Tuesday, May 26, 2009
Doug Ross compares the list of axed Chrysler dealers with their campaign contributions, and finds that virtually all of them had given money to Republicans or other Obama opponents -- Hillary, mostly -- in the last election cycle. The question is whether there was some sort of malice aforethought in this result, or if it is an artifact of the political proclivities of car dealers in general. We do not yet know whether the list of retained Chrysler dealers skewed left, or leftier, in its contributions. It would be, frankly, surprising, but if it did we would know that the fix were in. Somebody more enterprising than me needs to look at the political activities of the retained dealers and see if they are systematicaly different from those who were terminated. If reporters or bloggers do not get around to it, you can bet that the lawyers for the terminated dealers will, and they will have the subpoena power at their disposal. If there is anything there, it will come out eventually.
Maybe someday we'll emerge from this awful political phase. China is leading the way!
There were 15 dealerships on the list from Washington. I looked up the owner via opensecrets.org.
Just the facts, no conclusions drawn:
7 had no contributions.
4 contributed exclusively to Republicans, only one was a presidential candidate (Thompson)
2 contributed only to NADA
1 contributed exclusively to a Democrat
1 had contributions to both Democrats and Republicans (local)
Well, this would be an interesting study. Adjusting for factors such as volume, geography, proximity to other dealers (and perhaps other, confounding factors), I think we are looking at a difference between means test -- comparing termination rates among those dealers who made contributions to the Obama campaign and those who did not, and more specifically, comparing the rates at which non-Obama contributors were terminated with the incidence of non-Obama contributors on the list of dealerships that are to be kept. If (using stats speak) the null hypothesis is that it did not matter where political dollars flowed, and we reject that with 99% confidence, the lawyers will have a field day.
The primary confounding factor that will be hard to overcome (and many judges are not that statistically literate) is that while unions might skew Democratic, dealership owners likely skew Republican to begin with, as small busines owners.
The relatively short time between the bankruptcy filing of Chrysler LLC and the dealer termination announcement makes me guess that from a business standpoint, the list was studied and scrutinized, but not modeled in any kind of rigorous statistical fashion to D up against these kinds of charges. That said, Rahm is too politically smart (but maybe not Rattner) for there to be any kind of smoking gun email or letter saying, essentially, don't terminate these guys, they donated to us. If something like that were found, that would really change things for the Obama administration.
I would also be surprised if there is anything there, and even if there is, it would be laid off on overzealous members of the administration and not the POTUS himself.
Within a day or two we should have a good statistical examination of the numbers. I'm guessing they will come down to "If you are a Republican donor, you are X percent more likely to have been given the short straw", i.e. something on the order of 75% of Republican donors lost their dealerships vs 25% of Democrat donors. (numbers pulled from hat, actual numbers will vary)
And Escort is right on the money there, blame will flow up until it reaches a convenient bus-tire-tester and there it will stop.
What I can't understand is that these dealerships were independent businesses. If a dealership is not profitable, it goes bust -- independent of Chrysler. If a dealership is profitable, then how can it possibly benefit Chrysler to eliminate it -- and thereby lose further sales & market share?
(And yes, I know there is a lot of law & regulation around auto dealers. But the basic point is the decisions should be driven by economics, nothing else).