Bailout Watch 394: Obama Embraces Complexity, Drops Czar For Committee

Barack Obama’s plan to appoint a “car czar” to oversee the auto industry bailout has been shelved, reports the New York Times. Rather than appoint a single individual (presumably of Romanov extraction) to administer the government handout, the President has ordered Treasury Secretary Timothy Geithner and chairman of the National Economic Council, Lawrence Summers, to lead a “Presidential Panel on the Auto Industry.” Or Presidential Auto Task Force. Or Presidential Task Force on Autos. Or something. Either way, it’s time to start spreading the inevitable blame around. After all, GM’s top dogs have evaded responsibility for decades of disaster by embracing complexity. And it’s just so much harder to burn a committee in effigy.

According to the Times, Geithner (officially, Obama’s “designee”) and Summers will be joined by labor union advisor Ron Bloom, as well as officials from the departments of Treasury, Labor, Transportation, Commerce, and Energy; the National Economic Council; the White House Office of Energy and Environment; the Council of Economic Advisers; and the Environmental Protection Agency. Bloom, an advisor to steel and airline industry unions will work as a senior advisor to the Treasury on the auto crisis.

And what of Messrs Rattner and Girsky? MIA for now, says the Times. Needless to say, we’re dying to know what role conflicts of interest played in keeping Rattner away from the party. And if Bloom is the new Girsky.

Inside baseball aside though, things are pretty much chugging along as usual. Obama won’t give out his plan until he hears Detroit’s plans, and Detroit can’t make plans until they swap debt for equity which bondholders won’t do until the UAW makes further concessions, which the UAW won’t do until debtholders take a bigger haircut, and on and on.

Sure, a single Czar might have had the power and leadership to take hold of Detroit and shake it till it stops chasing its tail. But he might have also triggered default clauses for Detroit’s credit-default swaps.

Ultimately though, the buck has to stop somewhere. Geithner and Summers are no more likely to resign over a bungled Detroit bailout than Obama. And committees are rarely more strict than an individual who knows that their reputation is at stake. But apparently convoluted businesses need convoluted rescue parties.