Snafu in Chrysler Merger?

Today’s lead story in The New York Times is titled, “Supreme Court Moves to Delay Chrysler’s Sale.” It describes a stay issued by Judge Ruth Bader Ginsburg in response to a suit by Indiana State Funds and consumer groups.

According to the article, the impact of the stay is uncertain. On one end of the scale, it could be similar to the time when the court overthrew an attempt by President Truman to seize the steel mills during the Korean War. On the other hand, it could just be because the paperwork had to be reviewed, and there was insufficient time to do so.

While the administration and company executives are trying to minimize the impact of the stay, in my opinion, the effect could be much greater. It is uncertain whether President Obama may use stimulus money intended for financial institutions to prop up the automakers instead. Our system of checks and balances inevitably brings a branch that is accumulating too much power back into line, and that branch these days is the executive.

On the other hand, I find it disturbing that we can pour billions of dollars into the financial institutions and show such frugality regarding Detroit. One wonders whether the reasons concern the lobbying and campaign contributions of the former compared to the unionized nature of the latter.