Dealergate: Destroying Jobs In The Name Of “Shared Sacrifice”

Michelle Malkin
July 20, 2010, 9:00 am

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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." [SIG
TARP Report,

PDF]

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 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.`"