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Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.
"A strong conviction that something must be done is the parent of many bad measures."
-- Daniel Webster
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Monday, July 19, 2010 :::
Infuriating:The Treasury Department failed to consider the economic fallout when it told General Motors and Chrysler to quickly shutter many dealerships as part of government-led bankruptcies, a federal watchdog found.
A report released Sunday by the special inspector general for the government's bailout program raised questions about whether the Obama administration's auto task force considered the job losses from the closings while pressuring the companies to reduce costs.
Treasury didn't show why the cuts were "either necessary for the sake of the companies' economic survival or prudent for the sake of the nation's economic recovery," said the audit by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, the $787 billion stimulus program known as TARP. So Barofsky is criticizing the administration for not doing enough to politicize the auto bankruptcies. Sticking it to the creditors and the rule of law to prop up big labor wasn't enough; the bankruptcy proceedings should have explicitly been used as a tool of economic policy. Where in Title 11 is that authorized?The report, sought by lawmakers critical of the dealership closings, was seized upon by Republicans who have questioned the administration's dealings with private industry during the economic downturn.
Rep. Darrell Issa, R-Calif., said the audit "should serve as a wake-up call as to the implications of politically orchestrated bailouts and how putting decisions about private enterprise in the hands of political appointees and bureaucrats can lead to costly and unintended consequences." I had a vaguely positive impression of Darrell Issa before this, but complaining about "politically orchestrated bailouts" in the course of demanding that bankruptcy proceedings be more thoroughly politicized does not endear him to me.
UPDATE: Upon further reflection, I'm a little bit more sympathetic to Issa. At any rate, screwing with the bankruptcy process in a manner that makes the economy better would be better than screwing with the bankruptcy process in a manner that makes the economy worse. And a politician can probably do better by hanging his hat on a more concrete argument (that the administration killed jobs) than a more abstract, if ultimately more important point (that the administration undermined priority rules). But judging the interference based on how many jobs it destroyed is inappropriate; if the administration had interfered in a way that created productive jobs in the short term, it would still constitute harm to civil society.Labels: bankruptcy, Darrell Issa
::: posted by Steven at 12:44 PM
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