Congress and the airline merger: the small-R republican remedy

Congress may usually cleave along party lines, but it often divides along local lines as well. We are seeing this bipartisan and narrow parochialism in congressmen’s response to the news of the Delta-Northwest merger. Congress is dividing along regional lines of business interest in support of or opposition to the tie-up. The dynamics of the merger mean that the headquarters’ home state is thrilled but that other states fear losses of hubs, jobs, and connections. Senator Saxby Chambliss (R-Ga.) is proud of his hometown airline: “Delta has met its challenges head on and is in a strong position to continue its service to people all over the world. The bottom line is Georgia has always been home for Delta and that is the way it should remain for many more years.” Representative John Lewis of Atlanta, on the other side of the aisle from Chambliss, was even more effusive: “This is a great step for Delta. It is a powerful combination that should help strengthen the air transportation industry in this country. . . . This merger should make it easier for people in Atlanta and around the nation to fly, and it preserves the Delta name. The Delta headquarters will remain in Atlanta, which helps protect the economy of the city during a time of recession.”

But others are not so happy. Representative Jim Oberstar (D-Minn.), the powerful chairman of the House Transportation Committee and from the state of the to-be-acquired NWA, has already come out against any mergers. Today he reiterated his opposition (”Other airlines and network carriers will not be able to withstand the potential power of the largest airline in the world; it will be a globe straddling, mega carrier.”) and pledged to use his full oversight power to question airline consolidation. Senator Amy Klobuchar (D-Minn.) sounded a populist theme in defense of NWA: “Today’s merger announcement is not just about Wall Street. It’s also about Main Street, including the best interests of our consumers, workers and local communities.” She added: “Minnesota’s economy is particularly tied to Northwest’s success,” and she promised to make sure that Minnesota retains the current facilities, jobs, and services that NWA houses there. Senator Norm Coleman (R-Minn.) was also skeptical.

Senator Mitch McConnell (R-Ky.) represents the Cincinnati airport, at which Delta has a vulnerable hub. He made a stark pledge: “While I have been assured that CVG will continue to be an important component of these merged operations, I will carefully assess the proposed merger, and will not support it unless I am convinced that CVG and its workers will be protected.” Senators Bob Corker and Lamar Alexander (both R-Tenn.) also pledged to give special scrutiny to the merger. NWA’s Memphis hub, much smaller than the nearby Atlanta headquarters, is thought to be on the chopping block regardless of what the execs promise.

Watching the sides form reminds me of Federalist 10, which proposed an expansive commercial republic as the solution for the evils of faction, especially factions of commerce:

But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government.

The Constitution is meant to diffuse these factions (Georgia/Delta versus Minnesota/Northwest) by immersing them in the much larger republic, where most people aren’t tremendously concerned with this single large transaction. So Madison’s solution, the large commercial republic with representatives of the people,

to refine and enlarge the public views, by passing them through the medium of a chosen body of citizens, whose wisdom may best discern the true interest of their country, and whose patriotism and love of justice will be least likely to sacrifice it to temporary or partial considerations. Under such a regulation, it may well happen that the public voice, pronounced by the representatives of the people, will be more consonant to the public good than if pronounced by the people themselves, convened for the purpose.

The many passions of many factions ought to be diluted in Congress, which will then be more likely to seek the public good. Voila, says Madison, “a republican remedy for the diseases most incident to republican government.” How will this republican government handle the many factions of the Delta-Northwest merger? Stay tuned.