the Treasury Dept. issued its response to a blistering Dec. 10 report from the congressional panel established to oversee the agency’s actions.The 13-page Treasury report broke no new ground, strongly echoing recent comments and testimony from Treasury Secretary Henry Paulson and Neel Kashkari, his deputy managing the crisis response. At the same time, it sidestepped some of the most pointed questions and observations raised by the Congressional Oversight Panel in its initial report. In that report, the COP criticized the Treasury for failing to monitor what the banks and others actually did with billions of dollars in federal funds they had received, and questioned whether the Treasury had an overarching strategy or could show concrete results.

In its response, the Treasury effectively responded that it knows what it’s doing, things could have been a lot worse, its efforts should improve matters in time, and the programs are working even if results are difficult to measure.

Unclear Answers

Throughout its report, the Treasury offers summary for explanation, recapitulating the events of late September and early October to account for its abrupt changes of course—injecting capital instead of buying toxic assets, then abandoning toxic-asset purchases altogether; ignoring the automakers only to aid them later—and describing why its programs ought to work instead of providing the evidence of results the COP members clearly sought. (Or most of them, anyway: The lone Republican on the panel at the time, Texas Representative Jeb Hensarling, declined to sign the report.)

The report also left unclear how aggressively the Treasury is seeking to determine how banks are using federal funds—a central criticism of both congressional leaders and the COP’s initial report. In Dec. 10 testimony before the House Financial Services Committee, Kashkari said his team was “working with the banking regulators to develop appropriate measurements” to track the flow of federal funds through financial institutions, “and we are focused on determining the extent to which the [federal investment] is having its desired effect.” No further detail emerged in the Treasury’s report Wednesday, which echoed Kashkari’s testimony in nearly identical language.

Central to many of the agency’s answers in the report—and echoing Paulson and Kashkari in recent weeks—is the argument that, without Treasury’s actions, worse could have happened: “The most important evidence that our strategy is working is that Treasury’s actions, in combination with other actions, stemmed a series of financial institution failures,” the report says. In other words, Treasury seems to be saying, Citigroup (C) teetered on the brink even after receiving an initial $25 billion capital infusion from the Treasury; but after a second bailout, it survived.

It is not all rose petals and honey cake anymore, as reality sets in.  On the eve of Detroit’s latest date with fate in Washington, the United Auto Workers have surrendered the union’s version of corporate jets.

The union is suspending its most ridiculed perk, called the JOBS bank. That program, set up as part of a contract agreement reached between Detroit’s Big Three and the union decades ago, pays auto workers 85% of their pay while furloughed. Some workers reported for years to meeting rooms where they would sit and wait for an assignment or be sent to clean public parks. All the while, they would get paid most of their wages.

The union also agreed to defer payments that the Big Three will make to a union-led health-care trust that is to take responsibility to pay medical benefits to auto workers starting in 2010.

The JOBS bank was costly in more ways than one for General Motors (GM), Ford (F), and Chrysler. By making labor a fixed cost, it altered their manufacturing strategy. For most of the past 10 years, the car companies preferred to discount models with big rebates rather than cut production, because they had to pay workers no matter what.

so long, entitlements

The provision also became an emblem of union abuse and what industry outsiders call Detroit’s entitlement culture. “The JOBS bank became a sound bite that people used to beat us up,” said UAW President Ron Gettelfinger. “It became a lightning rod.”

The JOBS bank has become less of a financial burden since the union has accepted tens of thousands of job cuts over the past two years, though. In 2006, GM had as many as 7,000 workers in the bank. Today, the three carmakers combined have just half that number awaiting a new assignment.

On Dec. 4, the CEOs of Detroit’s Big Three and Gettelfinger will take another stab at convincing Congress that the government should lend the automakers big bucks to stay afloat. Their request has climbed to $34 billion from $25 billion (BusinessWeek.com, 12/2/08) since last month’s hearings, when the CEOs were turned away after being lambasted for not adequately explaining how the money would make their companies competitive with Japanese rivals. They didn’t help their case by flying in on company planes. Members of Congress derided the auto execs for failing to display proper willingness to sacrifice. The UAW came in for criticism of its own, some of it focused on the JOBS bank.

This week baseball has magnified one of our favorite marketplace rules, the law of supply and demand, let’s take a look; Chicago Cubs fans arrived in Phoenix this week, drawn by significantly lower prices for tickets to the team’s first two playoff games against the Arizona Diamondbacks than they could find for tickets to games 3 and 4 back in the Windy City.

StubHub, the leading online ticket resale service, reports the average price of a ticket being sold on its site for games at Chase Field in Phoenix was $105. Some tickets sold for as little as $22. But back at on the Northside of Chicago at the friendly, but pricey confines of Wrigley Field, a larger fan base and more limited supply of tickets had driven the average resale price up to $334, with some tickets selling for as much as $2,177, and standing room tickets going for $100.

The difference made it worth it for Cubs fans to catch a plane rather than the Chicago L to a game, especially if they could cash in frequent flyer miles. So about 11.3 percent of the Arizona tickets being purchased on StubHub were going to Illinois buyers, while only 0.5 percent of the Wrigley tickets were being sold to fans from Arizona.

And while Cubs fans couldn’t be happy with the results of the games they saw in the Valley of the Sun, (the Cubs lost both games and are one game way from being eliminated in the series), this is the way that markets are supposed to work — willing sellers setting the price they want to attract willing buyers.

Some will look at the prices that World Series tickets are already going for on StubHub and cry that this makes it tough for the average fan to afford tickets. A pair of seats five rows behind the first base dugout at Wrigley for one World Series game have already sold for $6,000 each, already topping the highest price for a ticket sold on StubHub to last year’s World Series– $5,883 each for four seats in row B behind home plate for Game 3 in St. Louis.

And if the Cubs rally and somehow make it to the World Series, we are likely to see even higher prices. One seller is already listing a pair of tickets for $75,000 each. But the fans paying those insane prices would have found a ticket broker to buy from in the past. The fact that there are services like StubHub only increases the supply of tickets that can be sold on the secondary market, thus lowering the price.

If the Cubs meet the Boston Red Sox in the series this year, it might drive prices to unprecedented levels (though I have my doubts they’ll ever reach the $75,000 listing price of that one optimistic seller). Both teams have large fan bases, small stadiums and a history of postseason frustration that has created pent-up demand for a chance to see their team win the series. While the Red Sox won a championship in 2004, the Cubs haven’t been to the series since 1945 and haven’t won in nearly a century.

It also helps that this year, Major League Baseball and more and more states around the country are finally acknowledging that it is in everyone’s best interest to have a true transparent secondary market for ticket sales.

As recently as a year ago, teams such as the Yankees were going to war with their best customers, pulling renewal and postseason ticket rights from their season and partial-season ticket holders if they were caught reselling their tickets. Teams mistakenly believed that the secondary market was competition for their own ticket sales. But Bob Bowman, the CEO of MLB Advance Media, the arm of the sport that runs MLB.com, said most teams have come to the realization that the secondary market is a benefit, not a blow.

Bowman acknowledged that at least some of the credit for teams selling a record number of tickets again this year is due to the rapid growth of online ticket resales on StubHub and similar services.

So in August, MLB reached a ground-breaking sponsorship agreement with StubHub, which is a unit of eBay (Charts, Fortune 500). The full effect of the partnership will not begin until next year, but already in the last two months of the season, MLB.com started providing links to StubHub on team pages on the MLB.com as well as at individual team sites that fans go to when they’re looking to buy tickets.

Baseball ticket sales on StubHub soared, and the site is now on pace to sell 5 million tickets this year alone, after selling a total of 5 million tickets in its first six years of existence. The deal with baseball was beneficial enough to StubHub that it gave the sport something it never granted other teams or sports in its sponsorship deals — a cut of the 25 percent combined commission that StubHub gets from the buyer and seller when a ticket is sold.

In addition, New York this year joined states such as Florida and Illinois in dropping the so-called anti-scalping laws that attempted to prohibit the resale of tickets for more than a nominal increase over face value. The laws were among the most worthless on the books. If anything, they drove ticket prices higher by limiting supply as the laws made some potential sellers reluctant to put tickets up for sale. Numerous studies have shown ticket resale prices drop once anti-scalping laws disappear.

So even though few can afford to shell out $75,000 to root, root, root for their home (or road) team in the playoffs, having an open secondary market for ticket sales makes it less likely that anybody will ever have to pay such a high price in the first place. I guess tickets agents absorb a fair bit of risk, especially during the regular season, so it is ok to see them clean up in the home-stretch.