Crossposted from Generation X-Y Democrat Blog
The Catch-22
So the Obama Administration is in a Catch-22 with the GM, Chrysler situation.
If he is not tough enough and hands out more money, the socialist calls become louder.
If he is too tough, then the populist anger rises up and we hear questions of why he has set a double standard by coddling Wall Street execs while forcing Auto execs (i.e. Rick Wagoner) to step down.
The Obama Administration tried going down the middle, giving each GM and Chrysler a second chance before offering government funds, and I think that is entirely appropriate. If we are giving auto companies taxpayer money, they need to meet some demands before they are going to get it. Furthermore, we do need the auto industry to survive to get though this economic downturn, as they employ hundreds of thousands of people, and these companies represent a significant portion of our GDP.
The fact is this: If the bank bailouts never happened, this course of action would not nearly be as scrutinized as much as it is today.
But the bank bailouts did take place, so comparisons are being made – but why bother? Both sides of the aisle know that the handling of the first batch of TARP funds was lackluster at best. Also, the bank failures clearly have much more to do with the downfall of the economy than SUV’s do, and so of course the government is going to be more willing to put money into stabilizing the financial system sooner and quicker without waiting months to review individually submitted plans, as in the case of the GM and Chrysler – many, many businesses depend on these banks lending in order to be successful, or even functional for that matter.
Now did the White House get strict enough with banks when the TARP funds were released? No. Should the CEO’s be getting millions of dollars in bonuses? Not at all.
But if we kind of screwed up some key areas of the bank bailout, shouldn’t we be happy we did it right this time with the auto companies, instead of comparing it to the bank bailout situation? Seems pretty pointless to me. So how about we shut up about this one?