Morning Bell: Car Salesman in Chief

Conn Carroll / March 31, 2009

On April 8, 1952, President Harry Truman ordered Commerce Secretary Charles Sawyer to seize and take over operation of most of the country’s steel mills. Truman cited no legislative authority for his actions. Instead, he cited the Korean War. Truman claimed there was a national emergency and his presidential war powers were all the authority he needed to nationalize the steel industry. The steel companies fought back, and in the landmark case Youngstown Sheet & Tube Co. v. Sawyer the Supreme Court found Truman’s actions to be unconstitutional.

Justifying President Barack Obama’s unprecedented control over the U.S auto industry, an administration official told Politico: “We’re in an economic crisis, which takes shared responsibility and shared sacrifice. The only way that we will recover is if everybody puts a little skin in the game.” Unlike Truman, Obama actually has some legislative authority to hang his nationalization hat on: the Emergency Economic Stabilization Act of 2008, which created the Troubled Asset Relief Program (TARP) funds that Obama is using to control General Motors and Chrysler. But, as we argued at the time, the broad delegation of powers in the bill makes it constitutionally suspect. Did any member of Congress voting for EESA really even contemplate that the bill would lead to a President of the United States saying this:

In this context, my administration will offer General Motors adequate working capital over the next 60 days. During this time, my team will be working closely with GM to produce a better business plan. … I am confident that if we are each willing to do our part, then this restructuring, as painful as it will be in the short-term, will mark not an end, but a new beginning for a great American industry; an auto industry that is once more out-competing the world; a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us toward an energy independent future.

As great of a lawyer, community activist, and law professor as President Obama may have been, when has he ever run any company or come up with a single business plan. Now he’s running General Motors? But Obama didn’t stop at auto company CEO: (more…)