Everything Finance has been quiet for a while as the summer work gets done, but an interesting SIGTARP report just came out on the closure of auto dealers, link here. At the heart of the report is the question of whether Treasury (the auto team really, which includes White House economists and others) should have imposed the rapid closure of GM and Chrysler dealerships or accepted the companies’ plans for slower rollbacks. My first reaction is to disagree with a large amount of this report, but in completely inconsistent ways, so I post this really as food for thought. Should Treasury have been acting as an owner, maximizing viability and value, or as a government entity pursuing larger policy goals? Should it have been trying to maximize viability and value or get out as quickly as possible? Or another example, consider the reports call for the Treasury to monitor to ensure that the actions are carried out in “fair and transparent manner.” This seems potentially to conflict with both the maximization of shareholder (taxpayer) value and economic stabilization. But there may be some value for SIGTARP, meaning the necessity of monitoring the public bailout of a private company. Anyway, a report rich with the multifaceted issues of a the government running a private company temporarily to preserve jobs.
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