Sunday, July 18, 2010


One reason I don't like government dictating business policy- It makes mistakes.

Sure, business owners make mistakes too, but when it happens, it's on them. Nowhere to point the finger but at themselves. How about the auto dealerships that were hastily closed in trade for bailouts of the parent corporations? From CNN:
"Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses ... potentially adding tens of thousands of workers to the already lengthy unemployment rolls," said the report, released by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Neil Barofsky.

GM and Chrysler were both required to submit restructuring plans to the Treasury's Auto Team in February of 2009, but the plans were rejected because Treasury deemed that the car makers weren't moving to close dealerships at a rate fast enough to keep their businesses viable.

So the auto manufacturers accelerated the process, with the help of bankruptcy laws that let them cancel dealer contracts. Chrysler terminated 789 dealerships last summer and General Motors announced plans to wind down 1,454 dealerships by October of 2010.

I'm all about the austerity and cost savings, wherever they may be found. Were the dealerships losing money?
Dealerships weren't axed to save money: The audit also found that dealerships weren't axed for the sake of saving money but for "far more amorphous reasons."

"Key members of [Treasury's] Auto Team stated ... that they did not consider cost savings to be a factor in determining the need for dealership closures," the report said.

It would be interesting to learn what those 'amorphous reasons' were. I don't like an amorphous government. It just doesn't breed confidence.

Sure, the automakers made the deal with the devil, and had to take Treasury's terms to get the money. But actions should have some reasons underpinning them.

If the government is acting to save jobs, this was a complete idiot's way of doing it.

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