3/31: Dealing With Detroit

Bloggers on the left and right are still debating the Obama admin.'s decision to demand the resignation of General Motors CEO Rick Wagoner. Conservative bloggers are blasting Obama's intervention in GM's management, calling the President "Our Socialist-In-Chief" and warning that Wagoner's firing represents "a major step toward corporatism -- an economic philosophy more reminiscent of Italy in the 1930s than of American free enterprise." Liberal bloggers are defending the move, arguing that the Obama admin. was perfectly justified in "demanding some leadership shake-up" in return for providing GM with bailout funds. However, lefty bloggers continue to complain that the Obama admin. is treating Wall Street differently than Detroit. Jane Hamsher observes:

"It's great to see the administration getting tough with auto industry, forcing Rick Wagoner from GM's helm and demanding that they break their contracts with bond holders. We can only hope that this new forcefulness will manifest itself when dealing with the 'too big to fail banks' now taking enormous risks with taxpayer money because there is no downside."

GENERAL MOTORS: The Road To Serfdom

Conservative bloggers continue to pour criticism on Obama for forcing Wagoner's resignation:

• Glenn Reynolds: "Rick Wagoner was fired not because he did a bad job, but because Obama wanted to look tough. Is that the kind of management that will get us out of this problem?"
• Right Wing News' John Hawkins: "Our Socialist-In-Chief has apparently decided that he has being President down so well that he can handle being the Super-CEO of General Motors at the same time. So, Obama has begun, Hugo Chavez style, to tinker with General Motors. The CEO and the Board? They're out. The business plan? It has to be rewritten to the satisfaction of a guy who has less business experience than the average assistant manager at Burger King or Wal-Mart. This is in addition to borrowing billions more to throw down the GM rathole."
• Power Line's John Hinderaker: "I'm not sure whether Barack Obama ever ran a lemonade stand as a child, but if he did, it would be his most salient business experience. Nevertheless, in his apparently boundless self-confidence, Obama evidently thinks that he knows better how to run an automobile manufacturing company than the management of GM or Chrysler. [...T]his intermingling of the state with private (or formerly private) enterprise is a sad echo of intellectual currents that swept through Europe in the 1930s. Resurrecting this sort of state 'capitalism' can hardly be considered progress."
• NRO's James Capretta: "The president and his team are suffering from the same conceit which has afflicted many other activist governments in many other settings. They believe a central government can find a way to induce reluctant consumers to buy products they don't want from inefficient suppliers without asking anyone, anywhere -- save for corporate hot-shots -- to make an economic sacrifice. Certainly, the unions aren't to blame. Therefore, the problem must be poor 'leadership.' And if the companies can't manage themselves well, then by golly, the government will help them do it."

Hot Air's Ed Morrissey has a different reason for criticizing Obama: "There may have been good reasons to jettison Wagoner. His inexplicable decision to take a private jet to DC in order to beg Congress for a handout would be one of them, certainly, as would the general financial condition of GM. Wagoner's presence hasn't done much to turn around the automaker, and the company may -- or may not -- do better under different leadership. However, by forcing Wagoner out, Obama gets the blame for additional costs that GM would not have had to incur. Rather than demote him, Obama demanded his resignation, triggering his retirement benefits. GM will have to shell out a fortune to Wagoner while negotiating concurrent payments to whomever is foolish enough to follow in Wagoner's footsteps."

Meanwhile, RedState's Francis Cianfrocca thinks the Obama admin.'s plan to deal with GM and Chrysler is too generous: "[T]he deal was for GM to restructure or die by March 31. Obama just gave them a sloppy wet kiss in the form of a 60-day reprieve, and he wants us to think he was being tough. The only cost that he imposed on GM was the dismissal of CEO Wagoner, whose departure has long been only a matter of time. And I'm betting that 60 days from now, there will be another big dollop of taxpayer funding for GM, accompanied by more harsh words."

GENERAL MOTORS II: Getting His Just Desserts

Liberal bloggers are defending the Obama admin.'s decision to demand Wagoner's resignation:

• Balloon Juice's John Cole: "This isn't the government going to Microsoft and telling Bill Gates what to do. This isn't the government coming to your profitable small business and telling you who to hire and fire. Hell, this isn't even the government telling GM what to do in the daily operation of their business. These are companies who have made decades of bad decisions coming to the government for yet another bailout, and as a requirement, the Obama team is demanding some leadership shake-up. Not only does it make sense to get rid of the guy who has been there for the last ten years as things went down the drain, but it would be politically impossible to bail these guys out unless some changes were made. If GM wants Wagoner to stay, they can go without federal money. It is that simple. Hell, if I had my way, we would have leadership turn-over at every bank or institution receiving TARP money."
• Firedoglake's emptywheel: "I'm non-plussed by the call for Rick Wagoner's head. I think Wagoner was making the right moves recently, but he was also responsible for years of inaction. So I'm not sorry to see him gone. In any case, Obama is forcing out the entire board of GM, so Wagoner would have had to go anyway."
• BooMan: "[E]ven though Wagoner won't be receiving the typical golden parachute severance package, the game is so rigged in his favor that his retirement package alone is worth approximately $20 million. I very much doubt that any employees or dealerships are going to be confused or upset that this incompetent just lost his job. Most people will wonder why we can't confiscate his pension and deferred compensation. After all, his company lost over $80 billion over the last four years and plans to fire almost 50,000 employees this year alone."

That said, liberal bloggers continue to push the Obama admin. to be equally hard on the banks:

• Firedoglake's Hamsher: "It's great to see the administration getting tough with auto industry, forcing Rick Wagoner from GM's helm and demanding that they break their contracts with bond holders. We can only hope that this new forcefulness will manifest itself when dealing with the 'too big to fail banks' now taking enormous risks with taxpayer money because there is no downside."
• Mother Jones' Kevin Drum: "[D]on't you wish that Obama were willing to treat bankers the same way he's treating the carmakers? It's pretty much impossible not to compare his tough words this morning with the conciliatory tone and even more conciliatory actions he's taken with the financial industry."
• Daily Kos' Markos Moulitsas: "Detroit is supposed to sacrifice, but Wall Street? It's a question of whether their bonuses should be millions, or MORE millions."

GENERAL MOTORS III: Enough About Wagoner, What About The Rest Of The Plan?

Some liberal bloggers offered cautious praise for the Obama admin.'s plan to deal with GM and Chrysler:

• Drum: "I was surprised and impressed by Barack Obama's auto bailout announcement this morning. He was, appropriately I think, fairly tough. From GM, he insisted that they fire their CEO and submit a tougher restructuring plan. From Chrysler, he insisted that they consummate a deal with Fiat and said flatly that they'd be allowed to go under if they didn't. This is appropriate: a private investor wouldn't treat Chrysler and GM identically, and there's no reason the federal government should either. [...] As for the news that the stock market plunged on the news, spare me. Investors are idiots if they think this is bad news. A tougher restructuring plan is better in the long run for everyone but the auto industry's bondholders, and I'll bet that even most of them have either hedged their positions or else sold off their holdings at 70 cents on the dollar to speculators. Save your tears for someone else."
• Think Progress' Matthew Yglesias: "Long story short, this looks like an economically responsible way to avoid a cataclysmic implosion of these firms at an inopportune moment. But this isn't going to prevent the conditions facing the population of Michigan from further deteriorating. That state more-and-more looks like it's going to be the 21st century version of the Great Depression's Dust Bowl. The most important policy question facing us in this regard thus continues to be what can be done to help the people of the Rust Belt that doesn't just involved indefinitely propping up shrinking firms. The first step is simply to turn around the shrinkage in the larger economy, but the question will remain even if recovery reaches the rest of the country."

Other liberal bloggers were a bit more critical of the administration's proposals:

• Daily Kos' Meteor Blades: "The problem is that administration's Path to Viability for GM and Chrysler that requires aggressive restructuring also may contribute to further pushing the companies to reduce their U.S. manufacturing footprint and increase their outsourcing off-shoring. That would add more losses to the 369,000 jobs already lost in the auto industry and auto parts makers since December 2007. And when recovery does happen, more U.S. auto jobs would be outside the country than ever before."
• emptywheel: "Will Obama recognize the irony of allowing GM to renege on its health care promises to a bunch of line workers, even while Obama demands a national health care plan? Will he recognize that his own plan needs to go further to eliminate the huge competitive disadvantage GM faces in the production of small economic cars (that Japan can make them with labor that gets free healthcare)? Will he allow the insurance companies to prevent a real fix for health care while dismantling the rest of US manufacturing because of health care?"

THOUGHT OF THE DAY: The Right's Current Transformational Moment

The Next Right's Patrick Ruffini:

"Though it has apparently triumphed, this is a dangerous moment for liberalism. Long-planned moves toward redistribution like universal health care or the repeal of the Bush tax cuts are being conflated with and to some extent elbowed aside by emergency nationalizations and [Treasury Sec. Tim] Geithner's experiments. The White House is not selling the de-facto AIG and GM nationalizations as such, because they know the stigma the S-word carries. It becomes harder to sell the long-standing liberal policy agenda as urgent and necessary when the Administration is busy putting out ten different fires first. And after Year One, it becomes exponentially harder for a new President to push wants instead of needs.

Meanwhile, it becomes easy for Republicans to point to real-life consequences of government control to nullify the entire Obama agenda. Screw ups like the AIG bonuses will inevitably happen and be magnified by the fact of government investment, and this will have a chilling effect on the public's view of interventionism more broadly in areas like health care. Barack Obama standing behind your new muffler will not be looked upon with warm and fuzzies in the years to come. The best case for Obama is that this time in history is seen as sober and necessary. But that's not a rallying cry and a movement-builder. The right will be galvanized to action by the theft of the free enterprise system. What will the left be galvanized by?"

LEST WE FORGET: One Of These Days...

From Overheard in the Office:

Frustrated coworker: Every time I get mad at Sue, I keep telling myself "what would Jesus do?" but one of these days, Jesus is going to yell at her!