Finally

Finally someone has put action behind the widely held belief (at least among those that are paying attention) that the Federal Government's 'bailout' of the auto industry is, shall we say, questionable.

Back in 2008 Congress passed the TARP bill. (I doubt the Constitution allows this - but the Constitution does not seem to matter anymore in this country). This authorized the government to spend up to $700 billion to purchased 'troubled' assets from FINANCIAL institutions. The common understanding of 'financial' institutions would NOT include, for instance, General Motors. Later, the House passed a bill (which the Senate rejected) a bill to authorize money to bail out the car companies.

So, this raises the obvious point: Since congress tried to specifically authorize an auto bail out - they knew it had not already done so under TARP.

John Spratt, Chair of the House Budget committee said back in April:

“I would think that for a government officer to extend a warranty that will create a liability for the government, an act of law would be required,”

The 'warranty' of which he speaks is the government backing the auto warranties of GM. It creates a liability for the government. This is something congress must authorize - it in NOT in the President's authority to do so on his own.

Fast forward to now. The State of Indiana is challenging the use of government funds on the Chrysler bailout on both legal and/or Constitutional grounds. Finally!! The State is representing the interests of a couple of State Employee pension funds that held stakes in Chrysler. These 'working families' have gotten hosed in the deal. The secured creditors (bond holders) were treated unfairly.

If this suit succeeds - and it SHOULD - what happens? Well, first the Chrysler bail out will be derailed. This is fine - bankruptcy court awaits.

The more interesting question is the already completed GM fiasco. It the suit succeeds, it will lead to the de-facto conclusion the The Messiah acted ILLEGALLY in the GM situation. He will essentially be found to have violated the LAW. No, we do not hold out much hope that this will matter. But, it certainly will shine the light more directly on the inappropriate nature of His Highness' actions.

This interference in private business must be stopped. I hope this suit is part of the weaponry to do so. If we don't stop this, the days of a booming private sector economy are numbered. We will start to look like England back before Margaret Thatcher righted their ship.