailed a few of their names.

<v SPEAKER_00>And many of the things they've been, you know, known for are things I think that like we would support, things like, you know, um ending, banning non-competes, um, which I think is actually just neoliberalism.

<v SPEAKER_00>Um, but other things they've been really focused on are around blocking big companies from getting to such a real fear of bigness.

<v SPEAKER_00>Matt Stoller, who's a big person in this space, his newsletter is called big.

<v SPEAKER_00>I mean, again, like they're very, very concerned about like big entities existing.

<v SPEAKER_00>Um Matt Brunig, who writes for our uh, you know, for The Argument magazine, um, he wrote this whole piece about how um this kind of concern with bigness is not really um you know that cogent from his perspective as a socialist.

<v SPEAKER_00>Um but then like that like entire thing kind of feels like very weird in the airline space, which I think is why you think it's like such a skeleton key, right?

<v SPEAKER_00>Because in the airline space, what's actually happening under the you know pre-airline deregulation moment before Carter, before Nader really takes this on, is that like it was a system that like privileged like legacy airlines.

<v SPEAKER_00>It was like literally trying to maintain an oligopoly of airlines that were like closely regulated by something called the CAB, the Civil Aeronautics Board.

<v SPEAKER_00>It's kind of funny because I didn't I didn't actually realize it for a while, but like the entire conception of the Civil Aeronautics Board, the entire exception of like the Roosevelt era um imposition of this sort of like direct um regulation of prices and all these other factors that go into airline um businesses, is that like they were worried about there being like too much competition.

<v SPEAKER_00>There's this theory of like ruinous competition that like you would have all of these uh people entering the airline market, all of these companies entering into it.

<v SPEAKER_00>And in order to compete, they would all like lower their prices too much such they wouldn't be able to sustain a business.

<v SPEAKER_00>That these b these like, you know, these new entrants would drive out like legacy airlines out of business.

<v SPEAKER_00>And the whole theory is around this belief that the actual market for airlines can't function normally.

<v SPEAKER_01>Right.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>You know, the operation of the the old civil aeronautics board is complicated, but like the key thing is that, you know, if I looked and I said, wow, the guys flying planes from DC to Chicago are making a lot of money.

<v SPEAKER_01>I'd like to take one of my planes that's like currently flying around Idaho or something and fly it from DC to Chicago instead.

<v SPEAKER_02>Yeah.

<v SPEAKER_01>I would have to go to the CAB and say, I would like permission to start flying planes from DC to Chicago.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>And then they would do a market analysis that was designed to ascertain whether or not that market was large enough to support a third airline or in many cases a second airline.

<v SPEAKER_01>And, you know, oftentimes the answer would be no, because the purpose of the CAB framework was to prevent the airlines from engaging in price wars that would drive them out of business.

<v SPEAKER_01>And, you know, this was good, obviously, if you were a shareholder in one of those airlines.

<v SPEAKER_01>It was very good if you worked at one of the airlines because it meant that you never had the experience that many more contemporary, you know, airline pilots, flight attendants, and stuff have had of the airline saying, Oh crap, we're going out of business, right?

<v SPEAKER_00>So you had these And to be clear, this is like not like me and I know we had a tinfoil hat earlier, but like this is not just like me and Matt just theorizing this.

<v SPEAKER_00>The Federal Aviation Report of 1935 explicitly argues, quote, to allow half a dozen airlines to eke out a hand-to-mouth existence when there is enough traffic to support one really first-class service and one alone would be a piece of folly.

<v SPEAKER_00>This is like an intentional decision.

<v SPEAKER_00>And like in 1958, 23 of the hundred largest city pair markets were effectively monopolies, another 57 were effectively duopolies, and only two did the largest three carriers have less than 98% share.

<v SPEAKER_00>And like, it's like this was like the like the thing that we're talking about here is like this kind of regulation was not, this is not like pro-competitive in any real sense.

<v SPEAKER_01>No, I mean, it was the opposite, right?

<v SPEAKER_01>And so, you know, if you look, there's a there's a political piece in which um they are profiling uh Secretary Mayor Pete's uh conversion to the anti-monopoly cause.

<v SPEAKER_01>And he says in there, like, well, you know, aviation isn't like a regular industry, you know, there's these high capital costs, significant barriers to entry, um, et cetera.

<v SPEAKER_01>You know, which is true.

<v SPEAKER_01>Um, there are high capital costs, and there's significant barriers to entry, right?

<v SPEAKER_01>Like in the deregulated market, you know, I was saying an airline could like shift its planes from Idaho to Chicago, but like Jerusalem and I, we can't just start an airline, right?

<v SPEAKER_01>Like we have both started uh like websites at different times, and it's it's hard work, yeah, but like nobody's gonna stop you, right?

<v SPEAKER_01>Whereas you can't try for for safety reasons, yeah.

<v SPEAKER_01>You can start up an airline.

<v SPEAKER_01>It's not illegal, but like it's quite challenging.

<v SPEAKER_01>Yeah, right.

<v SPEAKER_01>There's not free entry and exit.

<v SPEAKER_01>So it's true.

<v SPEAKER_01>It's like it's not a perfect textbook marketplace.

<v SPEAKER_01>And so this idea from the 1930s was well, given that competition would work imperfectly, it's like far too dangerous to allow it to work at all.

<v SPEAKER_01>And so you would have in many European countries, they just had state-owned airlines, right?

<v SPEAKER_01>That's why if you um like the names of the airlines are like British Airways, Air France, right?

<v SPEAKER_01>Um because they were they were run by the government.

<v SPEAKER_01>In America, we like believed in capitalism, quote unquote.

<v SPEAKER_01>So these were all private companies, but the government was telling them what they were allowed to do.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>But there was this exception, which is that the Constitution was seen as limiting the CAB's authority to interstate air traffic.

<v SPEAKER_01>Trevor Burrus, Jr.

<v SPEAKER_00>Before we get into this, I think it's really important.

<v SPEAKER_00>I just want to like point out here like, I don't want to fully implicitly buy this idea that airlines or the airline industry is just um like necessarily broken in this specific way.

<v SPEAKER_00>So there's this great paper by Borin Stein and Rose.

<v SPEAKER_00>We'll link it in the show notes.

<v SPEAKER_00>But they want to like show that you don't need any exotic, like quote unquote, like this industry is like structurally broken type ideas in order to explain why it is that like airline profits swing wildly and that they just use like kind of like an ordinary, you know, economic and macroeconomics model.

<v SPEAKER_00>And they find that just the fact of like the volatile demand, the which is like, you know, there are recessions, 9-11 happens, like stuff, stuff occurs, like holiday um uh holidays uh uh shift around, um, uh fuel shocks, et cetera.

<v SPEAKER_00>But then that plus like the sticky costs that you already mentioned, like labor contracts, whatever it is, and fuel shocks, which we're witnessing right now.

<v SPEAKER_00>Like these three things like perfectly explain this within like the normal macroeconomic, like neoclassical model, without so like even like the presumption that, like, okay, there's something specifically so weird about this market that like it's impossible to imagine us regulating it in like a normal way, is like, I don't think that well-right.

<v SPEAKER_01>Well, I and that's why I think the exception to the CAB is relevant.

<v SPEAKER_01>Um, America has some of our states are quite large.

<v SPEAKER_01>Um, and so there is meaningful air travel demand between the cities of Texas and between the cities of California.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>Right.

<v SPEAKER_01>And so in the 1970s, you know, reformers started noting, because it was this theoretical controversy, right?

<v SPEAKER_01>Like, how different is aviation from a textbook perfect competition marketplace?

<v SPEAKER_01>It's somewhat different, but like everything.

<v SPEAKER_01>Right, exactly.

<v SPEAKER_01>But like, is it really so different in a relevant way?

<v SPEAKER_01>And they said, well, you can look at flying from LA to San Francisco and compare it to flying DC to Boston because these are very similar distances.

<v SPEAKER_01>It's similar, like affluent big metro markets.

<v SPEAKER_01>And the Intra-California route was way cheaper because to put numbers on it.

<v SPEAKER_00>So like the lowest fare between Boston and Washington that was served only by um uh CAB certified trunk carriers was$24.65.

<v SPEAKER_00>I mean, that sounds really cheap anyway, but but the Pacific Southwest Airlines, using the same equipment, carried passengers between Los Angeles and San Francisco, um, which is only 59 miles closer for$11.43.

<v SPEAKER_00>The jet fare was only$13.50.

<v SPEAKER_00>So that's a huge difference.

<v SPEAKER_00>I mean, this is why the argument for um airline deregulation was so strong is that like you could just look at what was happening inside of these states and just go, like, clearly, this like regulated market is not providing cheap airfare.

<v SPEAKER_00>And to be clear, like they knew that.

<v SPEAKER_00>Like, that was like the point.

<v SPEAKER_00>Like they were raising prices for things that they thought were worth it.

<v SPEAKER_00>And um, I mean, way above market.

<v SPEAKER_00>And it's so interesting, like the the fares they were rising, it was about like 20, the 1972 estimate was that fares were 20% to 100% above competition cost.

<v SPEAKER_00>And you'd expect, like, are all these like airlines like raking it in?

<v SPEAKER_00>Like, were they all just making massive profits?

<v SPEAKER_00>They like weren't, um, which is kind of weird.

<v SPEAKER_00>And they look into it, and basically what's happening is that they're trying to they can't compete um on cost.

<v SPEAKER_00>And so they're trying they can't control most of the dimensions that airlines normally get to control because the CAB was regulating all of those.

<v SPEAKER_00>So instead, they're like competing in other weird ways.

<v SPEAKER_00>So carriers are trying to grab market share by flying more flights than the road justifies.

<v SPEAKER_00>They buy bigger, fancier planes, they serve real meals, they have piano bars on 747s, all that stuff.

<v SPEAKER_00>But this is why the planes were so nice.

<v SPEAKER_00>Yeah, and that's but that costs money.

<v SPEAKER_00>The craziest part of it is that um, the the single number of the copers as well is that by the early 1970s, planes were flying with average load factors below 50%.

<v SPEAKER_00>They were half empty.

<v SPEAKER_00>And today it's roughly 85%.

<v SPEAKER_00>So, like, I mean, I don't know.

<v SPEAKER_00>I guess we don't like we didn't care about climate change then.

<v SPEAKER_00>But like that seems like quite sure.

<v SPEAKER_01>Right, right, right, right.

<v SPEAKER_01>So, you know, this is why deregulation happens, right?

<v SPEAKER_01>People got concerned about inflation in the 1970s.

<v SPEAKER_00>Nader and the big party.

<v SPEAKER_00>Right.

<v SPEAKER_01>So people started looking at different things.

<v SPEAKER_01>Um, Ralph Nader at the time was a big proponent of airline deregulation.

<v SPEAKER_01>Um, Stephen Breyer, who became a Supreme Court justice later, was Ted Kennedy's like policy guy working on this.

<v SPEAKER_01>Um Jimmy Carter was converted to the cause.

<v SPEAKER_01>A guy named Alfred Kahn uh was a regulatory economist and you know, uh did a lot of like modeling work on like why this would be better.

<v SPEAKER_01>And he was put in charge of the CAB with like a mandate to dismantle it.

<v SPEAKER_01>Uh bipartisan law was passed.

<v SPEAKER_01>And this was one of like a number of different things that happened in Carter's term that sort of like inaugurate the era of neoliberalism.

<v SPEAKER_01>And so many of the disputes that we have, I mean, it's not it would it would be wildly overstated to say that like everything everybody says about Amazon is like just secretly about airline deregulation.

<v SPEAKER_01>It's that understanding like I think that when the abundance book came out, I think that a lot of people were surprised that that text took so much fire from the anti-monopoly movement.

<v SPEAKER_01>Because on its face, like a book about abundance and growth seems like it has an obvious potential conflict with um at least certain segments of the environmental movement that are like avowedly degrowth.

<v SPEAKER_01>A lot of people, I mean, every like talk, every conference I've seen about this, people are like labor unions, you know, because they they like see attention in in economic policy, but antitrust enforcement to like not have monopolies is like just supposed to be pro-growth policy.

<v SPEAKER_00>And also like, to be clear, removing the barriers for building new housing typologies and reducing the cost to entry of that market is pro-competition behavior.

<v SPEAKER_00>In California, where they made it legal to build ADUs after like 30 years of laws, you saw like a bunch of new firms enter the market that are like ADU firms.

<v SPEAKER_00>And like that's exactly pro-competition behavior.

<v SPEAKER_01>If you're using these words in a normal way, it's not just that like there's no tension between these goals, like it's just the same.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>Right?

<v SPEAKER_01>Like all the like abundancy deregulatory stuff, the purpose is to promote competition.

<v SPEAKER_01>Yes.

<v SPEAKER_01>All the regulatory anti-monopoly stuff in like a normal universe is to like prevent illicit cartels from like privately uh blocking competition.

<v SPEAKER_01>But the reason, but it's not like this is just some big misunderstanding.

<v SPEAKER_01>Or, you know, when I interviewed Ezra and Derek about this, I think Ezra was saying, like, well, you know, it's like a competition over attention.

<v SPEAKER_01>He's really into attention.

<v SPEAKER_01>But like, I think part of it.

<v SPEAKER_01>It's a sure, but like there is a genuine, like big ideological disagreement, which is like a a lot of things happened downstream of airline deregulation that a person could plausibly construe as undesirable.

<v SPEAKER_01>Like Justice Breyer said, you know, I feel sort of bad about the extent to which workers in the industry ended up taking it on the chin as a result of this.

<v SPEAKER_01>I think a lot of journalists wish that their economy airfares got them nicer flights if the plane was half empty.

<v SPEAKER_01>Like that would be really cool.

<v SPEAKER_01>You get some more elbow room, things like that.

<v SPEAKER_01>Uh Longman and Khan, in their article, they outline this theory that, you know, I think is there's something to it, which is that, like, in a CAB universe, you would not have been allowed to just like pull metal out of these industrial Midwestern cities and reallocate flights to the growing Sunbelt.

<v SPEAKER_01>And that could have helped prop up the economies of cities like St.

<v SPEAKER_01>Louis and Cincinnati and Cleveland that have been in a state of decline.

<v SPEAKER_01>Now, they put like a ton of interpretive weight on this as a causal factor, but it's just definitely true that if you have this regulator who is like literally telling every airline in America where they can and cannot fly airplanes, that gives the federal government a lot more ability to do like industrial, you know, to shape the economy.

<v SPEAKER_00>But I think important is actually really important because it's this this actually is part of um this obsession with regional inequality and this obsession with um, you know, specific places needing to be propped up.

<v SPEAKER_00>I don't hate the Midwest.

<v SPEAKER_00>Don't say that.

<v SPEAKER_00>I I like the con piece you're referencing begins with this anecdote of the CEO of Chiquita Brands International, like the banana, like used to be United Fruit Company.

<v SPEAKER_00>It's kind of funny that this is their hero given the sordid history of the United Fruit Company in in Latin America and beyond.

<v SPEAKER_00>But basically it's-I mean, it is a sad story.

<v SPEAKER_00>It's like he like you know, he like loved Cincinnati, they'd they'd been there for a while, it was no longer a hub, it was difficult to attract talent, it was difficult to get around business travelers, so they moved to Charlotte.

<v SPEAKER_00>And like this is like the entire like intro of this piece.

<v SPEAKER_01>And like the whole idea of a banana company being headquartered in Ohio is like borderline absurd.

<v SPEAKER_00>I don't know what I mean.

<v SPEAKER_00>But the guy was like really obsessed with Cincinnati and then he didn't really like NASCAR, and like that was like sad, and like whatever.

<v SPEAKER_00>And I thought like this is like such a fundamentally conservative position, like small C conservative position, to be like we think that there are certain places the thing the places that used to have airline hubs like must continue to have them, and like that's probably because like it's not like there's like a principled thing here where any city that's like the size of X should have an airline, because that would just be like insane.

<v SPEAKER_00>And like right now we have this system, like after the airline deregulation happened, we created these EAS subsidies, um essential air service program, um, in order to make sure that like places would not just immediately lose all of their airline uh uh uh access.

<v SPEAKER_00>And it's like the eligibility is basically based on places that had service like over 40 years ago when the industry was deregulated.

<v SPEAKER_00>And so like you have like Ogdensburg, New York, 20,000 people.

<v SPEAKER_01>EAS is about really small towns going to zero air service.

<v SPEAKER_01>But like the the Longman point is just that certain primarily Midwestern cities that were, you know, in the 1940s among the biggest cities in America used to be airline hubs.

<v SPEAKER_01>A lot of those hubs have been dismantled, and now Charlotte, Miami, Phoenix, Dallas are hubs.

<v SPEAKER_01>And the collapse of population in the city of St.

<v SPEAKER_01>Louis is like a genuine kind of like American tragedy.

<v SPEAKER_01>That being said, it's just like why should the purpose of national aviation policy be to prevent people from moving from St.

<v SPEAKER_01>Louis to Phoenix?

<v SPEAKER_00>Like if that's I do think that the I believe in human freedom.

<v SPEAKER_00>I mean, I I agree.

<v SPEAKER_00>And I think it's also like that the limiting principle here is actually what gets at like what's weird about this is just sort of like, what is sort of our level at which we're willing to do this?

<v SPEAKER_00>Because it's not just like costless, right?

<v SPEAKER_00>Like all of that, like when the CAB had those prices there were 20% to 100% over what the competitive price likely would have been, like that's being paid by people.

<v SPEAKER_00>So the question is not like, oh, don't we think it would be great if someone in Cincinnati had direct flights to like everywhere in the country and international markets as well.

<v SPEAKER_00>It's how much do you think we should be willing to pay for it?

<v SPEAKER_00>And I don't know, like I think there's like a weird level of disdain that a lot of these people have for the like cosmopolitan elite, despite they themselves being a part of it.

<v SPEAKER_00>Like in the con article, um, there's like this line that says, if you are in the business of making and trading stuff beyond derivatives and concepts, you probably have to go to places like Cincinnati, Pittsburgh, Memphis, St.

<v SPEAKER_00>Louis, or Minneapolis.

<v SPEAKER_00>And you know how firsthand how hard it has become to do business these days in such major heartland cities, which are increasingly cut off from each other and from the global economy.

<v SPEAKER_00>And it's like, first of all, like your job is trading concepts too.

<v SPEAKER_00>So like I don't really know where this is coming from.

<v SPEAKER_00>But I think there's also this weird sense, again, like real America is in this place, and like everyone else who lives in like these like high population density, whether cities or suburbs, like everywhere else in the country, like use like fake Americans.

<v SPEAKER_00>This is just like a very fundamentally conservative argument.

<v SPEAKER_01>Yes, but also I mean, I just find in particular the discourse here never spotlights the actual trade-off, which is not just that like okay, some Midwestern cities lost service and then what?

<v SPEAKER_01>It's right, it's so it's like there are more flights than ever before in America.

<v SPEAKER_01>The American population has grown and the per capita use of airplanes has also grown.

<v SPEAKER_00>The decline in prices, like roughly 60% can be attributed to deregulation.

<v SPEAKER_01>But also, I mean, if you go back to 1970, whenever it is that, you know, Chiquita Banana was in Cincinnati, there were way fewer flights to Austin, way fewer flights to Las Vegas, way fewer flights to Tampa, you know, and so it's like, I I don't know.

<v SPEAKER_01>You know, it's just like the economy.

<v SPEAKER_00>I think this is part of why they're like so hostile to like sort of Yimbyism.

<v SPEAKER_00>Because a lot of when you look at like the Yimbi original economics literature, it's focused on the innovative capacity of agglomeration, right?

<v SPEAKER_00>Like part of what's going on here is that folks like um uh you know Ed Glazer and other economists, Moretti, et cetera, are looking at like the agglomeration of people in places like Los Angeles or these superstar cities.

<v SPEAKER_00>And that's like a positive thing.

<v SPEAKER_00>Like that's like innovation happens in these places, new firms get developed, new ideas, like cities are really great engines of opportunity and economic growth, and you know, like all these cures for things come out of these, like these like hubs or whatever.

<v SPEAKER_00>And that's like not because there's something just like special in the water and like Silicon Valley or whatever.

<v SPEAKER_00>It's like that like a lot of people who are are together, and like that just creates much more potential for new ideas to flourish.

<v SPEAKER_00>It also lets people start new firms in a place where there's like a thick labor market for the types of people that they are like trying to hire for and from.

<v SPEAKER_00>And all of this, like there's like hostility to this attitude, is like kind of a sense that like that's actually bad.

<v SPEAKER_00>That like everyone, I I was at this, like, I did this panel once, and it was like a Chatham House rule, so I can't be very specific about it.

<v SPEAKER_00>But like, I was just like talking broadly.

<v SPEAKER_00>I was like doing actually it was just an interview, I was just talking about like, you know, all the benefits that kind of accrue, like doing my normal shtick about Yimbiism and agglomeration and economic growth.

<v SPEAKER_00>And like there were just like a lot of these kinds of people in the audience, and they were just like they didn't care about the lower cost.

<v SPEAKER_00>They didn't care about the innovation and the benefits.

<v SPEAKER_00>It was like, no, it's fundamentally bad that there are always people agglomerating in Seattle and DC and New York.

<v SPEAKER_00>That's just bad.

<v SPEAKER_01>But I just also, you know, read some of this in the other direction, right?

<v SPEAKER_01>Which is that like part of the whole argument around the CAB, right, was well, this technocratic analysis will give us like a better outcome than the slightly messy.

<v SPEAKER_01>Um David Ox has a good article about like competition in the airline industry.

<v SPEAKER_01>And what's true is that, you know, essentially because planes are so big, right?

<v SPEAKER_01>You can you can only compete in these kind of giant chunks, right?

<v SPEAKER_01>It's not like um it's hard to compete on the margin.

<v SPEAKER_01>So there's a tendency for an individual market to sort of lurch between somebody's reaping big profits here to now everybody's losing money.

<v SPEAKER_01>And it's it's odd, it's kind of jarring.

<v SPEAKER_01>And so you could have like an expert regulator just like make everything be smoother.

<v SPEAKER_01>But like, would that happen in real life, right?

<v SPEAKER_01>And I think just an obvious thing that might happen is some airline might say way more people live in Austin today than used to, but fewer people live in St.

<v SPEAKER_01>Louis than used to.

<v SPEAKER_01>So instead of my plane going from Chicago to St.

<v SPEAKER_01>Louis, I want to send it to Austin.

<v SPEAKER_01>Yes.

<v SPEAKER_01>And then the senator from Missouri is gonna be like, fuck no.

<v SPEAKER_01>And so then you like can't allocate the airplanes correctly.

<v SPEAKER_00>I mean, this literally happens right now with EAS subsidies.

<v SPEAKER_00>Like there's a study, but there's a study that shows that the subsidies are the biggest in cities represented by elected Congresspeople on the House Transportation Committee.

<v SPEAKER_01>Yes, I mean it happens all the time when you have this kind of regulated function.

<v SPEAKER_01>So now I I want to quote uh Phil Longman uh 2025 article about this.

<v SPEAKER_01>And he says it's not hard to imagine, for instance, politicians from both parties who represent quote unquote flyover cities banding together to demand more equitable, affordable, and practical air service through a new regulatory regime, perhaps one that takes advantage of AI and other modern data processing tools to make pricing and other regulatory functions more precise than under the old CAB system.

<v SPEAKER_01>I think that's incredibly naive, whatever, whatever.

<v SPEAKER_01>But to be clear, the guy who has this take about how we need to do central planning, right?

<v SPEAKER_01>And that we're gonna use AI to make the central planning really good, his job title is that he's policy director at the Open Markets Institute.

<v SPEAKER_01>And like this is why I'm so in on my tinfoil hat, because I think that a lot of people are genuinely confused as to like what this debate is about.

<v SPEAKER_02>Yeah.

<v SPEAKER_01>Because if it was called, if Phil Longman's organization was called the Central Planning Institute and the American Economic Liberties Project was called the Technocratic Regulators Can Improve on Market Outcomes Institute, then nobody would be confused.

<v SPEAKER_01>Why they were beefing with abundance.

<v SPEAKER_01>Why do the advocates of central planning dislike this mild-mannered like zoning change?

<v SPEAKER_01>And we could say, like, listen, we we are like having a debate, right?

<v SPEAKER_01>It would also help explain why this is a debate like inside Democratic Party politics, right?

<v SPEAKER_01>It's a debate about whether what it means to be a center-left political party should be to be like a capitalism and welfare state party, or it should be a central planning party.

<v SPEAKER_00>And aside, I do actually wonder whether AI makes like the Hayekian argument that like you can't actually have a regulator that knows enough to essentially plan properly, whether that actually really undermines that.

<v SPEAKER_01>I mean, I think this is a that is a really important debate that we should discuss at some point.

<v SPEAKER_01>Um this is like, do you know um Francis Spooford's book, Read Plenty?

<v SPEAKER_00>Oh yeah.

<v SPEAKER_01>Because that's like kind of what it's about.

<v SPEAKER_01>It's like, can can like can we make uh central planning work with like with better computers, right?

<v SPEAKER_00>But like that's what I think the problem here is that like it's not even, I want to be clear, like there's so many normative assumptions baked in.

<v SPEAKER_00>It's not even just central planning, which I think is like also like part of what's going on here.

<v SPEAKER_00>It's also like you could do central planning for the purpose of like maximizing efficiency and output.

<v SPEAKER_00>Like you could like have like a goal of saying, like, okay, we actually would want these planes to route to places where there's high population centers.

<v SPEAKER_00>We do like the fact that there's like this growing industry in Silicon Valley, and like we do think that like Charlotte is clearly a growing hub for whatever reasons and like biotech and like the you know, the research triangle or whatever it is.

<v SPEAKER_00>And like we're going to like do central planning for the purpose of like maximizing growth and output.

<v SPEAKER_00>But like they have a specific normative judgment, right?

<v SPEAKER_00>That like actually there is a specific, I don't know, it's like a nostalgia for this way that the economy looked at this particular point in time under like New Deal prominence.

<v SPEAKER_00>And it's not even just the specific policies, it's also the fact that Cincinnati was a major city.

<v SPEAKER_00>It's like Detroit was a major city.

<v SPEAKER_00>Like these things are like very important to them for some reason.

<v SPEAKER_00>And like there's so many normative judgments about that that I think that are like really unstated, which is like, hey, like, efficiency is not just like a, you know, annoying technocratic term.

<v SPEAKER_00>It like speaks to the fact that like everyone gets to pay less.

<v SPEAKER_00>And I just think it's like really weird that in this moment of like affordability, where like inflation is like the driving concern that people have in the electorate on both the right and the left, that like this movement, which is like quite literally objectively about like raising prices for the purpose of paying for things that they think are worth it, is like trying to cast itself as like this like affordability hero.

<v SPEAKER_00>And I'm like, I don't know, like seeing it.

<v SPEAKER_01>Well, I mean, again, again, like this is why I think the tinfoil hat is necessary because it's like the whole watchword of affordability is interesting, right?

<v SPEAKER_01>Because like in a literal sense, right?

<v SPEAKER_01>Like, can I afford, you know, this laptop, right?

<v SPEAKER_01>That's a function of the price of the laptop and my income.

<v SPEAKER_03>Yeah.

<v SPEAKER_01>So affordability is just economic growth, right?

<v SPEAKER_01>Like when there's economic growth, there is more affordability.

<v SPEAKER_01>So why, like, why do we have to talk about why do we have to obsessively invoke the word affordability, right?

<v SPEAKER_01>And it's like, well, because if you get people to not think about economic growth and you just like get them on some other track that's like affordability, affordability, affordability, then like maybe price controls is the answer.

<v SPEAKER_00>Well, I think also that there's like a short-term problem.

<v SPEAKER_00>Like economic growth, correct, is like the fundamental driver of affordability, but like it does so, like not tomorrow.

<v SPEAKER_01>Yeah, yeah, yeah.

<v SPEAKER_01>Right.

<v SPEAKER_01>We're right.

<v SPEAKER_01>But I mean, it just means we're not having a conversation anymore about like the long term and the short term and inflation and blah, blah, blah.

<v SPEAKER_01>We're like letting all these other ideas in through the back door, right?

<v SPEAKER_01>So, like theoretically, the idea of the CAB price control regime could be to prevent people from, you know, exploitation at the at the hands of airlines, right?

<v SPEAKER_01>Like when there happens to be an oil price shock, you know, that's not the case.

<v SPEAKER_01>But again, like Longman's article is full of this idea that like people are getting gouged and that passengers are suffering.

<v SPEAKER_01>And like, you know, none of it's true because he is asserting that like the failures of the CAB system are down to the amount of computing power that exists there, rather than that, like this is a fundamentally unsound way to run an economy.

<v SPEAKER_01>And this practice that like Buddhic was invoking in the political article of just kind of like spot the deviation from you know, like total undifferentiated commodity, and then be like, now we're we're bringing in the central planning.

<v SPEAKER_01>Like, it's like a really bad way to make economic policy.

<v SPEAKER_01>And we also have to I know that I sound crazy, but it's like I I like I really need people to understand that like these are not disputes about like are monopolies good, or like, should the government enforce antitrust rules?

<v SPEAKER_01>It's disputes about do we want an open competitive market in which companies fail, in which companies try to reduce labor costs and other things and succeed?

<v SPEAKER_01>Or do we want to create this you know, regulated economy that yes, like let's us put forward alleged social goods, like, you know, we want to prop up the economy of Cincinnati.

<v SPEAKER_01>Um, and even things that I would agree are good, right?

<v SPEAKER_01>Like you could steer toward like greener aviation if you were controlling every aspect of the system.

<v SPEAKER_01>It's just like it's incredibly costly.

<v SPEAKER_00>I also think that we I mean, to me, the real tell of all of this is when I started doing some research on what happens in other regional markets.

<v SPEAKER_00>Like the US is one of a handful of major aviation markets that combines like two of the most protectionist policies that are like obviously anti-competitive.

<v SPEAKER_00>One is a ban on cabotage, which is like foreign carriers can't fly US points, uh it was fly between two US points.

<v SPEAKER_01>And emirates can't go like Dubai to New York, then New York to LA and back around to the U.S.

<v SPEAKER_00>And also there's a hard cap on foreign ownership of US airlines, 25% voting stock, 49% equity.

<v SPEAKER_00>Um, and like you combine that with the fact that Chapter 11 lets like weak US carriers restructure rather than die, and you get like a system that's like really, really good at keeping the existing four players.

<v SPEAKER_00>And I looked to see if there was like any evidence that like any of these people in the anti-monopoly wing of this party have like really come out against like cabotage and like for allowing foreign airlines to compete.

<v SPEAKER_00>And like it just like doesn't exist.

<v SPEAKER_00>Like in the EU, for instance, um, starting 1992 through like 1997, they have like a they've created a true single aviation market.

<v SPEAKER_00>So like 20 years after we do it, they like do a bunch of liberalization of their own airline industries.

<v SPEAKER_00>Um and then like that creates like real competition.

<v SPEAKER_00>So like Ryanair, EasyJet, Wiz, Vulin can base aircraft and run domestic routes anywhere in the EU block.

<v SPEAKER_00>And that result is that like the top five air European airline groups control about 45% of the market versus 80% for the top four in the US.

<v SPEAKER_00>And like I'm just sitting here like, okay, like I like to take people at face value.

<v SPEAKER_00>I don't like to read a lot into what they're saying here, but like it is very weird to me that like perhaps the single biggest unlock, not just for raising uh lowering prices for consumers, but also for like raising competition, is like basically unspoken by the anti-monopoly wing.

<v SPEAKER_00>I think in large part because they're like really aligning themselves with very much more like nationalistic elements of US policy and politics.

<v SPEAKER_00>But it's like it's just like bizarre.

<v SPEAKER_00>And I don't know, like I think also like when you look at the European market, like it's just like at some level, I'm like uh, you know, there's this belief that like, you know, uh the fact that Spirit goes bankrupt, the fact that there are bankruptcies in the US airline industry all the time is like really bad.

<v SPEAKER_00>It's like, okay, like I don't really know like if I have this something in my head about how much bankruptcy is okay, like why, like how much does it hurt consumers?

<v SPEAKER_00>Is like my question, I don't really care if a company goes bankrupt generally.

<v SPEAKER_00>Um, but like airline death in Europe is like really routine in the last few years.

<v SPEAKER_00>Uh um Alitalia, Flybee twice, Norwegians near collapse, Monarch, Thomas Cook, Air Berlin, wow, Primera, Cobalt Flyer, play, Brathens.

<v SPEAKER_00>I mean, these are all going bankrupt.

<v SPEAKER_01>Because if you think about a competitive market, right?

<v SPEAKER_01>If I was to be like, wow, over the past 10 years, a lot of restaurants in America have closed.

<v SPEAKER_01>You'd be like, sure.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>And a lot of restaurants open, right?

<v SPEAKER_01>And like in a recession, more restaurants close than open.

<v SPEAKER_01>And in a growth cycle, more open than close.

<v SPEAKER_01>But it's just like, that's what competitive markets are like.

<v SPEAKER_01>That's what anti-monopoly is.

<v SPEAKER_00>And there's like a legit paper about bankruptcy and pricing behavior in US airline markets from AER.

<v SPEAKER_00>I have all my papers, Matt.

<v SPEAKER_00>I did my research.

<v SPEAKER_00>Um Matt does not want me to fact Mac so much.

<v SPEAKER_00>He wants less fact.

<v SPEAKER_01>I don't know if I'm all theory.

<v SPEAKER_00>But like they look into what actually happens when a carrier enters chapter 11.

<v SPEAKER_00>They find that fares dip briefly, healthy rivals often don't follow.

<v SPEAKER_00>Um, and when bankrupt airlines abandon routes, competitors fill the slots quickly.

<v SPEAKER_00>They find no statistically discernible service decline at small or large airports when a carrier with operations there enters bankruptcy.

<v SPEAKER_00>So if the whole point of anti-monopoly is to be focused on the consumer and like consumers having fewer lower prices, better experience, like whatever it is, like if that's like literally what's happening here, then like why do they care so much about whether those bankruptcies?

<v SPEAKER_00>Like, and I think that to me this brings back my point about like this fundamentally conservative nature of this movement, because it's just like there's this like sense that like the existing institutions have to be protected.

<v SPEAKER_00>Like the specific things that are going on right now, or like the 1970s or the 1950s, the 1930s, whatever, like that was like good, and like we have to like get back to that.

<v SPEAKER_00>And it's just like, I don't know, like I'm not sure like if it's better that more people live in Detroit than live in like Washington, DC.

<v SPEAKER_00>Like, I don't, I don't know.

<v SPEAKER_00>Like, I feel like it's like freedom is good, people can make decisions.

<v SPEAKER_01>So that's fired.

<v SPEAKER_00>Should we move on?

<v SPEAKER_00>Do peer review?

<v SPEAKER_00>Yes, peer review.

<v SPEAKER_00>So uh peer review is a segment of this podcast where Matt and I look at uh an interesting new white paper.

<v SPEAKER_01>But you kept you kept wanting to quote academic research in the main segment, and it it ruins it.

<v SPEAKER_01>Because this is when we're talking about it.

<v SPEAKER_00>You gotta fact max all the time.

<v SPEAKER_00>Like theory doesn't take you all the way.

<v SPEAKER_00>This is an interesting paper.

<v SPEAKER_00>So this paper is about whether intra-household bargaining power shows up in what couples buy and whether gender-specific labor market shocks shift consumption toward whatever spouse got like the better outside option.

<v SPEAKER_00>They like do these like two not, they're like two natural experiments we're looking at.

<v SPEAKER_00>Like one is like the industrial robot adoption, um, which disproportionately displaced men in routine manufacturing.

<v SPEAKER_00>And then they also look at the fracking boom, which also disproportionately raised wages for less educated men.

<v SPEAKER_00>Um and they find that a standard deviation increase in robot exposure narrows the male-female spending gap by$20.

<v SPEAKER_00>Um, 4% I mean, shifting away from male-coded goods and toward female-coded goods.

<v SPEAKER_00>So basically, like as men are getting fucked over by the economy or male-specific jobs or male exposed jobs, uh, labor markets are more likely to be messed up.

<v SPEAKER_00>Like in the household, spending shifts towards like female coded goods.

<v SPEAKER_00>I guess like the theory here is obviously like the the literal market power within the household is like shifting towards what it's not just, you know, people say coded all the time now.

<v SPEAKER_01>But like what they actually do is they look at what do single men and what do single women buy.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>Right.

<v SPEAKER_01>And so then they show that when then they look at married couples, right?

<v SPEAKER_01>And so within a couple, if like men's earning power declines, the household consumption starts to look more like the consumption of a single woman.

<v SPEAKER_01>Um, and then with fracking, it's the opposite.

<v SPEAKER_00>And I mean, you can read this like a lot of different ways.

<v SPEAKER_00>One thing that's interesting about the paper is they find that the effect is stronger in like college-educated couples, which indicates to me this is like an egalitarian mechanism when you're looking at the um power of women going up.

<v SPEAKER_00>Um and so like you could just imagine, right?

<v SPEAKER_00>Like a world where there's like, you know, if you're talking about the 1950s, 60s, last week or episode was about Betty Friedan's The Feminine Mystique, and you have like a male earner and he like controls the money and like he has a bank account, and the woman maybe has like specific access to parts of the uh budget.

<v SPEAKER_00>So like more of the budget is literally just controlled by the male spending decision.

<v SPEAKER_00>So even if like at the grocery store are you making choices between two different things, like maybe the guy is buying, making those decisions more so.

<v SPEAKER_00>But like in a world where women are also earning and now maybe earning more in some cases, or at least are like earning more relatively to their previous labor market positions, like they now have more power.

<v SPEAKER_00>So it's like potentially an interesting story.

<v SPEAKER_00>And I think it's interesting from an AI perspective too.

<v SPEAKER_01>Um yeah, I mean, I guess my quibble doubt, I don't know, something about this, right, is when I think about intra-household bargaining over this kind of thing.

<v SPEAKER_01>I feel like like I get why they did the paper this way.

<v SPEAKER_01>Uh, because you know, always when you're trying to do empirical research, you need like a tractable question, right?

<v SPEAKER_01>But this kind of shift from like like boy stuff to girl stuff, it's probably smaller than the question of who is actually making decisions around genuinely joint expenses, right?

<v SPEAKER_01>So like so much stuff isn't gendered in that way.

<v SPEAKER_01>Like single men, single women have refrigerators, they have stoves, they have cars, right?

<v SPEAKER_01>We're spending, you know, all spending money on this stuff.

<v SPEAKER_01>And then couples buy that stuff together, and you know, we we reason together and we reach a mutually agreeable decision.

<v SPEAKER_02>Hopefully.

<v SPEAKER_01>Hopefully.

<v SPEAKER_01>Uh but like clearly, I I I mean, like, you know, on an informal basis, like somebody is getting more say than somebody else over these kinds of calls.

<v SPEAKER_01>And I feel like that's where the bargaining is to some extent most intense.

<v SPEAKER_00>Yeah.

<v SPEAKER_01>Precisely because it has to be bargained.

<v SPEAKER_00>Yeah.

<v SPEAKER_00>Right.

<v SPEAKER_00>I mean, if the if the thing is, I mean, you're not gonna have two fridge.

<v SPEAKER_00>Two fridges.

<v SPEAKER_01>Right.

<v SPEAKER_01>Yeah.

<v SPEAKER_00>And you know, different people just manage-rich people have like that garage fridge, sure.

<v SPEAKER_01>Which I learned about you can always have, I have two fridges.

<v SPEAKER_01>Um you can always manage these things in different ways, right?

<v SPEAKER_01>But it's like if you have a two-arner household, maybe, you know, both people just have some of their own money and then they have some pooled money.

<v SPEAKER_01>And so, sure, it's like if one person in the household starts making more money, maybe they're like totally discretionary expensive.

<v SPEAKER_01>You know, I don't know.

<v SPEAKER_01>Um I don't know what what do men buy?

<v SPEAKER_01>I'm like buying more scotch or something.

<v SPEAKER_01>Um But, you know, the the bargaining is like you actually do need to reach an agreement about like your couch, your fridge, like which house do you buy?

<v SPEAKER_00>I do think too, like the part that was perhaps most um most concerning to me was the impact on marriages and on fertility.

<v SPEAKER_00>So um shocks favoring women shift consumption and they also destabilize marriages, and shocks favoring men shift consumption weekly and they raise fertility within existing unit unions.

<v SPEAKER_00>And like there's like a not creepy way of like interpreting that, which is that like men are getting wealthier, maybe the woman's able to like now stay at home and have a kid without having some kind of like problem with their like earning, right?

<v SPEAKER_00>Like shock favoring men increasing the number of children.

<v SPEAKER_01>Yeah, sure.

<v SPEAKER_00>Yeah, if if if shock favoring men ends up increasing the fertility, that could be like a positive, like, oh great, honey, she you got a raise, like now we can have like a kid, right?

<v SPEAKER_00>Like that could be good.

<v SPEAKER_00>But like it indicates to me that also like that like women are I think that the fact that shocks favoring women destabilize marriages indicates that they're like unhappy women in marriages who like without money are not able to leave their husbands.

<v SPEAKER_00>The other interpretation is just that like in a marriage, men and women need to like bring things to the couple for like stable relationships to form.

<v SPEAKER_00>One of which is like you should be employed and like have a job and like it's important to take care of the family.

<v SPEAKER_00>And so, like, it's like really bad that like when someone lose their job or like maybe like you know, the fracking boom, et cetera, like that sort of thing like will break up households because like the number one financial stressor in marriage is is finances.

<v SPEAKER_00>So, like there's like lots of ways to interpret the status.

<v SPEAKER_01>Well, but wait, wait, wait.

<v SPEAKER_01>Let's let's give due credit to everybody for just being normal here because the the Who is that not normal?

<v SPEAKER_01>No, no, but no, no, just because the shocks that they had, right?

<v SPEAKER_01>The male favoring shock is a positive shock.

<v SPEAKER_02>Yeah.

<v SPEAKER_01>Right?

<v SPEAKER_01>It's like because of fracking, now working class men can earn a higher pay.

<v SPEAKER_01>The female skewing shock was a negative shock, right?

<v SPEAKER_01>They don't have in the study the question, what happens if something occurs that raises women's but it's like shocks favoring women relatively.

<v SPEAKER_01>We don't know what would happen, right, if you had the opposite, what would like like fracking for ladies.

<v SPEAKER_01>Um, you know, and so women's earnings just go up, right?

<v SPEAKER_01>Now, one thing that could happen is that could destabilize marriages.

<v SPEAKER_01>Maybe with their greater earning power, uh, these wives are like, fuck it, I don't need to put up with this guy and his bullshit anymore.

<v SPEAKER_01>But it also could be that it's like the male earnings boost.

<v SPEAKER_01>And they say, now we can afford like a nicer stroller, you know, or more car seats or, you know, babysitting.

<v SPEAKER_01>And so we should have more babies.

<v SPEAKER_01>Like We we just honestly don't know.

<v SPEAKER_01>Like the the the the research doesn't answer.

<v SPEAKER_00>It's in it's in the table.

<v SPEAKER_00>It's uh it's in table eight eight of the paper.

<v SPEAKER_00>Oh no.

<v SPEAKER_00>I don't know if you went to the table math.

<v SPEAKER_00>I didn't see the table.

<v SPEAKER_00>You didn't see the table.

<v SPEAKER_00>What happens in table eight n?

<v SPEAKER_00>You're not fact maxing enough.

<v SPEAKER_00>I'm not.

<v SPEAKER_00>Um basically there's uh one uh standard deviation increase in robot exposure produces a three percent decline in the marriage rate, a 13% increase in divorce, and a six percent decline in the number of children.

<v SPEAKER_00>Right.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>But I'm saying that's a negative shock to men.

<v SPEAKER_01>It's not a positive shock to women.

<v SPEAKER_01>Right.

<v SPEAKER_00>Yeah, yeah.

<v SPEAKER_01>So we just don't know.

<v SPEAKER_00>Yeah.

<v SPEAKER_01>Right?

<v SPEAKER_00>Like um, but I mean, like this model implies some stuff.

<v SPEAKER_01>Uh we think so?

<v SPEAKER_01>I've been pushing to do, to do, do the gender slop uh argument with you.

<v SPEAKER_01>This isn't gender sloping for a long time.

<v SPEAKER_00>These are facts.

<v SPEAKER_01>Yes, these are facts.

<v SPEAKER_01>I mean, this these are this is the way of the world.

<v SPEAKER_00>All right.

<v SPEAKER_00>If you guys want to hear a gender slop uh uh podcast, no, we're not gonna give you any more information about what that means.

<v SPEAKER_00>Uh shoot us a note.

<v SPEAKER_01>No, no, no, no.

<v SPEAKER_01>I I because I I just like I want to go back to the joint purchases though, because you know, what we we talked about feminine mystique last week.

<v SPEAKER_01>And, you know, one of the things Friedan is really um uh geared up about is like how much products are marketed toward housewives, right?

<v SPEAKER_01>Because at least like her perception of the 1950s economy is that um, even though women had like very little like uh financial control under that paradigm, they were the people making the purchasing decisions about all these appliances and things like that.

<v SPEAKER_01>And that's why, you know, there was so much like marketing focused on them, which is just to say, like, it's why I think that without looking at the balance of decision making over genuinely joint purchases, we're not like really plumbing the depths of what's occurring here.

<v SPEAKER_01>Um we're we're really just seeing that like if people have more money as an individual, they do more individual discretionary spending rather than fully sharing it equally with their spouse, which is interesting, but I don't know.

<v SPEAKER_00>Matt wants to be Matt's really faithful to what we can know.

<v SPEAKER_00>And I'm trying to trying to go by beyond that to the theory.

<v SPEAKER_00>What happened to theory?

<v SPEAKER_01>Uh I love theory.

<v SPEAKER_01>I just think we already knew from theory maxing um that uh, you know, uh I don't want no scrubs.

<v SPEAKER_01>Um, and so if industrial robots render you unemployable, like uh it's gonna be a problem.

<v SPEAKER_01>You're gonna have problems in life, yeah.

<v SPEAKER_00>All right, well, that's another episode of the argument.

<v SPEAKER_00>We'll see you next week.

<v SPEAKER_01>Well, please like, subscribe, share the podcast, tell the world we need to purchase discretionary consumer goods here.

<v SPEAKER_00>Yes, we do.

<v SPEAKER_00>Bye.

<v SPEAKER_00>Bye.