Episode Transcript
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Speaker 1 (00:00):
Welcome.
Speaker 2 (00:01):
It is Verdict with Center, Ted Kruz, Ben Ferguson with you,
Senator as we are doing this show. It was a
pretty crazy week for airline fires, especially if you were
on Spirit Airlines. This was a crisis that was created
by the prior administration. They had been struggling for a
while and there was a bailout in essence in the
(00:22):
private sector with Jet Blue merger and guests who stopped it. Yeah,
the Biden administration and Americans need to know this story.
It's really important.
Speaker 3 (00:32):
Well, it is now an objective fact that Democrats kill
your Spirit.
Speaker 1 (00:38):
That of course.
Speaker 3 (00:39):
Means Spirit Airlines. As of this week, seventeen thousand employees
have lost their jobs. Now, look, Spirit was always an
ultra budget airlines. They always had challenges in their business model.
Those challenges resulted in for years Spirit losing money and
(01:03):
their customer service has been consistently at the very bottom
of airlines. All that being said, in twenty twenty four,
Spirit had a plan to survive and the plan was
to merge with Jet Blue. Jet Blue is another budget airline,
but unlike Spirit, jet Blue actually manages to provide pretty
(01:25):
decent customer service, and both Jet Blue and Spirit believed
combined they would be a much more effective competitor and
able to turn a profit. And in fact, Spirit Airlines
believe the only way Spirit could survive is if it
merged with Jet Blue. Well that would have happened, except
(01:48):
then the Democrats came along to kill it. Elizabeth Warren
led the charge saying we must stop Jet Blue and
Spirit for merging. Pete Boodhajetge led the charge, Merrick Garland
led the charge, and Joe Biden led the charge, and
they succeeded in blocking the merger. And now this week's
Spirit has gone totally bankrupt, which is what they said
(02:10):
would happen if they were not allowed to merge with
Jed Blue, and seventeen thousand people have lost their jobs.
We're going to break it all down for you on
today's pod.
Speaker 2 (02:21):
Yeah, it's an incredible story. And before we get into that,
I want to just talk to you about the International
Fellowship of Christians and Jews, the incredible work that they're
doing to help people in Israel right now, and so
many of you that have gotten involved, number one, thank you,
But there's still a lot of work to get done,
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(02:42):
on people's lives in Israel. All right, I want to
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Esther is living through days and nights of fear. Sirens
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the IFCJ, they are there, bringing her food, meeting her
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(03:47):
a very great mitzvah, A good deed you give from
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Speaker 1 (03:53):
Friends.
Speaker 2 (03:54):
I want you to know your gift to God's people
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(04:14):
Or go to IFCJ dot org. That's IFCJ dot org.
All right, Senator, So let's get back to the history
of Spirit Airlines. There was a very interesting post and
it went viral on x and an individual just said
Spirit Airlines died tonight the hands of socialist crusader Elizabeth Warren.
She must be proud to add another casket to her achievements.
(04:36):
Tonight at three am, Spirit turn off the lights. Fourteen
thousand jobs directly gone, thirty plus smaller airports loss service.
We now know those numbers are way bigger of the
number of job losses not just direct but indirect. And
to go back and remind the American people, JetBlue offered
three point eight billion in cash to buy Spirit in
(04:56):
twenty twenty two. The shareholders the fly Right Attendant union.
Literally everyone involved voted yes. The combined company would have
held nine percent of the US market against the Big
four that already owned eighty percent. And they were saying, oh,
this could create a monopoly. All right, those numbers don't
add up to a monopoly. Elizabeth Warren led the charges
(05:18):
you mentioned. She said no, She wrote letters, She pressured
Mayor Pete Botajeedge, who was then in charge of the
Department Transportation, then the Biden Department of Justice suit. A
federal judge killed the deal in January of twenty twenty four.
Her argument was simple, the merger would cost consumers a
billion a year. Will now look at the collateral damage.
This is the fault of the left who doesn't understand business,
(05:41):
and these socialists like Elizabeth Warren, in my opinion.
Speaker 1 (05:44):
Well and understood.
Speaker 3 (05:46):
Spirit Airlines was offered three point eight billion dollars just
two years ago.
Speaker 1 (05:51):
That would have been the difference.
Speaker 3 (05:52):
It could well have been the difference between surviving and
going under. And yet as a result of Elizabeth Warren
and Pete Boodh Judge and Joe Biden, Spirit got zero.
Speaker 1 (06:05):
You look at.
Speaker 3 (06:05):
Spirit and Jet Blue are two of the smallest players
in the entire arena. They're competing against much bigger airlines,
and so they were trying to come together to have
some scale to be a more effective competitor. When the
Biden administration blocked the merger, Elizabeth Warren celebrated. Here's what
(06:27):
she tweeted out quote, I've warned for months that a
Jet Blue, Spirit Airlines merger would have led to fewer
flights and higher fares. The US Department of Transportation was
right to stand up for consumers and fight against runaway
airline consolidation. This is a Biden win for flyers.
Speaker 4 (06:50):
Now.
Speaker 3 (06:51):
I got to say that last sentence. She's absolutely accurate.
This is a Biden win for flyers. You want to
see what a Biden win is. It is seventeen thousand
people losing their jobs. It is small communities losing the
air travel that was going into and out of those communities,
and it is less competition, which means ticket prices will rise. Altogether,
(07:14):
it is a disaster for consumers, which is exactly what
a Biden win for flyers is. Now, today, I guess
Elizabeth Warren realizes that there's a problem, that this is
not not good. So today she's tweeting something different. Now
she is tweeting the big four airlines American, Delta, Southwest,
(07:39):
United controls seventy five percent of the US market. Fewer
choices equals higher prices for you. Now once again, her
last sentence is exactly You're exactly right. Fewer choices equals
higher prices for you. And guess what, Elizabeth Warren just
gave you. Fewer choices, which means higher is for you.
(08:01):
This is misguided government control, and sadly it has real consequences.
Speaker 2 (08:08):
You know, it was going viral, the last Spirit Airline
flight to be actually carrying passengers, and the official sign
if it came into Texas and the DFW airport, the
flight attendants or airtrip control, I should say, they even said, Hey,
we wish you guys luck, you know, after an airline
that's been around for quite some time, and you know,
(08:29):
we feel for you guys. It's not just the seventeen
thousand jobs that you mentioned directly. That was just the
people in Spirit uniforms. The catering people they're gone, the
fuel guys they've lost their job. The baggage crews for
those airplanes they're gone. The gate agents they're gone. The airport,
coffee shops, the hotels, the rental cars, and seventy series
(08:53):
cities at Spirit Flutuo. That's going to change every airline
job they say carries three more on its back, so
in infrastructure because of that one job in the industry.
So you're now talking about an honest number of about
forty plus thousand people that are either out of work
or are basically losing major income, all because Elizabeth Warren's
(09:17):
insane crusade against you know this quote consolidation when she
just doesn't understand business or the math. Spirit Not only
now you talk about the other fallout center, and that
is Spirit abandoned ninety routes during the death spiral. Fars
on those routes went up about fifteen percent on average.
(09:38):
Oakland to Newark, for example, went from one thirty five
to two eighty eight. Fort Myers of San Juan went
from ninety two dollars to two hundred nineteen. Kansas City
to New York went up sixty six percent. So now
every consumer out there is probably going to be paying
a lot more money because of her not understanding.
Speaker 3 (09:56):
Business well and Elizabeth Warren spin and we're seeing this
repeated by a lot of the corporate media. She tweeted
out this week quote spiking fuel prices from Trump's war
was the nail in the coffin for twice bankrupted Spirit
Airline and their whole spin on this as well, it's
(10:17):
entirely because of fuel prices and that's because of Trump.
And look understand their talking point as always everything bad
is because of Trump. It is true that fuel cut
prices have gone up during this military conflict with Iran,
a military conflict that I believe is making America substantially safer.
Speaker 1 (10:35):
Fuel prices go up.
Speaker 3 (10:36):
They go down. That is part of running an airline.
Every other airline is dealing with fuel prices going up.
And ask yourself one question, would Spirit be better or
worse dealing with higher fuel prices if it had merged
with Jet Blue and had an additional.
Speaker 1 (10:55):
Three point eight billion dollars?
Speaker 3 (10:56):
Now, that is a question that answers itself is obvious. Now, Look,
is it possible that even if Spirit and Jet Blue
had merged that they might ultimately not survive. Sure, that's possible,
but the odds of the combined company surviving are much
much higher. And now, because Elizabeth Warren and Joe Biden,
(11:21):
Pete Budhajeedge jumped in and killed it. Spirit is gone
and I want you to listen to Pete Boodajedge cheering
on their efforts to block this merger.
Speaker 1 (11:31):
Give a listen.
Speaker 4 (11:33):
Our department, the Department of Transportation, has generally not gotten
involved in these merger cases, but that's changing today. It
is so important to make sure that passengers have choices,
that they have access to low fares, that they have
access to competition, and yet we've seen less and less
and less of that competition over the years. We are
(11:55):
taking a step that again is unusual in terms of
recent years, but we think is the right thing to do,
supporting the DOJ's lawsuit and independently using our own authorities
which are a little bit different from the DOJ, starting
our own investigation and taking other actions.
Speaker 2 (12:13):
This is again goes back to when you don't understand business,
and you don't understand what's happening in the marketplace, you
go and you look. There was studies that were done
talking about cheap carriers and markets drop fares by an
average of twenty one percent across the board. Southwest, by
the Way did this in the nineties. They saved Americans
(12:34):
about sixty eight billion over twenty years in fares, and
Elizabeth Warren killed it and said, oh, I'm giving you
more choice. Well, do we have more or less choice today?
Are we closer further away from a monopoly? Senator, you
already answered those two questions well.
Speaker 3 (12:51):
Pete Budajedge further tweeted in twenty twenty three, quote, Americans
deserve robust competition and affordable airfares, you asked. Department of
Transfer Tation supports DOJ's antifrust lawsuit, and we plan to
deny the Jet Blue Spirit request for an exemption on
their merger deal. We will continue with our own investigation
while supporting DOJ's work. Now that policy obviously failed. It
(13:16):
was a disaster. And by the way, if you're not
inclined to believe me on this, maybe you would believe
Near Attendon. So who was near attended Near attended as
a Democrat, she was the head of the Domestic Policy
Council in the Biden White House. So she is a
senior policy person in the Biden White House. Here's what
she tweeted this week. Quote, given the news today that
(13:40):
Spirit Airlines is shuddering and thousands of people are losing
their jobs. I think we should honestly assess whether the
Garland DOJ stopping the Jet Blue.
Speaker 1 (13:51):
Merger with Spirit Airlines was the right call.
Speaker 3 (13:55):
Perhaps it was, but any analysis must consider as part
of the equation the loss to so many families to decide.
Speaker 1 (14:04):
Look to her credit.
Speaker 3 (14:08):
That is now I think she got some real pushback
as Democrats scream no, no, no, no reason allowed, because
then she put a second comment. Lord, of course Trump's
war was the Spirit Airlines killer. Here, I'm simply asking
if we should assess all the evidence. I'm expecting the
third tweet to be I have now been located to
witness protection because no Democrat is allowed to dissent on anything,
(14:33):
but good for her for a moment. She hasn't as
of right now, deleted the tweet. It is kind of amusing.
The first one was sent at five point fifty four am,
and then the clarification, Oh no, no, no, it wasn't US,
it was Trump. It was Trump was at ten thirty
nine am. Yeah.
Speaker 2 (14:51):
That's actually got a lot of heat from people, right.
Speaker 1 (14:53):
Oh, enormous heat.
Speaker 3 (14:55):
You're not allowed to say anything remotely, honest, remotely re Instead,
it is a partisan line. Is the only thing that
that is acceptable.
Speaker 2 (15:08):
You you go back to when this merger and it
was it was an issue, right and and they decide
to flex their muscles. I'm still trying to understand exactly
why they thought this was a good idea. Who was
behind it? That's the other question I have. Or or
is it just that they genuinely have no idea how
(15:31):
the private sector works? Or is this just socialism and
the way that they do socialism where they're just like, oh,
we get involved in anything to flex our muscles and
show you our power because we think government is better
than everybody else.
Speaker 1 (15:44):
Yeah.
Speaker 3 (15:44):
Look, I think it's they have very little understanding basic
economics and they believe government power is always the right answer.
While Spirit and Jet Blue were litigating to merge, here's
what they said. They said, quote, we continue to believe
that our combination is the best opportunity to increase much
needed competition and choice by bringing low fares and great
(16:06):
service to more customers in more markets, while enhancing our
ability to compete with the dominant US carriers. And look,
often when you have a couple of giant providers. By
the way, there was chatter last month about United and
American merging. I think that would be terrible. Those are
both major and dominant providers, and they quickly abandoned that.
(16:29):
American put out a public statement saying we're not interested
in merging with United. That merger would unquestionably have run
into real antitrust concerns, because when you have dominant market
players combining, that's what the antitrust laws are designed for.
In this instance, you had two relatively small players in
(16:52):
the most vulnerable position wanting to join forces so that
they could be more effective competitors against the big guys.
The anti trust law is actually designed to allow that
and even encourage that. And yet the federal judge and
in Boston, Massachusetts, who entered the order blocking the merger,
(17:13):
wrote the following quote. While it is understandable that JetBlue
seeks inorganic growth through acquisition of aircraft that would eliminate
one of its primary competitors, the proposed acquisition, in this
court's attempt to predict the future in murky times, does
violence to the core principle of antitrust law to protect
(17:33):
the United States's markets and its market participants from anti
competitive harm. Now let me stop right there and We're
going to get a little bit wonky on two things.
Number One, what the court said, which was repeating what
the Biden DOJ had said to it is flat out
wrong as to the purpose of anti trust law, anti
(17:54):
trust law is not designed to protect market participants from
anti can competitive harm. It is designed to protect consumers.
That is a very different concept. So when democrats are
in charge, they want to use government to protect one
competitor from another. The purpose of the antitrust laws is
(18:19):
to protect consumers, and the way you do that is
by having robust competition. In this instance, JetBlue and Spirit
combined would have been a much more effective competitor than
the two splintered apart. And the anti trust analysis typically
looks at one of the central questions is what percentage
(18:42):
of the relevant market are the players that are seeking
to merge. The way that DOJ managed to hoodwink the
court into blocking the merger is they didn't define the
market as commercial air travel like in any normal world,
That's what you would think. If I want to fly
from Houston and New York, my market is who can
(19:04):
I go buy a ticket from that flies me there.
That would be a normal way to assess it. So
then you would look at Jet Blue and Spirit and
you would compare them to American Delta, United Southwest, and
then that would be the market. And looking at it
that way, jet Blue and Spirit are really small players
in that. Well, what doj argut is no, no, no. The
(19:25):
argument is not airline travel. The market is not airline travel.
The market is ultra budget airline travel. So it basically
defined the market as Jet Blue and Spirit, and that
it's said a well, gosh that if these two combine
there'd be no competition in the market. That is an
(19:46):
idiotic way to look at it. They literally hurt the
lowest cost competitors, and it is the presence of low
cost competitors and competitors fighting with each other that drives
down prices. And the consequence is they left the lowest
cost provider completely vulnerable. And by the way, this was
(20:08):
not a mystery. Both Spirit and Jet Blue were telling
them this over and over and over again. Do you
know what the Biden administration said when the merger was blocked?
Speaker 2 (20:21):
What'd they say?
Speaker 3 (20:22):
Attorney General Merrick Garland said the statement that the ruling
quote is a victory for tens of millions of travelers,
who would have faced higher fares and fewer choices had
the proposed merger between Jet Blue and Spirit been allowed
to go forward. Garland added that DOJ QUOTE will continue
to vigorously enforce the nation's antitrust laws to protect American consumers.
(20:45):
Now every word of that is gobbledegook and wrong, and
right now, seventeen thousand workers have lost their job and
American consumers are facing fewer choices and higher prices.
Speaker 2 (21:02):
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Compassion Die that's Compassion dot com. Let's talk about another
aspect of this, and it was the there was a
lot of you know, fodder online and there was a
lot of media reports that well, maybe America would would
give a government would give a bailout, we'd own you know,
(22:16):
eighty ninety percent of the company, whatever the number was.
Ultimately that did not happen. Explain, I hear bailout and
I always get real cringey. We've had some that have
been really good where we've gotten our money back as taxpayers,
but in this scenario, there's many that say, you know what,
it makes me really nervous. It did not happen. But
can you explain how the government getting involved with that
(22:38):
and and how that works and who's making that decision
of saying yes or no.
Speaker 1 (22:44):
Yeah.
Speaker 3 (22:44):
So, this last week there was considerable discussion about the
Trump administration potentially bailing out Spirit Airlines. And the bailout
that was being discussed was the federal government would give
Spirit Airlines five hundred million dollars and an exchange for that,
the federal government would own ninety percent of the airline.
(23:04):
And there were differences of opinions within the administration on that.
So the Secretary of Transportation, Sean Duffy was vocally arguing
against that, saying that's a bad idea. Howard Lutnik, the
Secretary of Commerce, was the one who was advocating this idea.
I publicly came out against it. I came out loudly.
(23:26):
I sent a tweet a little over a week ago
that said the following quote, this is an absolutely terrible idea.
The TARP corporate bailouts were a huge mistake, and the
government doesn't know a damn thing about running a failed
budget airline that the Biden administration killed. Now, when I
(23:51):
said that, I'm the chairman of the Senate Commerce Committee,
which has jurisdiction over re aviation. When I came out
against it, that got quite a bit of media, and
it prompted a number of other members of Congress spoke
out against it after I did so. I will tell you, Ben,
that was my public statement. I also went so last
(24:13):
week I had dinner with Howard Ludnik. Howard is a friend.
He and I worked together very very closely. He's the
Secretary of Commerce, and the Commerce Committee is is the
Senate committee that has jurisdiction over the Commerce Department. So
Howard and I had dinner last week, and a good
chunk of the dinner was spent discussing the potential Spirit bailout.
(24:38):
And I will tell you one on one with Howard.
It was just the two of us having dinner. I
leaned in really hard and said, this is an absolutely
horrible idea. Corporate bailouts are a bad, bad strategy. They
were a bad strategy when we did TARP. They're a
bad strategy when you had the government coming in and
bailing out giant corporation. But they're particularly bad when the
(25:03):
government doesn't know a damn thing about the business. And
so if we'd ended up giving five hundred million dollars
to Spirit and having the federal government own ninety percent
of Spirit Number one, I believe we would have lost
our money. In fact, I had said, somewhat cynically, a
better idea was simply to put five hundred million dollars
in a pile on the floor, pour gasoline on it,
(25:24):
and light it, because then at least you'd get some warmth.
You could like roast marshmallows by it. That would get
something positive and beneficial from it. But fundamentally, who in
their right mind thinks the federal government knows anything about
how you run an airline? How do you set pilot schedules,
(25:44):
how do you run baggage handling? How do you make
sure somebody's suitcase that's headed to Pittsburgh doesn't end up
in Milwaukee?
Speaker 1 (25:53):
How do you negotiate with.
Speaker 3 (25:55):
Pilots unions, with with flight attendant unions, how do you
ensure safety?
Speaker 1 (25:59):
And all of that.
Speaker 3 (26:01):
The federal government doesn't know a blooming thing about it,
And and it is a really dangerous road. Look, there
are some voices and some voices within the administration that
are pretty excited about the federal government taking ownership shares
in lots and lots of companies. I think that is
(26:24):
a really bad idea. And and and Ben, I'm going
to harken back to when I was a kid, when
I was in high school, and and you may recall
I was I was part of a group in Houston
that that that was called the Constitutional Corroborators, And it
was started by this nonprofit in Houston called the Free
Enterprise Education Center. And as high school kids, we studied
(26:47):
free market economics. We read Milton Friedman and Hayek and
Bastiat and von Mises, and we studied the Constitution and
we ended up touring around Texas speaking on the Constitution.
And it was five high school students. We would set
up easels and say we'd go to a Rotary club
or a Kawanas club or Alliance club, and folks would
(27:08):
be sitting there having lunch, and the five high school
students would set up easels and we would write from
memory the entire Constitution in shortened demonic form, and we
would write a definition of socialism, which is government ownership
or control of the means of distribution or production. And
(27:32):
the reason we wrote this, and this is what I
was doing at fourteen fifteen years old, is if you
don't know what it is, you can't identify it when
you have it. Well, the folks who are arguing the
federal government should own or control the means of production
and distribution and economy are directly arguing we should adopt
(27:53):
socialism for our economy.
Speaker 1 (27:55):
That is a really, really bad answer.
Speaker 3 (27:59):
And I think a budget airline made it obvious to
most observers. Look, there are limited circumstances, so, for example,
in national security, areas where you're dealing with critical minerals
and rare earth minerals, where it makes sense to have
some government control because you because you need to be
able to ensure that we can defend our nation from
(28:21):
national security threats. But outside that very limited category, it
is a really dangerous slippery slope to start having the
government be a shareholder, and especially be the biggest shareholder
in major companies. That's how you lose the competitiveness. How
that's how you lose the incredible success of the American
(28:43):
for enterprise system.
Speaker 2 (28:45):
Yeah, it really is there. You know, when things like
this happen, I always go back to their real people
that are affected by it, and there's always, you know,
people that are out without a job today. There's also
stories that come out of it that I think are amazing.
The New York Post had this story, and I think
it's a great way to just wrap this up in
a human way. It said, Spirit Airlines pilot give an
(29:06):
emotional sendoff from rival airline after his retirement flight, which
is a huge deal when you're a pilot was cut
amid the shutdown. The Spirit Airline pilot received a hero
sendoff with the help of another Airline Captain John Jackson
was scheduled to fly one last time for Spirit into
Baltimore Washington International on Saturday. When they ceased operations and
(29:30):
went out of business in the dead of the night.
Jackson was left stranded by the permanent shutdown. He hitched
a ride with Southwest Airlines in Fort Lauderdale. He rode
alongside his son, who was a first officer. And this
was the coolest part. It went online viral. They basically
Southwest gave him the send off that he deserved. Southwest
(29:54):
put it up on their social media. It went to
well over one hundred thousand people that respond to it
very quickly. They showed him in the cockpit with his son.
It was awesome, and I just got to say, even
when things like this happen, I do love seeing the
hearts of Americans and people that do this and gave
(30:14):
him a send off. The Southwest Airlines carry him. They
went under the Water Canyon salute after arriving at BWI.
I tell you it's awesome when you see things like
that happen. So to that retiring pilot he didn't get
his final flight job, well done to Southwest and thanks
for making that Guy's Day special.
Speaker 1 (30:32):
Well, good for Southwest that that was the right thing
to do.
Speaker 3 (30:35):
And I'll say Southwest is a great Texas company. American
Airlines was also a great Texas company. You know, Texas
is is really a critical hub for aviation. And I'll
say I fly just about every airline all the time.
I jokingly refer to Southwest as the company plane. Yet
you know, people ask sometimes they assume senators fly private
(30:57):
jets all around, and the vast majority of the time.
Speaker 1 (31:01):
You fly commercial and you fly coach.
Speaker 3 (31:03):
And so I tell people, I say, oh, yeah, I've
got a private jet. It's a seven thirty seven, and
it's with one hundred and thirty five of my closest
friends on Southwest. That's my private jet. But you know,
Southwest I think does a great job. And and that
was a very class move. I'm glad they honored the
spirit pilot who was retiring. I'm sorry that so many
(31:24):
other pilots are now out of a job. I think
many of them will end up getting hired by other airlines.
But it's still an awful lot of pain and hurt
from the disastrous Biden economic policies.
Speaker 2 (31:38):
Yeah, it's real life. This is going to affect people,
and I hope you will pay attention to exactly what
brought this to become a reality and the disaster it
ended up being. Don't forget we do this show Monday,
Wednesday Friday. Hit that subscribe or auto download button wherever
you get your podcasts, and make sure you also foll
us on YouTube as well the Center. I will see
you back here on Wednesday morning.
Speaker 3 (32:00):
Ye