Tuesday, March 31, 2009

Bail Out Double Standard

My comments on former (yes) GM CEO Rick Wagoner stand. The former CEO was a part of the problem and not the solution and if we are going to bail any company out, holding those who were in charge while the economic ship if you will was sinking only makes sense. I don't feel sorry for Wagoner. He deserved what he got.

MSNBC talk show hosts David Shuster and Keith Olbermann, however, do raise a point that cannot be ignored. On their respective shows ("1600 Pennsylvania" and "Countdown") they both pointed to the disparity in treatment between the auto makers and the financial institutions. The conditions Obama imposed upon the automakers were not imposed upon the financial institutions. No contracts were re-written. Obama's team did not pressure those who received multi-million dollar bonuses to give them back in return for financial aid. No CEO was forced to step down. The financial institutions were, in fact, given a lot of money with no questions asked.

Obama has created an opening for the Republicans because a lot of the people our president is asking to give back (Wagoner excepted) are blue collar workers. Unions have to renegotiate their contracts and retired workers may have to re-enter the work force as legacy costs are re-adjusted.

These modifications are, to be sure, warranted. The taxpayer is, after all, bailing out the auto companies so imposing conditions designed to assure the company's survival (and hence, further our chance to recoup the money loaned) makes sense.

The disparity in treatment, however, is striking. Wagoner is no victim but he is, as of today, the only one which the president held accountable for his actions. The auto company's contracts with the unions will have to be adjusted, but they are, to date, the only ones which are seeing their contracts adjusted. It doesn't seem fair, particularly when the typical blue collar worker who could barely afford a cut in pay is forced to do so while the bankers on Wall Street who could afford to give up their bonuses isn't being asked to do so.

There will be hell to pay in November if the Democrats do not get their act together. The populist outrage that helped Obama win his presidential election could be used to remove them from Capitol Hill. Senator and former presidential candidate John McCain got himself into trouble for consorting with the wrong allies. His allies told him that the fundamentals of the economy were strong when they clearly weren't (unless of course, employment is of no concern to the average working man or woman). He said we needed more tax cuts, tax cuts that largely benefited the rich, and less spending when we needed create more jobs. McCain didn't get it.

But Obama's team doesn't seem to get it either. New York's Attorney General Andrew Cuomo upstaged the president last week when he, and not Obama, got some (albeit only some) of the bonuses returned. Obama's anger (to the extent that he ever displayed any over any issue) came too late and was over too early to be believable.

Now he goes after the union workers, after inviting the CEO's of major Wall Street firms over to the White House for a meeting?

If the Democrats lose their house and senate seats this fall, they will have no one but themselves to blame.

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