General Motors Corp. will delay the closing of a Norton parts distribution center it planned to shutter by the end of the year, according to US Representative Barney Frank. The extension will temporarily preserve about 80 jobs.
The Norton warehouse is now expected stay open through July 2010, Frank said...
The plant manager received word yesterday that Frank had successfully lobbied GM chief executive Fritz Henderson to delay the closing...
Today the New York Times has a story on the growing number of lobbyists seeking an audience with the Federal Reserve, in an attempt to influence TALF purchases:
Executives and lobbyists now flock to the Fed, providing elaborate presentations on why their niche industry should be eligible for Fed financing or easier lending terms.
Hertz, the rental car company, enlisted Stuart E. Eizenstat, a top economic policy official under Presidents Bill Clinton and Jimmy Carter, to plead with both Fed and Treasury officials to relax the terms on refinancing rental car fleets.
Lawmakers from Indiana, home to dozens of recreational-vehicle manufacturers like Gulfstream and Jayco, have been pushing for similar help for the makers of campers, trailers and mobile homes.
And when recreational boat dealers and vacation time-share promoters complained that they had been shut out of the credit markets, Senator Mel Martinez, a Republican from Florida, weighed in on their behalf with the Treasury secretary, Timothy F. Geithner, who promised he would take up the matter with the Fed.
One shouldn't read too much into these examples. Even if the government had no role in the GM (GMGMQ.PK) bankruptcy, it's not difficult to imagine Barney Frank asking for and receiving a delay of the parts center's closing. Similarly, groups can lobby the Federal Reserve all they want, but that doesn't mean they'll get anything for their troubles. Ben Bernanke is no central banking naif; he understands the crucial importance of the Fed's reputation for independence.
Still, this makes for uncomfortable reading. This is also the kind of situation where a strong executive voice is required. If one or two interests receive a hearing and appear to get a response, then they benefit but the policy in question is not entirely discredited. If the lobbying effort becomes a free-for-all, then there will be popular rejection of the intervention (or of interventions generally) which could result in a pullback of government support that hurts everyone involved. Someone needs to step in and attempt to solve the collective action problem.
If the government can't manage to restrain itself in these cases, then the taste for economic interventions will sour, and fast.
This article previously appeared on The Economist.com