Tag: car czar

Glory-of-Government Religiosity Finds Bailout Skeptics “Willfully Stupid”

When you believe in things that you don’t understand,
Then you suffer,
Superstition ain’t the way

- Stevie Wonder

David Ignatius is entitled to this opinion:

We have just lived through one of the more notable successes of government intervention in modern times – the auto and bank rescues that almost surely saved the country from another Great Depression.

But if his intention is to convince skeptics—and not just to rally the deflated spirits of those who came to Washington with high hopes of teaching Americans how to love their government—he does a lousy job.  A bold assertion like his requires supporting evidence more rigorous than hearsay, superstition, and the opinions of his friend, and former “Car Czar,”  Steven Rattner.

Ignatius considers the bailouts successful because GM is still in business and the banking sector didn’t collapse.  According to Ignatius (often channeling Rattner):

Private companies made bad decisions that put the U.S. economy at risk; government made good (if politically unpopular) decisions to keep these mismanaged companies afloat, fearing that a collapse would mean much worse trouble…Private actors made bad decisions, but public officials generally made good ones…Washington is such an easy target that we forget the real villains of this story are the bankers and auto executives who steered their companies toward disaster.

Well.

Where is the credible evidence that without the interventions we were headed for another Great Depression?  Where is support for the argument that it’s smart to keep “mismanaged companies afloat”?  Where are the convincing facts (not the figures produced by the Big Three’s PR machine in November 2008) that the auto industry would have shed 2 to 3 million jobs had the government not intervened to save GM and Chrysler on the administration’s terms?  Where are the soothing facts that the incentives to avoid failure in the banking and auto sectors have not been weakened by the interventions?  Where is the compelling defense against the charge that government policies that subsidized chosen firms in the mortgage industry created the incentives for risk-taking—that Ignatius pegs as the root cause of the problem—in the first place?

Apparently, Ignatius doesn’t swell with desire for limited constitutional government. He writes, “It’s one thing to denounce government when it fails to achieve its goals.  But to ignore government’s achievements in times of crisis is willfully stupid.”

It’s clear that Ignatius column is more of an ideologically-driven rant doubling as a pitch for Rattner’s new book about the heroic role of the Auto Task Force in saving the auto industry.   As I wrote a few months ago in response to Rattner’s chest-puffing:

Rattner’s verdict rests on the singular consideration that “a year after the government-sponsored bankruptcies of GM and Chrysler, both patients are alive and progressing well toward recovery.” But that’s like hailing the stable medical condition of a drunk driver after an accident, while ignoring the injuries to the family in the vehicle he struck.

The impact of the auto intervention on its victims doesn’t factor into Rattner’s analysis.

Rattner’s claim of auto “rescue” success is the product of a straw-man set-up. The most compelling objections to the bailout were not rooted in the belief that the government couldn’t use its assumed power to help GM and Chrysler.  On the contrary, the most compelling objections were over concerns that the government would do just that.  It is the consequences of that intervention—the undermining of the rule of law, the confiscations, the politically-driven decisions, and the distortion of market signals—that animated the most serious objections.

Thus, any verdict on the outcome of the auto industry intervention must take into account, among other things, the billions of dollars in property confiscated from the auto companies’ debt-holders; the higher risk premium built into U.S. corporate debt, as a result; the costs of denying Ford and the other more successful auto producers the spoils of competition (including additional market share and access to the resources misallocated at GM and Chrysler); the costs of rewarding irresponsible actors, like the United Autoworkers union, by insulating them from the outcomes of what should have been an apolitical bankruptcy proceeding; the effects of GM’s nationalization on production, investment, and public policy decisions; the diminution of U.S. moral authority to counsel foreign governments against market interventions that can adversely affect U.S. businesses competing abroad, and; the corrosive impact on America’s institutions of the illegal diversion of TARP funds under two presidential administrations.

It is willfully deceptive to direct the public’s attention away from these less discernible, but very consquential costs of the bailout.

Kaiser vs. “Czar”

kaiser-billJust when you thought you’d seen everything, ol’ Kaiser Bill emerges from the Beyond to castigate the U.S. president:

Mr. President,

Gott im Himmel! Enough with the czars!

You’ve named 18 so far, according to something I read in Foreign Policy. That includes a border czar, a climate czar, an information technology czar and – I don’t think Thomas Jefferson grew enough hemp in his lifetime to dream up this one – the “faith-based czar.” Your car czar, Steve Rattner, was in the news last week, trying to keep Chrysler out of bankruptcy.

It took Russia 281 years to accumulate that many czars. Even with hemophilia, repeated assassinations and a level of inbreeding that would gag a Dalmatian breeder. You did it in less than 100 days.

And every one of them hurts. I think I speak for all passed-over Victorian despots when I say that.

[…]

…maybe it’s time for a new autocrat to get some air time. Time for something that will stand out even in a White House with a czar in every cubicle.

President Obama’s archduke of information technology announced today … Pricks up the ears, doesn’t it?

In Detroit, the president’s car sultan … Instant respect. Mainly because those who defy the car sultan might be killed by eunuch assassins.

Or might I humbly suggest the title of an enlightened ruler who – unlike the czars – actually worked well with parliament and the nobility (in your terms, that would be “Congress” and “Oprah”). Somebody whose record is nearly unblemished, except for one invasion of Belgium that everybody’s totally over now.

Today, President Obama congratulated his new climate kaiser

Goosebumps.

Yours in friendship, Wilhelm II