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When it comes to the many judgments cast on U.S. auto executives, there is none harsher than the White House's de facto assessment yesterday that these guys are actually dumber than bankers.
That's cold, but also the essential truth of the matter, assuming that a "Democratic official close to the White House" was dishing the real skinny when he told the Politico: "[The administration has] more confidence in the leadership on the banking side -- that there are people in place who understand what went wrong and the steps necessary to deal with this disaster. They have no sense of confidence that the auto industry has the capacity or plans to structure a workout."
This was merely the first reason among five, according to the online paper, that "the car companies got hit with the stick" and denied another immediate carrot. In brief, populist outrage -- an overworked phenomenon we should all hope is furloughed soon -- over bailouts and bonuses may have provided Obama convenient political cover from the ire of union sympathizers on the left and economic nationalists on the right, but of much weightier concern was that, simply, of a non-ideological fix -- from business as usual to just business, for a change.
"The prevailing mindset inside the White House," wrote the Politico in what I found to be the most helpfully comprehensive report on events of the past 48 hours, "is that both [GM and Chrysler] had a more than fair chance to prove they could present a realistic plan for survival. They didn’t come close."
And here was a shocker, embedded within the second reason provided for the administration's stick-over-carrot approach: "A White House spokesperson confirmed to Politico that the federal government’s loans to GM and Chrysler have no special priority in the bankruptcy process," which means taxpayers could be standing in a very long line for even partial recovery.
Oops. But wait, why my sensation of shock? That shouldn't be. After all, it was the criminally inept Bush regime that packaged the loans.
Reason Three: A supremely delicate calculation by Obama. He's "convinced that if AIG or some of the big banks collapsed, the economy could go down with them. That’s not the case with Chrysler, for sure, and probably GM, too." As one anonymous official explained, "There’s a feeling that the failure of these two autos is already priced into the market but that really shaking up the banks could be catastrophically risky."
Which reminded me of something I read years ago, in Bob Woodward, I think it was, on the earliest agonies of the Clinton administration. Trapped between its political aspirations and the demands of Wall Street, the White House in '93 caved to the latter; after a savage internal debate between its neoliberals and more traditional progressives, the administration decided it simply couldn't afford to risk a financial meltdown, so it pulled up on the reins.
Stick-over-carrot Reason Four was arrestingly blunt: "The bottom line for Obama -- and the auto industry -- is many people don’t want American-made cars." To wit, an auto-industry analyst appeared on "PBS Newshour" last night and offered this startling fact: 2005 was a boffo year for auto sales, yet GM somehow managed to lose more than $10 billion in the bonanza's midst.
Still, the utter lack of a domestic auto industry is unthinkable, hence the first-quoted Democratic official said that "for all the negative aspects of structured bankruptcy," the industry "will continue to exist in some form." The politics of Obama's inherited mess in the auto business alone -- which a White House adviser labeled "brutal" -- dictate that.
But the politics of it -- Reason Five -- could also dictate what some on the left would deny at their own risk: that populist outrage can and ordinarily does contribute to unintended, undesirable consequences (undesirable, that is, from the left's point of view).
"[Obama] was caught flat-footed by the AIG bonus uproar," the Politico observed, "but since then ... the White House [has] used a well-choreographed rollout to dominate the news-cycle ... with his tough love approach -- and present Obama as a fair-minded centrist when it comes to bailouts."
A White House adviser warned that "Taxpayers are already in revolt over spending all this [bailout] money."
And this is my express warning, not his: That revolt could easily convert to one over spending money, period -- and that means goodbye universal health care, goodbye educational improvements, goodbye federal investments in renewable energy.
It's clichéish as hell, but hellishly appropriate: Progressives of the populist variety are playing with fire.
AGREED!
That's cold, but also the essential truth of the matter, assuming that a "Democratic official close to the White House" was dishing the real skinny when he told the Politico: "[The administration has] more confidence in the leadership on the banking side -- that there are people in place who understand what went wrong and the steps necessary to deal with this disaster. They have no sense of confidence that the auto industry has the capacity or plans to structure a workout."
This was merely the first reason among five, according to the online paper, that "the car companies got hit with the stick" and denied another immediate carrot. In brief, populist outrage -- an overworked phenomenon we should all hope is furloughed soon -- over bailouts and bonuses may have provided Obama convenient political cover from the ire of union sympathizers on the left and economic nationalists on the right, but of much weightier concern was that, simply, of a non-ideological fix -- from business as usual to just business, for a change.
"The prevailing mindset inside the White House," wrote the Politico in what I found to be the most helpfully comprehensive report on events of the past 48 hours, "is that both [GM and Chrysler] had a more than fair chance to prove they could present a realistic plan for survival. They didn’t come close."
And here was a shocker, embedded within the second reason provided for the administration's stick-over-carrot approach: "A White House spokesperson confirmed to Politico that the federal government’s loans to GM and Chrysler have no special priority in the bankruptcy process," which means taxpayers could be standing in a very long line for even partial recovery.
Oops. But wait, why my sensation of shock? That shouldn't be. After all, it was the criminally inept Bush regime that packaged the loans.
Reason Three: A supremely delicate calculation by Obama. He's "convinced that if AIG or some of the big banks collapsed, the economy could go down with them. That’s not the case with Chrysler, for sure, and probably GM, too." As one anonymous official explained, "There’s a feeling that the failure of these two autos is already priced into the market but that really shaking up the banks could be catastrophically risky."
Which reminded me of something I read years ago, in Bob Woodward, I think it was, on the earliest agonies of the Clinton administration. Trapped between its political aspirations and the demands of Wall Street, the White House in '93 caved to the latter; after a savage internal debate between its neoliberals and more traditional progressives, the administration decided it simply couldn't afford to risk a financial meltdown, so it pulled up on the reins.
As one participant among the progressive camp later observed -- and I'm just paraphrasing from shaky memory here -- If I come back in a second life, I want to come back as the bond market. Because it is that which has presidents by the short ones, and Clinton knew it.
After this immediate crisis, Obama's ultimate challenge lies in busting up such a powerful financial oligarchy -- one now more concentrated than ever, with the absorption or extermination of Lehman, Bear Stearns and Merrill Lynch. Otherwise we'll be right back where we started. Reagan got its worst manifestations rolling, Clinton facilitated them without later reforms, and God knows Bush II removed all restraints. Yet right now, this moment, is hardly the time to be setting off explosives on an already leaky ship. Stick-over-carrot Reason Four was arrestingly blunt: "The bottom line for Obama -- and the auto industry -- is many people don’t want American-made cars." To wit, an auto-industry analyst appeared on "PBS Newshour" last night and offered this startling fact: 2005 was a boffo year for auto sales, yet GM somehow managed to lose more than $10 billion in the bonanza's midst.
Still, the utter lack of a domestic auto industry is unthinkable, hence the first-quoted Democratic official said that "for all the negative aspects of structured bankruptcy," the industry "will continue to exist in some form." The politics of Obama's inherited mess in the auto business alone -- which a White House adviser labeled "brutal" -- dictate that.
But the politics of it -- Reason Five -- could also dictate what some on the left would deny at their own risk: that populist outrage can and ordinarily does contribute to unintended, undesirable consequences (undesirable, that is, from the left's point of view).
"[Obama] was caught flat-footed by the AIG bonus uproar," the Politico observed, "but since then ... the White House [has] used a well-choreographed rollout to dominate the news-cycle ... with his tough love approach -- and present Obama as a fair-minded centrist when it comes to bailouts."
A White House adviser warned that "Taxpayers are already in revolt over spending all this [bailout] money."
And this is my express warning, not his: That revolt could easily convert to one over spending money, period -- and that means goodbye universal health care, goodbye educational improvements, goodbye federal investments in renewable energy.
It's clichéish as hell, but hellishly appropriate: Progressives of the populist variety are playing with fire.
AGREED!
THE FIFTH COLUMNIST by P.M. Carpenter
Let The Sun Shine In......
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