Last year, while the Obama administration seized two of the nation’s three main domestic auto manufacturers, it also shut down thousands of dealerships across the country, supposedly to stabilize GM and Chrysler. A new report from Neil Barofsky, the Inspector General of the TARP program, calls into question that decision. In a sharp rebuke to the White House, Barofsky says that the action needlessly cost tens of thousands of jobs and extended an already-disastrous downturn in employment:

President Obama’s auto task force pressed General Motors and Chrysler to close scores of dealerships without adequately considering the jobs that would be lost or having a firm idea of the cost savings that would be achieved, an audit of the process has concluded. The report by Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program of the Treasury Department, said both carmakers needed to shut down some underperforming dealerships. But it questioned whether the cuts should have been made so quickly, particularly during a recession. The report, released on Sunday, estimated that tens of thousands of jobs were lost as a result. “It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,” the report said.

Mark Tapscott says that Rep. Darrell Issa (R-CA) and his consistent criticism of the dealer closings has been vindicated:

Issa, who has been a vocal critic of the Obama administration’s handling of the GM and Chrysler government takeovers, said the SIGTARP report should “serve as a wake-up call as to the implications of politically-orchestrated bailouts and how putting decisions about private enterprise in the hands of political appointees and bureaucrats can lead to costly and unintended consequences.” The California Republican also said the fothcoming report will say “GM did not consistently follow its stated criteria and that there was little or no documentation of the decision-making process to terminate or retain dealerships with similar profiles, or of the appeals process” and that “making termination decisions with little or no transparency and making a review of many of these decisions impossible…”

This doesn’t come as any great shock. Barack Obama put Steve Rattner in charge of running his auto bailout program, a man who had just as much experience in the auto industry as Obama did: he drove a few cars. Rattner had to make a quick exit after just a few months when it became known that he was the target of a federal probe into questionable activities regarding the New York pension fund — and his replacement had just as much experience in the auto industry as Rattner did.

What was the main entry on Ron Bloom’s resume? He was a union negotiator.

Let’s keep this in mind when Democrats insist that government can run industries better than the markets themselves. Not only did the White House purposely evade bankruptcy laws in cutting sweet deals for unions during the bailout, but they also destroyed jobs in the process out of incompetency. I’d bet that a number of union members are none too pleased with that outcome, even if the union bosses are.

Update: Congressional candidate Sean Mahoney has been pushing on this topic for a while.