Detroit — While Toyota’s recall woes have given Detroit an opening to gain market share, their new federal owners are proving to be a drag on GM and Chrysler as they race to become more competitive.

The two companies tried to use bankruptcy last year to streamline their notoriously bloated dealer networks, but they have run into a Congressional thicket of dealer-owned pols. Numerous dealer closings have been reversed and in December President Obama signed off on a bill requiring dealer arbitration which has further complicated the Detroit firms’ task.

A marvelous exchange between Rep. Frank Pallone (D., N.J.) and populist Fox New anchorwoman Julie Banderas demonstrated the difficulties of having Washington under your hood.

Banderas teed up the automakers for Pallone Sunday with a diatribe against market economics. Dealer consolidation, she concluded, would “be stealing from one and giving to another.”

Pallone readily agreed, showcasing Washington economic theory that companies should exist as job agencies, not profit-making enterprises.

We will “monitor and do more,” said Pallone. “We bailed them out so we will have to get more involved.” Not good news for shareholders (or other taxpayers).