Citizens' Issues
Airlines: The American Way
Three years ago, the Obama administration unleashed its might on behalf of beleaguered American air travellers, filing suit to block a mega-merger between American Airlines and US Airways. The Justice Department laid out a case that went well beyond one merger.
 
“Increasing consolidation among large airlines has hurt passengers,” the lawsuit said. “The major airlines have copied each other in raising fares, imposing new fees on travellers, reducing or eliminating service on a number of city pairs, and downgrading amenities.”
 
The Obama administration itself had helped create that reality by approving two previous mergers in the industry, which had seen nine major players shrink to five in a decade. In the lawsuit, the government was effectively admitting it had been wrong. It was now making a stand.
 
Then a mere three months later, the government stunned observers by backing down.
 
It announced a settlement that allowed American and US Airways to form the world’s largest airline in exchange for modest concessions that fell far short of addressing the concerns outlined in the lawsuit.
 
The Justice Department’s abrupt reversal came after the airlines tapped former Obama administration officials and other well-connected Democrats to launch an intense lobbying campaign, the full extent of which has never been reported.
 
They used their pull in the administration, including at the White House, and with a high-level friend at the Justice Department, going over the heads of staff prosecutors. And just days after the suit was announced, the airlines turned to Chicago Mayor Rahm Emanuel, Obama’s first White House chief of staff, to help push back against the Justice Department.
 
Some lawyers and officials who worked on the American-US Airways case now say they were “appalled” by the decision to settle, as one put it.
 
“It was a gross miscarriage of justice that that case was dropped and an outrage and an example of how our system should not work,” said Tom Horne, the former state attorney general of Arizona, one of seven states that were co-plaintiffs with the federal government.
 
As a candidate in 2007, President Obama pledged to “reinvigorate antitrust enforcement,” calling that the “American way to make capitalism work for consumers.” Hillary Clinton has recently made similar promises.
 
But the reversal in the American-US Airways case was part of what antitrust observers see as a string of disappointing decisions by the Obama administration.
 
“I hoped they would be much more aggressive and much more concerned about increasing concentration and ongoing predatory conduct,” said Thomas Horton, a former Justice Department antitrust attorney now at University of South Dakota law school. “Too often they really took the business side.”
 
Obama’s antitrust enforcers have been somewhat more aggressive than the Bush administration in challenging mergers. But that has come in the face of a record-breaking wave of often audacious deals. Nor has the Obama administration brought any major cases challenging companies that abuse their monopoly power. It approved three major airline mergers, for example, leaving four companies in control of more than 80 percent of the market.
 
In the American-US Airways case, Emanuel emerged as one of the deal’s biggest champions. He was in regular contact with the CEOs and lobbyists for both airlines.
 
“The combination of American Airlines and US Airways creates a better network than either carrier could build on its own,” Emanuel wrote in an October 2013 letter to the Justice Department that other mayors signed onto. “American’s substantial operations throughout the central United States provide critical coverage where US Airways is underdeveloped.”
 
The letter was an uncanny echo of the airlines’ arguments – for good reason: It was actually written by an American Airlines lobbyist, emails obtained by ProPublica show.
 
The day after sending the missive, as government lawyers were… Continue Reading…
 
Courtesy: ProPublica
 

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Panneerselvam given Jayalalithaa's portfolios, Opposition welcomes move
Ending suspense and speculations over Tamil Nadu's governance, the portfolios held by Chief Minister J.Jayalalithaa, who is currently in hospital, have been allocated to state Finance Minister O.Panneerselvam, a Raj Bhavan statement said on Tuesday.
 
According to the statement, Governor Ch.Vidyasagar Rao has, under Clause (3) of the Constitution's Article 166, allocated the subjects hitherto dealt with by Jayalalithaa to Panneerselvam on her advice.
 
Jayalalithaa held the portfolios of Public, Indian Administrative Service, Indian Police Service, Indian Forest Service, General Administration, District Revenue Officers, Police and Home.
 
Panneerselvam will also preside over the cabinet meetings.
 
"This arrangement has been made as per the advice of Hon'ble Chief Minister and will continue until the Hon'ble Chief Minister Selvi J Jayalalithaa resumes her duties. Selvi J Jayalalithaa will continue to be the Chief Minister," the Raj Bhavan statement said.
 
The 68-year-old Jayalalithaa was admitted to the hospital on September 22 for fever and dehydration.
 
The doctors later said she needed a longer stay at the hospital as she was suffering from infection and put her on respiratory support.
 
On October 8, the hospital said: "The respiratory support is closely watched and adjusted. Lungs decongestion treatment is being continued. All other comprehensive measures including nutrition, supportive therapy and passive physiotherapy are under way."
 
The ruling AIADMK has ruled out the need for an acting or temporary chief minister. Panneerselvam has earlier served as Chief Minister when Jayalalithaa had to step down in wake of her conviction in a corruption by a Bengaluru court. She had returned to the post after the Karnataka High Court acquitted her.
 
Reacting to the development, Congress' state unit president S.Thirunavukkarasar told IANS that it "is a welcome development for the continued functioning of the government".
 
He said the situation is similar to the one that existed when AIADMK founder, the late M.G. Ramachandran (MGR) was admitted to the same Apollo Hospitals in October 1984.
 
Leader of Opposition in the assembly, DMK's M.K.Stalin too welcomed the Governor's decision.
 
In a statement issued here, Stalin said the state has to handle several problems and there should be a ministry and it should have a head to take important decisions.
 
Speaking to IANS, political commentator Maalan Narayanan said in 1984, the then Governor Sundar Lal Khurana asked then Finance Minister V.R.Nedunchezhiyan to preside over the cabinet meetings and not to take any policy decision.
 
Senior AIADMK leader C.Ponnaiyan told IANS that the portfolios handled by MGR were allocated to Nedunchezian. 
 
According to Ponnaiyan, in 1984, MGR had instructed orally that his portfolios are to be handled by Nedunchezhiyan.
 
"As per the rules, the Chief Minister can orally tell any one or more cabinet colleagues to handle the portfolios. This is the practice followed across the country," he said.
 
According to him there is no provision in the Constitution for an acting Chief Minister.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  

 

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Gold imports' decline by 59% during January-September: Report
India's gold imports declined by 58.96% to 270 tonnes from January to September from 658 tonnes that were shipped-in during the corresponding period of last year, a research report said on Tuesday.
 
According to the report by the industry body Assocham, gold imports declined due to a prolonged strike by jewellers and continuation of 10% custom duty on imports. 
 
The report stated that smuggling of gold has been on the rise due to high custom duty, even as the industry demands a lower levy structure to encourage official imports. 
 
India has been among the two biggest gold consumers in the world with average imports of more than 1,000 tonnes per annum reported in the recent past.
 
Further, the industry body pointed-out that it expects gold prices to stay firm in the range of Rs30,500-Rs33,500 per 10 grams.
 
The report said that gold prices are expected to remain firm in the backdrop of continuous global political and financial risks coupled with revival in demand in the domestic market. The prices have appreciated by about 25% since January this year.
 
"The moot question among the buyers and analysts is whether scope for any further run is left when gold has seen so much of a rally, the best among all the assets classes - including quantitative easing led stock markets," the research paper by Assocham said.
 
"Revival in Indian consumption, financial risks in the Chinese economy, tapering tantrums of the US Federal Reserve as also close American Presidential elections are all seen as the push factors for the gold to remain as a safe haven." 
 
Currently, gold prices range from Rs31,000-Rs31,500 for 24 carat purity in major Indian cities. 
 
"Going forward, the festive demand will get a further push from the wedding season, which is the main contributor to gold consumption in India," the paper said.
 
"The upside in the short term of a few months is seen between Rs1,500-Rs2,000, while the downside could be limited to Rs1,000- Rs2,000 per ten grams." 
 
D.S. Rawat, Secretary General of Assocham said: "Gold is finding a strong support levels in the international markets and is expected to stay above $1,200 mark, as a starting point for the next possible rally."
 
"All in all, given the state of play in equity, debt and properties, gold would stand out for quite some time."
 
Rawat elaborated that negative interest rates by major global central banks have also led the investors to seek refuge in gold.
 
"The outlook for the precious metal remains upbeat taking into consideration several factors including reduced pace of the US Fed rate hikes, increased adoption of negative interest rates most recently in Japan, increased inflows in gold ETFs (equity trade funds) and decline in gold production," Rawat added.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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