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Dealergate, Social Justice & the Obama Job-Killing Machine; Update: the Race Factor
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DUI: Driving under the influence…of Big Labor-pandering, left-wing radicals

My column today dives into the TARP special inspector general’s audit of the “Factors Affecting the Decisions of General Motors and Chrysler to Reduce Their Dealership Networks.” You can find it at the TARP OIG’s website here. I encourage you all to read through the entire 45-page report. The superficial MSM coverage of the audit, released late Sunday, didn’t do justice to the independent watchdog’s damning indictment of the arrogant bureaucrats in charge of nationalizing the U.S. auto industry — or the devastating consequences of politically-driven “shared sacrifice” with Obama, his SEIU cronies, and campaign lackeys behind the wheel.

Obama had the chutzpah to drag an unemployed car dealership employee laid off by Honda up on stage Monday to attack Republicans over government unemployment benefits. I suggest Republicans match him with a stage full of unemployed Chrysler and GM workers who lost their dealership jobs as a direct result of the capricious mandates of Obama’s non-expert auto experts.

A few trips back down memory lane before we get to the column: I’ve been hounding the Hayekian fatal conceit of Treasury’s TARP peddlers (under both Democrat and Republican administrations) from day one. And I’ve been hounding auto bailout supporters (both Democrat and Republican) since day one. Only the willfully blind and the woefully dumb couldn’t see what was coming.

Chicken Littles on Capitol Hill, I’m talking to you.

Update: William Tate notes the IG’s mention of t he race factor (as well as gender) in protecting some dealerships.


Dealergate: Destroying Jobs in the Name of “Shared Sacrifice”

by Michelle Malkin

Creators Syndicate

Copyright 2010

Everything you need to know about the nightmare of government-controlled businesses can be found in a damning new inspector general’s report on Dealergate. The independent review of how and why the Obama administration forced Chrysler and General Motors to oversee mass closures of car dealerships across the country reveals grisly incompetence, fatal bureaucratic hubris and Big Labor cronyism. No wonder you won’t hear much about the report’s in-depth details in the so-called mainstream media.

Under the guise of “saving” the American auto industry through a bipartisan, taxpayer-funded bailout now topping $80 billion, President Obama’s know-nothing bureaucrats pushed the car companies to eliminate thousands of jobs — with unjustified haste using dubious economic models.

Obama ordered the bailout recipients to “prove” their long-term viability by submitting restructuring plans. But White House and Treasury Department “experts” rejected the auto manufacturers’ proposals, citing the too-slow pace of their plans to reduce their dealership networks over a period of five years. Once the auto companies modified those plans to meet government-backed timelines, the money flowed.

But Neil Barofsky, the federal watchdog overseeing the bank-auto-insurance-all-purpose bailout fund, found that the White House auto industry task force and the Treasury Department “Auto Team” had no basis for ordering the expedited car dealership closure schedules. They relied on a single consulting firm’s internal report recommending that the U.S. companies adopt foreign auto industry models to increase profits — a recommendation hotly disputed by auto experts who questioned whether foreign practices could be applied to domestic American dealership networks.

Team Obama’s government auto mechanics also ignored the economic impact of rushing those closures. According to Barofsky, they discounted counter-testimony from industry officials that “closing dealerships in an environment already disrupted by the recession could result in an even greater crisis in sales.”

The inspector general also noted that “it is clear that tens of thousands of dealership jobs were immediately put in jeopardy as a result of the terminations by GM and Chrysler.” After extensive investigation, the watchdog concluded that “the acceleration of dealership closings was not done with any explicit cost savings to the manufacturers in mind.” Only after Capitol Hill critics — both Republican and Democrat — started questioning the Dealergate decisions did Obama’s auto “experts” come up with market studies and estimated job loss data to assess the impact of their reckless, arbitrary orders.

In sum, the inspector general found: “(A)t a time when the country was experiencing the worst economic downturn in generations and the government was asking its taxpayers to support a $787 billion stimulus package designed primarily to preserve jobs, Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses and thereby potentially adding tens of thousands of workers to the already lengthy unemployment rolls — all based on a theory and without sufficient consideration of the decisions’ broader economic impact.”

This is no surprise, of course, considering the amount of actual auto business expertise among Obama’s auto czars and key staff. That is: zero. Obama’s first auto czar, Steve Rattner, ran a private equity firm in New York before resigning his position amid a financial ethics cloud.

Rattner’s chief auto expert adviser, Brian Deese, is a 30-something former Hillary Clinton/Barack Obama campaign aide and law school grad with no business experience, who openly boasted that he “never set foot in an automotive assembly plant.”

And Rattner’s auto czar successor, Ron Bloom, is a far-left union lawyer who cut his teeth under Big Labor boss John Sweeney, has ideological ties to the corporate-hating Labor Zionist movement; and opined that “the blather about free trade, free-markets and the joys of competition is nothing but pabulum for the suckers.”


In search of the rationale for Team Obama’s bizarre, job-killing exercise of power over thousands of small car dealerships, the TARP inspector general may have stumbled onto the truth from Bloom. On page 33 of its report, Barofsky writes that “no one from Treasury, the manufacturers or from anywhere else indicated that implementing a smaller or more gradual dealership termination plan would have resulted in the cataclysmic scenario spelled out in Treasury’s response; indeed, when asked explicitly whether the Auto Team could have left the dealerships out of the restructurings, Mr. Bloom, the current head of the Auto Team, confirmed that the Auto Team ‘could have left any one component (of the restructuring plan) alone,’ but that doing so would have been inconsistent with the President’s mandate for ‘shared sacrifice.'”

“Social justice” chickens coming home to roost.


Yesterday: Why does Ken Salazar hate our economy?


Photoshop credit: George at Elegant Memories

Previous Dealergate coverage:

May 2009 – Dealergate and the MSM

May 2009 – Crunching the numbers: Dealergate & cronyism continued

June 2009 – Dealergate continued: More on Chrysler and Clinton cronyism

July 2009 – Democrats reverse Obama on auto dealerships

I agree with Tom Brown’s bottom line at Seeking Alpha:

“…the reason the auto companies were in trouble in the first place was that they’d been run into the ground by managements that had agreed to lavish their unionized workforces with uneconomic wage and benefit packages. The companies deserved to fail. (And remember that Ford, to its everlasting credit, has managed to survive without a federal lifeline.) Instead, GM and Chrysler are doomed to limp along as wards of the state, and will steadily hemorrhage jobs along the way. They’ll almost certainly end up as American versions of British-Leyland.If President Obama had really been interested in sustaining a prosperous auto industry that could create and sustain thousands of jobs, he would have allowed the companies to go through the normal bankruptcy process so that they could emerge with rational competitive labor-cost structures.”

(Republished from by permission of author or representative)
• Category: Ideology • Tags: Automakers, SEIU, Tim Geithner, Unions