Chris Wallace “Interviews” Steven Rattner

Paul Roderick Gregory describes an imaginary interview by Chris Wallace of Steven Rattner on the auto bailouts.  Here’s the thing that Rattner never quite seems to address–even if it is believed that government direct lending was necessary to provide DIP financing (which I doubt, but will accept for the sake of argument) there is nothing in that narrow issue that implies that anything else that happened in the auto bailouts (scrambling priorities, giveaways to the UAW, and general politicization of the entire bankruptcy process) was essential or even useful.  Using the need for DIP financing as the tail to justify the entire mangy dog of how the auto bailouts actually proceeded is thus largely a smokescreen–none of the deviations from traditional bankruptcy processes did anything to further the long-term competitiveness of the companies out of bankruptcy.

I wrote more copiously about the auto bailouts here and here.