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So why "tough love" for Big Auto, and not for the banksters and the "health" "insurance" parasites?

Politico (sigh, but it's all administration leaks anyhow):

In surprising [why?] findings to be outlined at the White House on Monday, President Obama has concluded that neither GM nor Chrysler as they now exist deserve more bailouts. But the White House is sparing them for a month or two, and is promising American consumers that the government will stand behind warranties if the automakers fail. ...

The administration found that both carmakers had failed to prove their “viability” as required under the terms of the massive government loans they’ve already received, and determined that neither should receive another bailout.

“We have unfortunately concluded that neither plan submitted by either company represents viability, and therefore does not warrant the substantial additional investments that they requested,” a senior administration official told reporters on a conference call Sunday night.

"Tough love hurts," said a source familiar with the discussions. "The members received the briefing with a sense of anxiety.” The source said the timeline and funds to be announced Monday are "not good enough."

I'd be the last to hold up the auto companies as corporate models, and the automobile economy and car culture aren't sustainable.

That said, the auto companies didn't suck trillions of dollars out of the taxpayer's veins after killing the economy out of greed; the banksters did, and Obama's proposing to give them more trillions. No "tough love" for banksters!

And the auto companies don't take money from well people, and then deny them care when they get sick, killing them; the "health" "insurance" companies do, and Obama's defending their "entitlement" to keep collecting fees from us as hard as ever he can. No "tough love" for health insurance parasites!

Where's the justice in this? And why is it happening?

1. The auto companies have unions, and Versailles wants to bust them.

2. Both the "health" "insurance" companies and the banksters own Congress.

3. The banksters run Versailles, and the world. (What better test for that than that they've raked in trillions of dollars with no accountability and not transparency after shitting the bed with their own "innovative" financial products?)

4. The "mystique" of finance: Versailles culture sees financial manipulation as important, useful, and interesting; the dull business of manufacturing is none of those things.

All of which goes far to explain why Obama's "we're all in this together" rhetoric is so deeply bogus to anybody outside Versailles (which is doubtless greatly comforted by it). For one thing, Obama's equating restructing an entire industry (the automobile industry) with raking back a few millions in one year of bonuses from executives. For another, some of "us" are responsible, and should be held accountable for the crisis, and others are not: Nobody I know leveraged their house 30 to 1 making bets on the derivatives market.

Plus ça "change," plus c'est la même chose...

NOTE Of course, I've got to give Obama props for taking on this problem, especially given how MI gave their votes to him in the primaries. Oh, wait...

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Submitted by jawbone on

hearing from MCMers how those rapacious unionized workers and retirees are just gonna have to "sacrifice." That once the automakers are in bankruptcy, all the contracts can be tossed out, all the agreements -- and those workers who dare to think they deserve and have earned decent health insurance? Well, they'll learn, won't they?

Are pensions a contract with workers?
Are benefits codified in contracts with unions actual contracts?
Not in bankruptcy court -- anything goes to keep the bidness solvent.

And maybe not to Team Obama, at any point.

We are so fleeced, and now our Dem administration is so fucking us.

Oh, and are they going to make the workers take GM stock to just keep the hope alive for pensions and jobs a wee bit longer?

Oh, and those "entitlements" of ours? Our remaining safety nets? Wanna put any bets on Obama working to strengthen them for the non-Uberwealthy, for the regular people? I fear we ain't seen nothin' yet.

Wanna bet BO'd even sign single payer if it made it through Congress?

All those times back in the primaries we here wrote about Obama's Reaganish tendencies? Others wrote about them? And we said it was better to have a candidate whose actions were known and clear, someone with an actual history? And the OFB attacked us? I, for one, actually had some small hope that maybe Obama was playing the center, keeping his "true" prog/lib tendencies on the QT so as to win all those centrist votes.... I think that hope is fading to nothing. Ashes.

+1% better than a Repub? +10%?

Can't recall where I heard it, but someone was talking about Team Obama's gamesmanship about the AIG bonuses putting Obama on the very edge of falling into the "He doesn't care about us" land among the public, where Bush landed with absolute clarity with the Katrina heartlessness and incompetence. Ah, on NPR. Now, who was it...

Submitted by lambert on

Here:

Really? Heads will roll before writing big checks?

Funny, I kinda remember a trillion dispensed without so much as — You. Out!.

I am no fan of Wagoners, but I have to ask the geniuses behind the bank bailouts: When are you going to ask the TARP and bailout recipients to step down? Ken Lewis being asked to step aside after many years of running BofA ? How about Blankfein? Pandit? And the rest of the TARP recipients?

This inconsistency from the new administration is very disappointing.

And Ritholtz isn't even a hippie. Just sane.

vastleft's picture
Submitted by vastleft on

IMHO, the key is, a little indirectly, your point #4.

Why would any self-respecting Villager lift a finger for sweaty uncreatives in overalls?

Submitted by jawbone on

The Velvet Glove Comes Off For Carmakers As Obama Threatens Them With Bankruptcy is Ian's take on Obama's move on the automakers.

I’m impressed. Impressed by his willingness to talk this way and act this way towards non-financial companies that is. Somehow when it comes to banks and brokers Obama’s practically begging them to keep the money they’ve been given, and assuring everyone that they won’t be forced into bankruptcy or nationalized. Somehow his words of outrage at bonuses don’t include forcing companies like AIG, Bank of America and Citigroup to renegotiate thier compensation contracts by saying “do it or you go down”.

Snip

There are a ton of cynical things I could say about this, but I’m going to point out something more fundamental: long run the US needs its industrial sector healthy and strong more than it needs an overpriced, overpaid financial sector. One major long term problem the US has is its trade deficit. Financial companies don’t noticeably help that, what they do instead is package up paper assets for sales to foreigners, but those assets are almost all debts. Everytime the US sells a collateralized debt ogligation, it’s selling its future to foreigners. Every time it sells a car, it’s getting money now for a real item now.

Smart restructuring of the economy would mean figuring out how to create a car industry and an industrial sector that stays in the US and doesn’t move all its production and R&D overseas, rather than trying to restart the paper for money financial economy, an economy which caused this financial meltdown and which has been partially responsible for stagnant wages for Americans for 30 years now.

I will also note that a real bankruptcy for the Big 3, would cause in excess of two million job losses and worsen the US’s trade deficit. (My emphasis)

I woke up this morning thinking this could be Obama's "Nixon goes to China" moment. Awful thought to start the day. The Dem prez takes down the unions? Does what no Repub has completely succeeded in doing? Wouldn't it be an incredible, terrible irony if Obama becomes the Anti-FDR? That with him at the helm the Democrats take apart the many things which the New Deal put in place?

FDR worked to make unions stronger, believing that Big Business needed a strong counterweight for the economy to work better for all. FDR worked to regulate the Big Banksters. He worked to establish a dependable old age pension for all workers. He wanted national healthcare, but never succeeded in achieving that.

Obama seems to be using this financial crisis to lessen the power of unions, even wipe out what workes have accomplished. Finishing Reagan's hit job on labor? Will he do the same to SocSec? Medicare?

Where is the Frances Perkins* of the Obama administration? Where is the president of this administration who would appoint such a strong proponent of the people and workers?

*Frances Coralie Perkins (born Fanny Coralie Perkins, lived April 10 1882 – May 14 1965) was the U.S. Secretary of Labor from 1933 to 1945, and the first woman ever appointed to the US Cabinet. As a loyal supporter of her friend Franklin D. RooseveltFranklin D. Roosevelt, she helped pull the labor into the New Deal. She, and Interior Secretary Harold, were the only original members of Roosevelt's cabinet who remained in offices for his entire Presidency.

NPR's Jackie Lyden did a nice piece on her with biographer Kirstin Downey on Saturday. NPR did another piece in 2005 on her work to establish SocSec.

Submitted by Elliott Lake on

. . . a capitalist in populist's clothing. I don't think we've seen the worst, by a long shot. What amazes me is that anyone OTHER than the financial industry is still behind him.