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Crony Capitalism at Work?

3:46 PM, Mar 12, 2014 • By GEOFFREY NORMAN
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Two car companies – Toyota and GM – some of whose vehicles are having engineering problems serious enough to be a safety risk and require massive recalls.  One is investigated by Congress and the National Highway Traffic Safety Administration while the other is not … until very recently, that is.  Toyota, the company that did face government investigation and sanctions is, of course, not even an “American” corporation. GM is. And was, for a time, a ward of the state.

So, could one suspect that GM was given a pass? As Liz Peek of the Fiscal Times writes:

Why would the Obama administration sanction such a tough crackdown on Toyota, while leaving GM in peace? Certainly, the White House wanted GM to succeed. Having handed out $86 billion in bailouts to GM, Chrysler and GMAC, Cash for Clunkers, the Warranty Commitment program, the Supplier Support program, $41.5 billion in TALF loans for auto finance companies, loans from the DOE for electric car development, Recovery Act funding for battery makers and research monies funneled though the Advanced Research Projects agency, the White House had gone all-in on the success of Detroit. 

Self interest is a powerful motivator and the political stakes must certainly have seemed high to the administration.  And, as Ms. Peek notes, the record is not encouraging.  

… after the IRS targeting of right-wing groups, the manipulation of jobs numbers by census workers, the misleading accounts of the Benghazi tragedy and the deceptive marketing of Obamacare ... Anything seems possible.

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