U.S. auto dealerships have a ridicously strong lobby. Note their recent ability to exclude themselves from oversight from the legislation to form the Consumer Financial Protection Agency. They clearly play a fiduciary role in putting consumers into billions of auto loans a year, and are not the consumer's friend. Their latest victories on legislation that would help reinstate dealerships cancelled by GM and Chrysler are mind-numbing. Both as to how the NADA can flex its muscle and retroactively undo bankruptcy law, and in that the Democracts are happy to comply.
It was odious, but perhaps necessary, to see the US Government wade in and save GM and Chrysler from failure. And this administration clearly got a bum rap inheriting this mess from the Republicans. But I bristled when the Republicans suggested that the Democrats were engaging in corporate welfare. I am of the view that the free market needs to be given as free of a leash as possible, and it was abundently clear that the legacy dealership network was a noose around the neck of the auto makers, and needed to be cleansed by the bankruptcy court process. The dealers had built such a powerful mousetrap, only bankruptcy court would allow the auto makers to shed themselves of the burden of inefficient and unnecessary dealers. That somehow the cancelled dealerships are able to revive themselves by pushing through legislation that retroactively gives them rights that survive bankruptcy seems outright nuts. Yet congress and Obama appear to be paying along.
The end result will be that dealerships that should have gotten cancelled will either a) get a large settlement check from GM/Chrysler (read taxpayers) or b) get reinstated (also read as government welfare). The counter arguments are that these dealerships provide jobs for the local community, etc. Perhaps GM and Chrysler were to big to fail from the impact that would have caused on jobs and the economy. But not these individual car dealerships. We're just helping individual owners with a powerful lobby retain their wealth.
For the life of me, I dont understand how this isn't a top headline on the Rachel Maddow show.
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