A Bailout Conflict of Interest?
Steven HorwitzHere's a thought: Is it a conflict of interest for the institution that is now the primary owner of General Motors to be the same institution that has the power to determine whether the automobiles of its competition are safe? When the Secretary of Transportation tells a House committee that owners of recalled Toyotas shouldn't be driving them and perhaps unnecessarily scares people off from buying them in the future, is there a conflict of interest due to the business that will likely send GM's way?Imagine a pre-bailout world where regulatory agencies were staffed only by owners of GM stock or members of their family. Wouldn't many on the left (and hopefully the right) see that as a brazen conflict of interest? Wouldn't they be up in arms about the abusive of corporate power that constituted? Wouldn't we be outraged if we found out that the referees for the Super Bowl had ownership shares in the Saints or the Colts? It just goes to show two things about the bailouts:1. They undermine the rule of law.2. They ultimately translate into a gain in corporate power rather than a way of reigning it in.In the meantime, the "owners" of GM can continue to punish their competition through the force of law. Is there anything more we need to declare corporatism triumphant?