Obama’s first major scandal is brewing. Sorting out the rumors from the reality will take some time. Some folks believe that this is just one more “distraction” to keep Americans’ attention off Obama and onto manufactured outrage where others can be blamed when snafus occur. Whether real or manufactured, this particular situation will not turn out well for the administration.
From Fox News:
General Motors now is on the verge of bankruptcy after bondholders forced it Wednesday to withdraw a plan to swap bond debt for company stock. The government, which has already provided $19 billion in loans to GM, could take a 70 percent stake in the company.
Chrysler, which has received $5.8 billion in federal aid, disclosed in bankruptcy court this month its plan to close about a quarter of its 3,200 U.S. dealerships by June 9. Chrysler also plans to close eight manufacturing plants, part of its work to shed assets, debt and contracts and shift its good assets to Italian automaker Fiat.
The direction gone is far afield from the rosy scenario imagined by the president when he introduced his task force in February. Now, with two of the Big Three automakers on the brink of oblivion, lawmakers — including some who approved diverting funds from the Troubled Asset Relief Program for banks for use by GM and Chrysler — are starting to raise doubts about the overseers of the restructuring.
It turns out that the Auto Task Force appointed by Obama (I don’t know who actually chose the individuals in this “Task Force”) is made up of individuals from the field of finance, not the car industry:
“Who is this auto task force and who do they represent? They certainly don’t represent workers in America. They don’t represent investors, they don’t represent dealerships they represent various Wall Street interests,” said Rep. Dennis Kucinich, D-Ohio.
The combined total of auto industry experience the 24-member task force brings to the bailout negotiations equals zero, and some don’t drive at all, note critics.
“Of course we know that nobody on the task force has any experience in the auto business, and we heard at the hearing many of them don’t even own cars. And they’re dictating the auto industry for our future? What’s wrong with this picture?” asked Rep. Louie Gohmert, R-Texas.
Thirty-six members of Congress from both sides of the aisle told the White House last week they are troubled by the work of the Auto Task Force. The lawmakers’ concerns range from exploiting auto workers to laying off dealership employees.
“Decisions being made by the Auto Task Force and in the bankruptcy proceedings in New York are more than troubling,” the group, which includes Kucinich and Gohmert, wrote in a letter to Obama.
The lawmakers — wary of shuttered car dealerships, job losses and the big unknown of a GM bankruptcy — implored the Obama administration to slow down the restructuring process.
“Basically the task force is moving too quickly and there’s kind of a double standard,” a senior congressional aide told FOXNews.com. “We’ll do anything to bail out the banks, but we’re saying to the automobile industry you can fail. … The people who are on (the task force) are financial guys. These aren’t car guys.”
No, they’re not. And it appears that some of them have ties to Obama’s campaign fund-raisers.
No doubt there are plenty of others banging the drum on this story, but the detailed collecting of information being done by Jim at Gateway Pundit, by Doug Ross at Director Blue, and by World Net Daily are outstanding examples of websites that have done yeoman’s work on what has been dubbed – yeah, what else? – Dealergate.
Each of these websites have information on the questions being raised:
- which dealerships are being targeted for closing?
- who is actually making the choices for closures – Chrysler? The Task Force?
- are the closings based on party affiliations of the dealers?
- are closings based on campaign contributions (or lack thereof) by the dealers?
- is this another Chicago-type “pay-to-play” operation?
Read the stories on those websites. Look at the maps and lists. A lot of research has gone into making this story quite plain. We’ll see how long it takes for the MSM to pick up the ball.
Meanwhile, Doug Ross has this juicy bit (I haven’t supplied the links in the snip but you can follow them in his post):
White House car czar Steven Rattner is married to Maureen White, the former national finance chairman of the Democratic National Committee. And before Rattner became a major player on Wall Street, he was a New York Times reporter. Rattner is a key decision-maker on the Obama-slash-General-Motors-slash-Chrysler management team. And Rattner’s wife would presumably be an expert on political fundraising and could, if so inclined, advise her husband on who to protect and who to punish.
“Car czar” is a clever title for the head of this motley crew that comprises the Auto Task Force. But the sleazy connection here – the head of the Task Force being married to the big money raiser for the Democrats -belies the “ethics and transparency” our current President claimed for his administration. Google that quote and you can find his many broken promises.
Word that the Obama Administration may have used its power over Chrysler’s restructuring process to shut down dealerships whose owners donated to Republican candidates, while leaving open dealerships that donated to Obama is spreading across conservative blogs. But while this kind of abuse of government power is shocking, it really shouldn’t be.
Government is an engine of wealth redistribution, and when it gains control of businesses, it redistributes wealth in a way that benefits its supporters. That is what government always does, no matter how it disguises it.
That is why despite all the leftist wishful thinking in the world, centrally planned economies are corrupt, inept and inefficient.
Oh, but that’s just because no one has done it correctly yet. Obama thinks he’s going to show us how central management will cure all the ineptitude of individual choices. And we’d better learn to like it.
Mr. Greenfield continues:
No doubt there is a long list of industries that Obama will be happy to “bail out”, and by bail out, we mean of course spend billions in taxpayer owned debt to take over, carve up and hand out to their supporters.
The rape of the American auto industry by Obama and his henchmen was a classic case of a gang of politicians robbing the country blind in order to provide patronage to their backers, both at the union and the dealership level. But that is par for the course.
Obama promised to fix the capitalist arrogance of the free market with some wealth redistribution, which is a lot like a mugger telling you that he can cure your credit card debt by taking all your money. Now we’re seeing just how far that mugging went and how many victims it’s leaving behind. And we’re not done yet.
If the initial phase was the mugging, the next phase is that the beating the mugger dished out transmitted a disease which is now in the veins of his victim. When government takes control of an industry, it immediately promotes rent seeking behavior in order to increase its own wealth and power. This naturally drives up the cost of everything, produces inferior products and adds layers on bureaucracy on top of everything.
CAFE and a big package of regulations will insure that Chrysler and GM produce cars that meet the standards of the left, and that no one will actually want to buy or drive. The government naturally will buy the cars, both for itself, and subsidize their purchase for the “disadvantaged.” Sallie Mae and Freddie Mac will have an auto buddy who exists to insure the “right” of everyone to own a car, with loans to people who can’t pay them, for cars they can’t afford.
If Obama gets his way, the US auto industry will wind up looking like its Soviet counterpart, a government subsidized white elephant that will benefit no one but politicians and their supporters. And it will once again serve as a textbook example of what’s wrong with wealth redistribution, and how absolute government power over the free market, corrupts it absolutely into patronage.
Patronage. Now there is a concept that Obama understands thoroughly. And he plans to teach the rest of us, whether we want to learn or not.
After all, it’s his game. He won.
Hat tip for nudging me on this story: no2liberals