Start with a simple fact: 17,000 jobs were lost when Spirit Airlines went under. Then, connect the dots: JetBlue offered to rescue Spirit, but former President Joe Biden’s Administration rejected the offer based on the belief that bigger companies are bad for workers and for consumers. Despite the evidence, much of Washington embraces this theory. And it’s wrong.
For years, government officials, academics, and journalists have repeated a simple story. Antitrust enforcement weakened beginning in the 1980s, mergers surged, industries consolidated, and competition declined. That story now underpins much of antitrust.
Former President Barack Obama embraced it. His Council of Economic Advisers warned of rising concentration and declining competition. Biden went further, declaring decades of evidence-based antitrust policy a failed “experiment” that allowed large firms to accumulate excessive power. His adviser Tim Wu explicitly called for turning the page on the consumer-welfare framework associated with the Chicago School.
Even business journalism has echoed the theme. Reporting in The Wall Street Journal and elsewhere has frequently treated the mantra of rising concentration as established fact—sometimes suggesting that mergers, even small ones, are quietly eroding competition.
But there’s a problem: The empirical foundation for this narrative is deeply flawed.
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