Latest on the automakers bailout: The left hand voteth to give, the right hand taketh back
Posted by sanityinjection on December 4, 2008
A few months ago I wrote about the dubious ethics kerfluffle surrounding Congressman Tom Coburn. Essentially, the Senate threatened to instigate ethics charges against Dr. Coburn if he, a practicing OB/GYN, delivered a baby. They argued that this would create a potential conflict of interest if Coburn had to vote on any matters that might financially affect the hospital he works for – even if he did the work pro bono.
Now, with Detroit automakers back in Congress begging, I mean testifying, at hearings regarding a possible second federal auto bailout (remember, the first was a $25 billion loan that slipped by when everyone was distracted by the larger financial crisis), CBS News reports that Congressman John Dingell’s wife is a GM executive, and the couple own substantial amounts of GM stock. So where are the ethics warriors swooping in to demand that Dingell divest or recuse himself, rather than vote for a law that would personally enrich him? Nowhere to be found. Why the double standard? It couldn’t be because Coburn is an archconservative Republican from Oklahoma and Dingell is a Democrat from Michigan….could it?
The article also points out that the very same automakers crying poverty spent over $50 million lobbying Congress this year, with hundreds of thousands of dollars finding their way to individual legislators’ campaign accounts. Do you really have to ask how Dingell and these others are going to vote on any measure to aid the automakers? In fairness, a legislator from Michigan might well have plenty of legitimate reasons to vote to prop up the auto industry. But sometimes the appearance of corruption is almost as damaging as the real thing. How are we, or Dingell’s constituents, supposed to judge whether he is acting based on sincere conviction, or because he has been bought and paid for?
On a related note, Bloomberg has a good piece up exploring the idea of a prepackaged bankruptcy for GM and Chrysler, in which settlements with most creditors are agreed to before bankruptcy is filed, simplifying the legal process and allowing the company to emerge from bankruptcy more quickly and without losing consumer confidence. A federal bailout package could be contingent on a “pre-pack” bankruptcy.
I’m no economist, but I am cautiously in favor of this idea – especially because the automakers and the United Auto Workers both oppose it, which means it’s probably fiscally sound.