Anti-Industrial Policy

H.R. 2743, the Automobile Dealer Economic Rights Restoration Act of 2009, has 230 co-sponsors. The CRS summary:

 Prohibits an automobile manufacturer (manufacturer) in which the federal government has an ownership interest, or which receives loans from the federal government, from depriving an automobile dealer (dealer) of its economic rights. Requires the manufacturer to honor those rights as they existed for Chrysler LLC and General Motors Corporation dealers prior to the commencement of the bankruptcy cases of each corporation, including dealer rights to recourse under state law.

Requires the appropriate manufacturer to restore the franchise agreement between the dealers and Chrysler LLC or General Motors that was in effect prior to the commencement of their respective bankruptcy cases, and to take assignment of such agreements.

One of the companies' problems is an antiquated dealer network, long protected by state laws, that siphons money from both consumers and manufacturers.

The information revolution, the Internet, and the rise of overnight delivery have created a desperate need to re-structure, something that would readily occur by private contract absent the meddling of governments. So Congress is announcing that wherever the power of the Federal Government extends, no such industrial restructuring will occur.

Perhaps Congress did not read GE CEO Jeff Immelt's column yesterday on the importance of our industrial base. It certainly has not read my piece on the coming crack-up of the Special Interest State.