[quote=olivant]If Chavez or Putin were forcing out company heads and directing companies to merge , we would be reading numerous editorials in the New York Times, Wall Street Journal, etc about the dangers of political control of private companies.
I don't think the President has many good choices to make here. But my major point in all of this is that he (and the Democrats) are taking on a major political risk by getting involved in decision making in the auto industry, a role they've generally avoided in the financial industry.
The double standard is obvious and it stinks. If things turn around by 2010 or 2012, assuming there IS still anyone left working in Michigan, this will mostly be forgiven by Michigan Obama voters. If things haven't rebounded by then and the President is perceived as the man who broke the UAW and wiped out GM/Chrysler while coddling "East Coast bankers" there will be some political consequences.
GM, AIG and the others ASKED for bailout money, and in GM's case there were strings attached, namely that they come up with a new business model. Well, their new business model was to ask for another bailout. Good riddance to Waggoner who gave us the Hummer.
The comparison to Putin and Chavez is apples and oranges. Chavez just nationalizes what he wants....that is not happening here. We are allowing business people who, in a real capitalist model would bear the risk of failure, and sparing them that risk because their failure could destroy the economy. When you remove the risk, you necessarily reduce the reward.
As for keeping the bankers, they have to show more accountability for what they did with the money, and I think the Wagoner firing is a warning shot to them....they are next.
Exactly, in the auto industry's case there were quite a number of strings attached. Why was this? Where was the plan presented to the government by the financial industry? There wasn't one. The finance guys knew they would get the money no matter what.
There weren't the same sort of conditions in the financial industry's case. This is despite the fact that the bailouts for the financial industry have been of orders of magnitude greater than those requested by the auto industry. It is also despite the fact that the government has some responsibility for the current auto crisis through bad trade policies, lack of national health care, bad emissions policies etc. I do believe that GM bears most of the blame though. (I work for a competitor)
The US is effectively printing money (or borrowing it from China) to give to banks to ensure that their ownership is overpaid for assets which are trash. Some of these banks aren't even American.
Geithner's new plan, if adopted , would increase the subsidy paid to the banks and financial institutions. It is effectively as if the US started paying GM $50,000 for each vehicle it couldn't sell.
But there is no way that GM and Chrysler can suddenly become profitable in 30 or 60 days. The question that I want to know is why should a UAW retiree who put 30-40 years in at the plant lose his or her pension or health coverage because the the President wants to play hardball with an industry that is clearly not on his favored list. Why is it the working man who's always getting it in the neck?
