I don’t like federal interference in private industry. Have I made that clear enough yet? That means I would have been opposed to former Treasury Secretary Paulson, acting (I assume) on the orders of President Bush, putting heavy pressure on the head of AIG to step down after AIG received one of their many sacks of bailout cash. But somehow it doesn’t register quite the same way with me as President Obama forcing the GM CEO to resign. Maybe I didn’t pay as much attention to AIG’s internal employee shuffling as I have been to what’s going on with the auto industry. It’s just that the failure of AIG, while terribly detrimental to the economy (and many 401ks) in the short term, wouldn’t have nearly the impact of GM or another one of the Big Three closing up shop. The Big Three are American institutions, and it would be harder to imagine an America without them than without one of the many insurance companies we have in this country. Sentimentality aside, if we continue to interfere with the free market the way former President Bush has done with his bailouts, and the way President Obama continues to do with his multi-million dollar taxpayer gifts to various entities, the economy will not improve.
Neither President had (or has) the expertise to make personnel decisions at insurance companies (Bush) or to make the right choice for the next GM CEO(Obama). Thank goodness President Obama says he has no intention to run GM, and that he will draw the line at forcing their CEO to step down. GM and Chrysler owners can also be thankful that their warranties are now guaranteed by the United States Government. What a slippery slope it is for companies who take their fair share from the federal money tree — now the feds pretend to have the right to exercise direct control over these companies. It’s a painful lesson to learn — next time the feds come with the offer of cash — the correct answer is: Just Say No.
I rarely link to Wonkette, due to the fact that it’s not exactly (hardly ever, in fact) family-friendly, but this quote is priceless:
Hmm, so this auto bailout problem, is it a good thing or a bad thing? Good, because the government should continue to withhold money from GM and Chrysler until they get their acts together. Bad, because GM and Chrysler cannot get their acts together without money, plus the demise of the manufacturing sector etc. President Obama assures us, however, that no matter what happens we will not let our auto industry simply vanish. This is liberal socialist code for we will raise taxes on the wealthy and give everyone a free Geo Metro. [Washington Post]
Awesome. But see, Wonkette’s got it all wrong. President Obama will give us all free bicycles, since he doesn’t want us using more fossil fuels, even in a tiny car like the Metro. Just can’t wait for all my free stuff that my taxes are paying for…
2 thoughts on “what’s different”
Couple different things I’m sure you know I’m going to pick up on 🙂
Not only did the Bush administration order AIG CEO to step aside, but also Fannie and Freddie’s CEO as well. That’s 3 private industry CEO’s told to resign by Bush. Only 1 so far for Obama.
“Its just that the failure of AIG, while terribly detrimental to the economy (and many 401ks) in the short term, wouldnt have nearly the impact of GM or another one of the Big Three closing up shop.”
But it’s not just AIG, it’s also Fannie and Freddie, two huge lenders. The auto industry could not possibly exist without the lending industry, so I do think each industry is just as important in their own right. I think they both rely on each other. My beef is in the fact that the government can’t bailout Wall St. fast enough but demands a totally different standard when it comes to the auto industry. Like you, I’m against bailouts whatever the industry. But if we are going to routinely bailout Wall St. then I think we have to be just as lenient with Detroit.
Ah yes…forgot about Fannie / Freddie. Oops. My point remains the same though — this is a bad trend that President Bush started here. I’m with you. I say bail out nobody and let the free market pick winners and losers. But we are way beyond that point now. BTW, Did I put in enough negative references to the previous administration in that post to suit you? After all, that’s why I mentioned Bush. (Go ahead and believe that if you want to.) 🙂 The auto industry wouldn’t be in such a bad state if it wasn’t for many of the hoops they already have to jump through to make an average car. CAFE standards and various other government regulations (mostly environmental) have been making it more and more expensive to build cars. I’m not at all discounting the high cost of possible mismanagement and paid benefits for people who haven’t worked at the Big Three for years. That’s a very significant problem as well. I don’t think that President Obama has the right solution to these problems with the auto industry. Where are the experts on this industry that he calls for advice on what to do next with these automakers? He needs to find some people like that to help him.
I don’t know any more about what to do with our economic problems than the President does, but I do know that if we want to recover our involuntary investment in AIG or GM, we have to let those who know how to do their jobs do their jobs and get out of their way so they can succeed. Micromanaging the bailed-out companies from the Oval Office won’t get them in the black any time soon. You’re probably going to say that this is not what President Obama is doing. We will have to disagree on that, and I can’t help being concerned about where this could lead in the future.
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