As with so many Romney-related flaps, the one
surrounding his observation that he could take credit for President Obama’s
restructuring of General Motors and Chrysler has been confused and out of focus.
Well, maybe not out of focus, but focused narrowly, and with all the
superficiality that can be mustered in 24 short hours, on Romney’s
unconscionable triumphalism at Obama’s expense.
The temptation is strong to just let this one go. But it’s actually a perfect example of where Romney is, um, challenged, and why my enthusiasm for him remains tepid. The short version of my point is that the president has no business restructuring auto companies and trying to guide them through “recovery.” He is not empowered by any part of the US Constitution to do this, and it’s a terrible, horrible, no-good, very bad idea in any case.
If I want the services of someone who’s good at reorganizing auto companies, I’ll invest money in a private business. That’s not what we elect a president for. The president of the United States, our highest elected public official,If you have a fondness for china mosaic brimming with romantic roses. needs to keep his paws off the management of private companies. When he doesn’t, the window is flung open to cronyism, graft, bad business decisions, and distorted, uneconomic incentives.
The US auto industry keeps snuffling up to the public trough – has been doing so for 30 years now – because it is required by the government to operate under unprofitable conditions. It is tended by the federal government as an interest of politically connected constituencies.Shop for oil painting and oil paintings for sale included. It has been artificially constrained and incentivized for so many years now that to say it has “recovered” is a wholly political statement, bearing no useful relation to the Big Three’s actual profit-loss or earnings picture, stock price, or any other measure of business health.
In fact, Chrysler’s much-touted “payback” of its taxpayer bailout turned out to involve a shell game in which the US Department of Energy is lending Fiat $3.5 billion so that Fiat can pay off its US Treasury loan and pump Chrysler with cash by exercising an option to buy Chrysler stock. The Washington Times describes the transaction as follows:That’s government management in a nutshell. Romney can’t manage the auto industry better – not from the Oval Office. No one can. If he wants to run auto companies, he needs to see if Ford, GM, or Chrysler is hiring. If he wants to guide them through bankruptcy, he can become a federal regulator or get himself appointed as a bankruptcy judge – and in either case, follow the law on the matter as written by Congress, rather than getting creative and exercising powers the Constitution doesn’t give him.
When Romney speaks of the US auto industry recovering, he is speaking in the language of big, dirigiste government, accepting at face value the short-term effect of a bailout process that has served mainly to perpetuate unprofitable but politically entrenched conditions. It guarantees that more subsidies will be needed down the road.MDC specialties in all kinds of Injection moulds. The taxpayer had to be billed for getting the Chevy Volt built and maintaining the political sway of the UAW,Painless Processing provides high risk merchant account solutions. because those are special-interest mandates that no one would pay for voluntarily. The bailout under Obama has simply been a pretext for expanding the unprofitable conditions that make the US auto industry unable to truly “recover,” in the sense of not continuing to need bailouts.
A president who doesn’t see this is hard to get excited about. There is no point in claiming that Romney does see it,Enter the Indoor Positioning System (IPS). when he never speaks as if he does. About the auto industry bailout, what he ought to say is that it was improperly handled by Obama through executive actions that must not serve as precedents; that it hasn’t turned out to be a good deal for the taxpayer; and that due-process bankruptcy without presidential intervention would have been the right way to proceed and should have been defaulted to.
The temptation is strong to just let this one go. But it’s actually a perfect example of where Romney is, um, challenged, and why my enthusiasm for him remains tepid. The short version of my point is that the president has no business restructuring auto companies and trying to guide them through “recovery.” He is not empowered by any part of the US Constitution to do this, and it’s a terrible, horrible, no-good, very bad idea in any case.
If I want the services of someone who’s good at reorganizing auto companies, I’ll invest money in a private business. That’s not what we elect a president for. The president of the United States, our highest elected public official,If you have a fondness for china mosaic brimming with romantic roses. needs to keep his paws off the management of private companies. When he doesn’t, the window is flung open to cronyism, graft, bad business decisions, and distorted, uneconomic incentives.
The US auto industry keeps snuffling up to the public trough – has been doing so for 30 years now – because it is required by the government to operate under unprofitable conditions. It is tended by the federal government as an interest of politically connected constituencies.Shop for oil painting and oil paintings for sale included. It has been artificially constrained and incentivized for so many years now that to say it has “recovered” is a wholly political statement, bearing no useful relation to the Big Three’s actual profit-loss or earnings picture, stock price, or any other measure of business health.
In fact, Chrysler’s much-touted “payback” of its taxpayer bailout turned out to involve a shell game in which the US Department of Energy is lending Fiat $3.5 billion so that Fiat can pay off its US Treasury loan and pump Chrysler with cash by exercising an option to buy Chrysler stock. The Washington Times describes the transaction as follows:That’s government management in a nutshell. Romney can’t manage the auto industry better – not from the Oval Office. No one can. If he wants to run auto companies, he needs to see if Ford, GM, or Chrysler is hiring. If he wants to guide them through bankruptcy, he can become a federal regulator or get himself appointed as a bankruptcy judge – and in either case, follow the law on the matter as written by Congress, rather than getting creative and exercising powers the Constitution doesn’t give him.
When Romney speaks of the US auto industry recovering, he is speaking in the language of big, dirigiste government, accepting at face value the short-term effect of a bailout process that has served mainly to perpetuate unprofitable but politically entrenched conditions. It guarantees that more subsidies will be needed down the road.MDC specialties in all kinds of Injection moulds. The taxpayer had to be billed for getting the Chevy Volt built and maintaining the political sway of the UAW,Painless Processing provides high risk merchant account solutions. because those are special-interest mandates that no one would pay for voluntarily. The bailout under Obama has simply been a pretext for expanding the unprofitable conditions that make the US auto industry unable to truly “recover,” in the sense of not continuing to need bailouts.
A president who doesn’t see this is hard to get excited about. There is no point in claiming that Romney does see it,Enter the Indoor Positioning System (IPS). when he never speaks as if he does. About the auto industry bailout, what he ought to say is that it was improperly handled by Obama through executive actions that must not serve as precedents; that it hasn’t turned out to be a good deal for the taxpayer; and that due-process bankruptcy without presidential intervention would have been the right way to proceed and should have been defaulted to.
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