From the original article:
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A wave of consolidation that started in 2008 has left four U.S. airlines — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines — controlling more than 80 percent of the domestic air-travel market. Discount airlines such as Allegiant Air and Spirit Airlines have grown at breakneck speed but still carry a tiny fraction of overall passengers.
That control of the market has enabled the bigger airlines to charge more for tickets and not worry about being undercut by the competition. In addition, the airlines are taking in about $3.3 billion a year in fees. The result: record profits.
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In the days of the robber barons, the corporations formed cartels to set prices and control output.
So, the government passed antitrust laws.
These days, companies buy each other, or merge, or are purchased by so-called investment companies, and accomplish the same goals: limit supply and set prices by eliminating competition.
To protect the public, government has to set policies that promote competition and regulate in the public interest.
The last 20 years or so has seen the gutting of government regulatory authority. An important example is the repeal of the Glass-Steagall Act which, for the most part, separated commercial banks from investment banks (Wall Street securities firms).
Repeal of Glass-Steagall, critics argue, "permitted Wall Street investment banking firms to gamble with their depositors' money that was held in affiliated commercial banks."
http://en.wikipedia.org/wiki/Glass-Steagall_Act
Repeal of the Glass-Steagall Act was effectively accomplished by the Gramm–Leach–Bliley Act of 1999.
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It repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. With the passage of the Gramm–Leach–Bliley Act, commercial banks, investment banks, securities firms, and insurance companies were allowed to consolidate. Furthermore, it failed to give to the SEC or any other financial regulatory agency the authority to regulate large investment bank holding companies.[1] ”The legislation was signed into law by President Bill Clinton.
A year before the law was passed, Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass–Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998.[2] Less than a year later, GLB was passed to legalize these types of mergers on a permanent basis. The law also repealed Glass–Steagall's conflict of interest prohibitions "against simultaneous service by any officer, director, or employee of a securities firm as an officer, director, or employee of any member bank".
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Notice in this paragraph that the Federal Reserve does NOT work in the public interest.
http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act
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