Academic

As the administration considers whether to use TARP money to bail out the automakers, what does the statute have to say? 

The Secretary is authorized to establish the Troubled Asset Relief Program (or ??TARP??) to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary

Since auto companies wouldn't appear to be financial institutions (indeed, GM has sold its financing arm to Cerberus), one might think this primary directive would be problematic.  However, the good news for the auto companies is that "financial institution" is defined with an out - and out that would seem to mean that the "financial" part of the term could be, for all intents and purposes, be dropped:

'The term ??financial institution?? means any institution, including, but not limited to, any bank.....[and other financial institutions incorporated in the US]

So there appears to be a textual basis that could be used to bring auto companies under the TARP.  Is it a good idea to do so?  We're just lawyers here at the Glom, so perhaps we will simply point you to some economists.  Richard Posner still thinks a bailout would be a good idea (or the best of a bad set of alternatives, anyway), while Gary Becker would prefer bankruptcy.

Both expressed some skepticism about executive compensation earlier this year, and many legal observers have wondered whether the exec comp rules in the TARP could possibly be enforced.  The WaPo weighs in today with a story about how - at least from a tax perspective - the equity injections mean that they cannot.

Perhaps true, but it's still the case that the Obama administration could pursue radically restrictive exec comp for the rest of the recipients of the bailout money ... though there may not be quite as much to give by January 20 as said administration probably hoped.