Congress and the auto dealers

No real surprise here:

General Motors may have emerged from bankruptcy-court protection, but its headaches are far from over.

Next up, its dealers. Or should we say its soon-to-be-former dealers.

More than a hundred dealers from that category are to gather on Capitol Hill today, pushing Congress to pass the Automobile Dealer Economic Rights Restoration Act, which was spurred by the plans of GM and Chrysler to close more than a combined 3,300 of their dealers. ...

“All we ask for is to run our business. If we fail, we fail because of our poor business performance. But we refuse to be forcefully closed down,” said Jack Fitzgerald, one of the initiators of the bill and a longtime auto dealer in Maryland. “Letting the market decide is a simple solution to this complex problem and the reason why the bill is getting massive support.”

It will be interesting to see how that argument plays out amid concerns about the federal government’s role in the new GM. An early indication might have come in a House Appropriation Committee vote last week, 60-0, to approve an amendment to the appropriation bill funding the White House and the Treasury Department. That amendment asked for restoration of the dealers’ economic rights prior to GM’s bankruptcy filing. “Even if it were necessary for auto makers to shrink their dealer body to be financially healthier, they need to choose carefully who to close down because tens of thousands jobs will be lost because of that,” says Rep. Roscoe Bartlett, a co-sponsor of the dealers bill in the House.

This is the problem with the government owning new GM--it's 99.99% certain that the government will not let GM make economically rational decisions that negatively impact politically powerful constituencies. Once that dam breaks, moreover, it will be harder and harder to prevent future political interference. If this bill passes, for example, it becomes all the more likely that Congress will interfere with GM plans to shutter factories. Likewise, we can expect Congress to do things like objecting to Bob Lutz's plan to keep importing the Australian-built Pontiac G8, rebadged as a Chevy Caprice. Congress will want jobs in the US, not the USA Australia.

Comments

[Robert]

Private business is interested in creating profits.

Congress is interested in creating jobs.

Simple as that.....

[Daniel]

"Letting the market decide is a simple solution to this complex problem". Duh, and the market decided. Why do you think GM went bankrupt?

[LogicalSC]

Congress is interested in creating jobs.

Incorrect...Congress is interested in paying back supporters with YOUR money. It has nothing to do with jobs.

[J. Galt]

Chris Dodd...resign NOW

For covering for accounting fraud at Fannie and Freddie...resign NOW
For lying about your involvement w/ AIG bonuses...resign NOW
For being a "Friend of Angelo"...resign NOW
For your pay for play Irish cottage...resign NOW

Enough corruption in DC...resign NOW

[Chester White]

"Congress is interested in creating jobs."

No, Congress is interested in SAYING it's creating jobs.

Learn this well, America: Government does not create jobs. Any jobs apparently created by government spending are more than lost in the private sector because of the taxes (or borrowed money) necessary to "create" the job.

Always.

I have been waiting 30 years for a leading Republican to say this, and none ever has.

[tyree]

And profits, as we know, create jobs.

[MarkJ]

Politicians interfering with business decisions made by a company they own that's trying to sell rotten cars to a public that won't buy them.

Hey, what could go wrong?

[IdaWizard]

Robert, Congress is NOT interested in creating jobs. Congress is interested in the APPEARANCE of being interested in creating jobs.

If congress were truly interested in job creation they would quit penalizing the companies that actually hire people through oppressive payroll taxes, onerous regulations, and rediculous busy-work reporting schemes.

[Fred]

Congress is interested in power and spending money, that they forget comes from my pocket and yours. Simple as that.

[Wildmonk]

Ummm, Robert. If GM cannot make enough money to *pay* for the jobs then why should taxpayers have to pay for them? Seriously, why should I (or any other taxpayer) pay their salaries when they build cars that I don't want? Isn't this the *essence* of corruption: citizens being fleeced by a third party just because they have political connections?

This isn't a hard problem but it does require that you learn to think in more than slogans.

[Blogdog]

If Congress were interested in creating jobs, it would lower both the minimum wage and business tax rates. Congress is only interested in appearing to save jobs that are look to be lost. That way every worker who is led to believe his or her job is due to Congress will vote for the incumbent. For the other poor saps, congress will extend unemployment benefits ad infinitum.

[Les Nessman]

If you're buying new, buy Ford.

[mistress overdone]

if one is concerned about corruption then one should be concerned about the separation of business and state. when government interferes with the private sector then the private sector ceases to respond to normal market forces. we saw the result of this with fannie mae and freddie mac; both became entities that politicized mortgage lending practices, and that ended up adversely impacting all of us.

the gov doesn't create jobs; the private sector creates jobs. let's keep it that way. let's keep business and government separate. if we do not, then we shall see more fannies and freddies.

[Bobby_B]

Private business exists to create profits.

Long-term and stable jobs exist only to the extent that they help foster this creation.

Most Congressbots know and understand this relationship deep in their informed-intellect brain centers, but all thought must travel from those deep centers out through the partisanship-and-re-election post-processing sites, where their intense need to vilify and debase the crass, unconcerned, neanderthalic business class causes that knowledge to be suppressed.

Congress cannot accept that any group other than Congress should be - can be - making long-term policy decisions that guide and affect our society. Such thought will only lead to a lessening of the power of Congress, ceding that power to people who don't even care that a ditch-digger makes less money than an engineer.

[Steve]

Congress and the Administration are interested in creating jobs...for their friends and punishing their enemies.

There, finished that for you Robert.

[Karl Marx's disappointed mother]

There are no jobs without profits. That is economics 101.

Congress cannot create a single job without destroying two more in the process and they can only do even that much through the threat of violence and the application of force. That is the very essence of government as it was understood by our founding fathers.

It says all one needs to know about the quality of education in this country that such obvious facts have to be pointed out to adults.

[Bobby_B]

"let's keep business and government separate. if we do not, then we shall see more fannies . . . "
- - - - -

I was right there with you, but then this last left me strangely conflicted.

[highsheriff]

It will be interesting to see how the Government penalizes Ford for not taking bailout money

[Robin]

This is interesting because every time government provides a new program, it forces businesses in the private sector to close. Just this week, a pre-school in my town that has been operating for over 15 years had to close their doors because universal pre-K had undermined their business to the point that they couldn't compete. That's two jobs, plus an alternative for parents who don't want their kids in pre-school 5 days a week, merely a day or two, gone.

The more government gets involved in an industry the less choices the consumer has, we should remember this when discussing health insurance.