Obama Tough On Detroit, Easy On Wall Street

I do not disagree with President Obama's admonitions to the auto industry:

Obama, in an interview with CBS' "Face the Nation" broadcast Sunday, said the companies must do more to receive additional financial aid from the government. "They're not there yet," Obama said.

. . . Obama said the government would require a "set of sacrifices from all parties involved, management, labor, shareholders, creditors, suppliers, dealers. Everybody's gonna have to come to the table and say it's important for us to take serious restructuring steps now in order to preserve a brighter future down the road."

(Emphasis supplied.) Here's my question -- how about some tough words and conditions for Wall Street BEFORE you bail them out, AGAIN, President Obama?

Speaking for me only

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    Agreed, but ... (5.00 / 2) (#1)
    by Erehwon on Sun Mar 29, 2009 at 05:33:12 PM EST
    Who among the Obama cabinet will bell this cat?

    Big Amen! - Big tent, (5.00 / 5) (#2)
    by DFLer on Sun Mar 29, 2009 at 05:33:12 PM EST
    nothing more to say.

    Guess Big Motor (5.00 / 6) (#3)
    by squeaky on Sun Mar 29, 2009 at 05:38:38 PM EST
    Is not part of the club.

    you shouldn't start (5.00 / 1) (#4)
    by NYShooter on Sun Mar 29, 2009 at 05:39:26 PM EST
    drinking this early on a Sunday.

    CEO of GM to resign at the request of W. House (5.00 / 1) (#5)
    by Saul on Sun Mar 29, 2009 at 05:53:55 PM EST
    immediately.  Here is link

    CNN on it -- this may be huge (5.00 / 1) (#7)
    by Cream City on Sun Mar 29, 2009 at 06:03:25 PM EST
    and scary, the reasons behind the resignation.

    So, now he's an expert in the auto industry? (5.00 / 2) (#9)
    by Inspector Gadget on Sun Mar 29, 2009 at 06:20:45 PM EST
    On Monday, Obama is to announce plans to restructure GM and Chrysler LLC in exchange for additional government loans. The companies have been living on $17.4 billion in government aid and have requested $21.6 billion more.

    my emphasis

    They asked for, and got, a fraction of what the banks did, but being treated much differently. Can't wait to see who they are planning to put in his place.

    Are these announcements being made in closed tv studios so he can't hear the booing?


    Yes, this means unions lose, too (5.00 / 7) (#10)
    by Cream City on Sun Mar 29, 2009 at 06:28:59 PM EST
    and have to renegotiate contracts.  But no, it's illegal to renegotiate contracts for AIG bonuses.

    I just don't get, I guess.


    When do we reach the boiling point? (5.00 / 1) (#14)
    by Inspector Gadget on Sun Mar 29, 2009 at 07:04:39 PM EST
    I remember not more than 3 years ago the millions of Latinos who took to the streets to protest the immigration laws.

    What does he have to take from us before we mobilize? I don't even hear about letter writing campaigns.


    check out (none / 0) (#61)
    by BobTinKY on Mon Mar 30, 2009 at 10:28:38 AM EST

    April 11


    Well, to be fair. .. (5.00 / 1) (#18)
    by LarryInNYC on Sun Mar 29, 2009 at 07:38:14 PM EST
    the auto unions are being asked to renegotiate contracts for future work, the AIG guys are being asked to give return already paid bonuses that, in theory, they "earned" last year.

    On the other hand, I don't know if there's been any talk about renegotiating forward compensation at the banks and financial companies.  That should be done both to make them more solvent and to deincentivise rather than incentivise fraud.  At a meeting with bankers last week one of the bankers claimed executive pay wasn't on the agenda and Gibbs claimed it was discussed.


    retired worker pensions and health coverage (5.00 / 4) (#35)
    by souvarine on Sun Mar 29, 2009 at 09:46:59 PM EST
    How can concessions from retired employees be for future work? That doesn't even make sense. Not to mention the contracted benefits current employees had to give up.

    Thanks, that's a good point (5.00 / 2) (#37)
    by Cream City on Sun Mar 29, 2009 at 10:23:12 PM EST
    about past and future packages -- although, and I'm not a lawyer, I thought contract law was not predicated on such points.

    Also a good point re fairness -- that if workers have to renegotiate future compensation, so ought bankers.


    Bank of America (none / 0) (#53)
    by cal1942 on Mon Mar 30, 2009 at 12:58:36 AM EST
    has done something like that.  Sort of.  They're raising the salaries of all of their officers to eliminate criticism of bonuses.

    Is the fairness divided into sections (5.00 / 2) (#21)
    by Inspector Gadget on Sun Mar 29, 2009 at 08:01:52 PM EST
    that resemble campaign donations? General Motors vs AIG

    But the auto workers (5.00 / 2) (#22)
    by oculus on Sun Mar 29, 2009 at 08:17:27 PM EST
    Have already agreed to let Big 3 off the hook re health benefits agreeing to have Big 3 contribute to a union administered trust and then were forced to later accept less Big 3 contribution.

    Oh, please (2.00 / 1) (#24)
    by gyrfalcon on Sun Mar 29, 2009 at 08:38:55 PM EST
    Could we have just a little perspective here?  The financial system undergirds the entire economy, GM does not.  Secondly, the financial system runs on "confidence," or "risk assessment" if that's easier to contemplate.  GM does not.

    Obama would be completely insane to treat the two things as in any way comparable.


    Oh, please (5.00 / 8) (#27)
    by Inspector Gadget on Sun Mar 29, 2009 at 08:47:29 PM EST
    Auto workers feed into the economy on a huge scale. Cars, gas, parts, service, tires, tolls, parking, windows, etc. It isn't just the Detroit manufacturing plants involved in the auto industry, you know.

    But, if the financial system is so important, (5.00 / 10) (#30)
    by Anne on Sun Mar 29, 2009 at 09:03:09 PM EST
    why does it seem like it is being treated with much more deference than the automakers?  Whatever concessions and sacrifices are being asked of the auto industry should be exponentially greater for the financial industry; and if those running the auto industry can be asked to step down by the White House for not doing enough in light of the magnitude of the government's assistance, why is it that those running the big banks and holding companies and investment firms that have taken many times more seem to have government-guaranteed job security?

    Confidence is very much a part of the auto industry - who wants to buy a car from a company that may go out of business?

    And then there's another perception that seems to be part of this: auto industry = blue collar; financial industry = white collar.  The powers-that-be seem ticked off that Wagoner has not gotten the unions to knuckle under - and I'm pretty sure whoever is named to replace him will be someone who will not be playing nice with the unions.

    The financial industry has no union; just legions of well-dressed, upper-class workers who reek of money and power - and that is to be protected, not threatened.


    Do you have a dog in the (5.00 / 3) (#31)
    by oculus on Sun Mar 29, 2009 at 09:09:58 PM EST
    Hunt re Wall St?  I respect that have a great deal of knowledge re bailouts and financial institutions. .I don't. My perspective is as a person who lived a no. of yrs. In MI and who realizes how many people depend on the industry for employment.

    That's our measure now (5.00 / 5) (#38)
    by Cream City on Sun Mar 29, 2009 at 10:30:26 PM EST
    The importance of different classes of people, not fairness?  Sounds darned Republican to me.

    But heck, yeh.  The auto industry only undergirds the economy of the Midwest -- not just Michigan.  Twelve unimportant states in flyover country.  To heck with a fourth of the country.

    In my state, which is not Michigan, three cities already are near 20% unemployment -- and in all three, it's because their manufacturing base is GM or supplier industries.  And that doesn't count the many more out of work, including in my family, who work in supplier industries elsewhere in this state.  But my family is so unimportant.  

    Save the $#%%^%@!!~ bankers?  There won't be any savings in banks soon, or checking accounts or other money, if workers don't have any to put  there.  Money handlers are handlers, not producers -- workers are the ones upon whom our GNP is based.  


    Are you sure? (5.00 / 1) (#40)
    by The Addams Family on Sun Mar 29, 2009 at 10:39:32 PM EST
    workers are the ones upon whom our GNP is based

    Once that was so, but for a long time now our major product, at home and for export, has been debt, though weapons run a close second in the export category.


    WRONG (5.00 / 5) (#46)
    by cal1942 on Mon Mar 30, 2009 at 12:05:15 AM EST
    It's this attitude:

    financial system undergirds the entire economy, GM does not

    That will be the death of this nation.  

    We've allowed finance to become the master and finance has played a role in damaging the rest of the economy. The finance industry's demand for an unrealistically high return on the dollar has damaged our ability to stay abreast of the rest of the world in science and technology. The exhorbitant profits and outrageous compensation in finance has poisoned the well.  Far too many young people, lured by the money, are drawn into finance and away from careers in science and engineering.  

    Manufacturing is absolutely essential to our future.  The current finance industry can be blown away today and be rebuilt before the day is out.  Not so with manufaturing. In fact our finance industry should be blown out and rebuilt using the structural rules that for decades kept finance from becoming the all powerful influence that's corrupted our politics and drained the nation of the talent it needs to prosper.

    In case you haven't noticed we don't build nearly as much real wealth in this nation anymore. That must stop, we can't survive as a nation of finance and retail.  

    The whole notion is upside down. Finance should be a slave to industry and commerce not the other way around.


    Disagree Vehemently (5.00 / 5) (#6)
    by koshembos on Sun Mar 29, 2009 at 05:56:36 PM EST
    The main reasons the auto industry is in the gutter are: the Wall Street collapse that brought the country with it and the Auto industry management who lived high on the hog and flow their private jets while laying of workers left and right.

    Obama's let everyone share the burden is hypocritic and GOPinic. Why should workers who, at best, make a decent living give anything up? Let him find where the buried bodies are and make sure that the industry is better prepared next time.

    Of course, he cannot ask Wall Street to sacrifices. After all, they were the biggest donors to his campaign.

    I am getting tired and pissed of the hoards of let labor sacrifice. Sacrifice what? Their homes, their communities and their heritage and move to the South and work for pittance for Toyota.

    And, aren't we all feeling the pain of (5.00 / 4) (#8)
    by Inspector Gadget on Sun Mar 29, 2009 at 06:13:24 PM EST
    having the last cent wrung out of us so these big guys can continue to live high?

    I don't (5.00 / 5) (#16)
    by Ga6thDem on Sun Mar 29, 2009 at 07:19:10 PM EST
    know about the pain but there's a lot of anger and the sanctimonious lectures are beyond tiresome.

    Have your taxes gone up? (none / 0) (#25)
    by gyrfalcon on Sun Mar 29, 2009 at 08:40:52 PM EST
    They haven't gone down (5.00 / 2) (#28)
    by Inspector Gadget on Sun Mar 29, 2009 at 08:51:41 PM EST
    and, based on all the promises made, my taxes should all but disappear. I expect to see no difference, the same way the big tax cuts that were given out during the previous administration.

    What's your problem?


    Is that the only measurement (5.00 / 1) (#36)
    by sj on Sun Mar 29, 2009 at 10:10:39 PM EST
    Taxes?  Seriously?

    Tax increases are inevitable; they might not (5.00 / 4) (#41)
    by Anne on Sun Mar 29, 2009 at 10:42:12 PM EST
    be income taxes - they might not even be called "taxes" at all - they might be fees, for example - and they may not come at the federal level, but at the state and local level.  But  we're all paying more.

    What I see are more and more of "my" chips being bet on companies that are seen as being essential to the success or failure of the financial system, and because there seems to be a distinct lack of accountability as well as the much-vaunted "transparency," that bet is as risky as any I might place in Las Vegas or Atlantic City.


    They might not even be called taxes..... (none / 0) (#57)
    by coast on Mon Mar 30, 2009 at 07:56:50 AM EST
    I noticed how last week when the administration was pitching its mortgage program that they refered to a decrease in the interest payment as a "tax savings".  I guess when you promise that you will be cutting taxes for 95% of the people that any savings, whether it has to do with taxes or not, needs to be called a "tax savings".

    So its a "CONTRACT" for Wall Street but (5.00 / 6) (#11)
    by veloer on Sun Mar 29, 2009 at 06:54:32 PM EST
    a "contract" for the UAW? Why is so easy to renegotiate the UAW contract but bankers contracts are sacrosanct? I would really like to know.  

    Easy (5.00 / 2) (#26)
    by gyrfalcon on Sun Mar 29, 2009 at 08:47:25 PM EST
    UAW contracts are collectively bargained.  Also, whether or not the AIG-FP people get their bonuses does not impact in any way whether the the company survives or not because it's a trivial expense to the company's bottom line.  Whether you like it or not, the same is true of GM's executive compensation.

    Have a little faith in the UAW leadership.  They are very, very tough guys and would not be willing to give this stuff away if they weren't completely convinced it was necessary for the survival of the company, and hence their jobs.

    The whole compensation structure and practices of our entire economy are criminally out of whack up and down the line.  Even Obama has said so.  It has to be dealt with economy wide, most likely by putting the tax schedules back to where they were up to the '70s.


    Wait a minute gyrfalcon (5.00 / 2) (#47)
    by cal1942 on Mon Mar 30, 2009 at 12:27:30 AM EST
    you didn't answer veloer's question.

    He asked why a banker's contract, meaning I suppose the bonus arrangement that they claimed bound them to the deal, was sacrosanct and the UAW, with contract in hand, was forced to scrap it and renegotiate.

    A lawyer would give the best assessment of these circumstances but, inasmuch as equity is concerned this stinks on ice.

    Of course the UAW will renegotiate to save the company and their jobs but the incompetents on Wall Street want their money plain and simple and the hell with everything else.


    If the GM CEO deserves to go, then so (5.00 / 12) (#12)
    by tigercourse on Sun Mar 29, 2009 at 06:59:43 PM EST
    do dozens Bank and Investment firm CEOs.

    And the horse (none / 0) (#48)
    by cal1942 on Mon Mar 30, 2009 at 12:28:48 AM EST
    they rode in on. Not just CEOs but a pile of others as well.

    On Bart Simpson's chalk board tonight: (5.00 / 4) (#13)
    by andgarden on Sun Mar 29, 2009 at 07:01:02 PM EST
    "My piggy bank is not entitled to TARP funds."

    Grrrrrrr, at least Detroit = jobs (5.00 / 6) (#15)
    by Militarytracy on Sun Mar 29, 2009 at 07:16:47 PM EST
    The banks = whatever the false floor of their toxic assets becomes until it unbecomes.  What is Obama smoking THESE DAYS?!?!  And he had the audacity to make fun of me?

    Michigan (5.00 / 3) (#19)
    by Inspector Gadget on Sun Mar 29, 2009 at 07:53:57 PM EST
    That was a tough state for Obama in the primaries.

    But gave him (5.00 / 1) (#49)
    by cal1942 on Mon Mar 30, 2009 at 12:31:23 AM EST
    a 16 point margin in the general election. For crissakes even Kent County gave him a majority.

    Why no tough words or conditions for Wall Street? (5.00 / 4) (#34)
    by Romberry on Sun Mar 29, 2009 at 09:35:39 PM EST
    It's like this: The rich are better than factory workers. The rich are better than managers of factories and factory workers. The rich are just better...and we need 'em...and Obama is (as he says in his book, The Audacity of Hope) now quite comfortable in moving in those circles and as a result often sees things their way.

    I hate to be cynical, but I don't really expect Obama to do anything that will truly upset the oligarchs. They are the bankroll. As to the masses that voted for him? They are just a means to an end.

    (Note that this is not about Obama. This is about the system that we actually live in, as opposed to the system we are told and want to believe that we live in. The president, regardless of party, is going to serve the established status quo. End of story.)

    Well, it's not just about Obama (none / 0) (#39)
    by The Addams Family on Sun Mar 29, 2009 at 10:36:44 PM EST
    But it is also about Obama. He wanted so badly to be Preznit.

    On this one, I hope that Michelle Obama (none / 0) (#42)
    by Cream City on Sun Mar 29, 2009 at 10:58:00 PM EST
    may be heard.  At least there's one person from the working class in the White House who may remember. (Back before the problem of $10,000 ballet lessons).

    I have my doubts Cream City (5.00 / 1) (#50)
    by cal1942 on Mon Mar 30, 2009 at 12:36:39 AM EST
    I've known all too many people from more difficult economic situations than Michelle Obama who would sell out their own without batting an eye.

    As I posted elsewhere... (5.00 / 2) (#52)
    by Romberry on Mon Mar 30, 2009 at 12:51:16 AM EST
    I posted this at tonight at Salon's Table Talk:

    Have you read The Audacity of Hope? If so, do you recall the part (I can't find the quote just now) where Obama talked about how he had grown comfortable moving in the circles of rich Wall Street investment bankers and other finance industry types and how they were smart, interesting people who knew what was going on with policy? Well...that's what happened and it helps inform my thinking.

    I don't for a second doubt that Obama and everyone in his administration believes that restoring Wall Street along with the mega-conglomerate banks to their, uh, rightful place as 'Masters of the Universe' and re-inflating a burst bubble is the exact right thing to do. I really do think they believe it. The problem is that when you move in the kinds of circles where Obama is now comfortable, you really face a difficult task in not absorbing some of the ideas and attitudes...and I think Obama has absorbed plenty and probably way too much. Any but the most diligent and consciously resistant would.

    Auto companies, unions and hourly workers...that's old school. Dirty jobs. Manual labor. They make actual "stuff". But just think! A Wall Street wheeler-dealer can ginnie up a deal that moves nothing but bits of paper around and churn up more "profit" in a minute than an entire auto maker may make in a month. Heck, if that's so, who needs automakers? But Wall Street and mega-conglomerate banks? Now we're talking the good stuff!

    I can't say I'm surprised (5.00 / 2) (#55)
    by otherlisa on Mon Mar 30, 2009 at 02:02:27 AM EST
    but I'm still outraged.

    Thanks BTD and all the commenters here - at least I don't feel like I'm fulminating all by myself.

    car inventory (5.00 / 1) (#60)
    by Jlvngstn on Mon Mar 30, 2009 at 09:00:28 AM EST
    we have enough cars already produced to cover two years worth of purchases.  If we stopped producing completely right now, at the current sales pace it would take two years to clear the inventory.

    We have over 2 trillion in personal credit outstanding, a 56 trillion credit default swap market and an impending commercial real estate, hospitality and airline crash.

    We don't need more cars, we don't need more credit default swaps and we don't need more credit.

    As I said last September, unemployment is going to hit close to 10 this year and foreclosures are going to accelerate at an even greater pace than 2008.  

    The stimulus designed to create or save jobs will not even cover the losses from last year which will pale in comparison to this year.  

    Yet here we are.  Bailing out banks who cannot open a maxed out credit market.  For those Americans who overextended themselves through their own spending or to no fault of their own, they will simply have to file bankruptcy, lose their homes and deal with it.

    The bankers, by and large will maintain their standard of living at the expense of all of us.  

    I stand by my prediction of an October market crash, record levels of bankruptcy, record levels of foreclosure and big business getting bigger.  

    I am sad today.  Not because the automakers are going under, but because our government has firmly committed itself to protecting the wealth of the wealthy while its working class cries out for work.  

    I guess I should be proud though, we are the most charitable people in the world, I just never figured we would be giving to those who need it least.

    Automakers' sin is having too powerful labor (5.00 / 1) (#62)
    by BobTinKY on Mon Mar 30, 2009 at 10:33:41 AM EST
    groups with decent benefits working for them.  If instead they had millionaire whiz kids with even better benefits they'd get the fraction of the Wall Street bailout they are currently seeking without any questions asked.

    Proof positive we no longer have a Democratic Party such as existed in the 60s and under Roosevelt.  We have a Party dominated by former Rockefeller Republicans whose disgust with the social insanity of today's GOP led them to take over our party.  

    Sacrifices from ... labor (2.00 / 1) (#32)
    by Andreas on Sun Mar 29, 2009 at 09:23:12 PM EST
    Talkleft agrees with "sacrifices from ... labor"? Interesting.

    One should not forget that this is a website supporting the Democratic party against the working class.

    No profanity please (none / 0) (#20)
    by Big Tent Democrat on Sun Mar 29, 2009 at 07:56:50 PM EST

    I have a funny story. . . (none / 0) (#29)
    by LarryInNYC on Sun Mar 29, 2009 at 09:02:33 PM EST
    about walking into a bar with an Australian and seeing a sign on the bar back that said "No Profanity".

    Unfortunately, I can't tell the story here.


    Waiting for Steve M (none / 0) (#23)
    by oculus on Sun Mar 29, 2009 at 08:22:12 PM EST
    To speak up in defense if the state of Michigan and its work force.

    Nah (5.00 / 4) (#44)
    by Steve M on Sun Mar 29, 2009 at 11:09:52 PM EST
    I know when I'm beat.  When you can't even achieve unanimity among progressives for the proposition that a strong manufacturing base is essential to have a strong middle class and a strong economy, the fight is over.  Detroit is dead, let it go like New Orleans or something.

    Instead of manufacturing, the financial industry is ascendant, and we need to put our resources towards what works, apparently.  It was the auto industry that gave us the innovation of mass production and spurred the last 100 years of growth and prosperity - but enough already.  Maybe when we look back 100 years from now, we'll find that it was a particularly clever method of securitization that kept the run going for another century.  Seems implausible to me, but hey, that's the bet we're determined to make.


    Your post makes my heart hurt (5.00 / 1) (#58)
    by Militarytracy on Mon Mar 30, 2009 at 08:16:34 AM EST
    I remember reading 'What's the Matter with Kansas' and being stunned that some essentially decent people experienced current liberals as overeducated elitest idiot buttheads.  I told the book this was so untrue.  Now I'm not that certain.  It does seem that perhaps groups of common sense people spotted this dynamic in the group I was hanging with and saw the potential for demise that such a group could/would usher in. I was blind to it the whole time but I see it now.

    Hear, hear. (none / 0) (#45)
    by Cream City on Sun Mar 29, 2009 at 11:22:33 PM EST
    (Other than that, ahem, Ford of Detroit copied the mass production process.  The guy who gave it to Ford, and us, was Armour of Chicago, after Ford took a tour of the Chicago meatpacking plant.:-)

    The Detroit and New Orleans comparison is intriguing.  With all the White House attention to Bismarck and Fargo not being home to the next Katrina . . . what if Obama's Katrina will be Detroit?  For that matter, much of the Midwest?  

    Levees are only one thing that government is supposed to build well to protect people.  And there are a lot more people in Detroit, with a metropolitan population of almost 5 million.
    Entire population of North Dakota, the least populated state?  Less than 650,000.


    There are others who claim that (none / 0) (#54)
    by cal1942 on Mon Mar 30, 2009 at 01:07:27 AM EST
    Ford applied assembly line techniques as witnesed in the auto industry of the day; the Olds Motor Works.

    You can only say let it go (none / 0) (#51)
    by cal1942 on Mon Mar 30, 2009 at 12:41:42 AM EST
    if you no longer live here.  And securitization won't keep anything going for the next 100 years. What would be left to keep going? A bigger Walmart?  A bigger warehouse to house more imported goods that eventually will sit full because no one will be able to afford to buy the contents.

    No more Wall Street bail outs (none / 0) (#33)
    by deetee on Sun Mar 29, 2009 at 09:31:13 PM EST
    This is the end of the line..  When are some WS execs asked to resign... there are so  many to choose from

    Time to hit the streets.  April 11 is the national days of no more bails outs.  Check out a new way forward... the push behind this..  Give Obama something to think about.. Get behind this..


    Did the Math and the Science (none / 0) (#56)
    by Working Man on Mon Mar 30, 2009 at 03:58:42 AM EST
    Mark your calendar: April Fools Day 2009 is upon us.President Obama will allow the Custom and Immigration service to award 65,000+ H-1B Visas to foreign High-Tech workers. This is in addition to the 910,000+ awarded since 2001 (yes that's about a million jobs given away). How many H-1B Visas is the U.S. legally required to award this Wednesday? NONE, NADA, ZIP!!! Will Obama give the jobs away? You betcha.  Was he asked not to let this happen? Yes.  

    Go to his whitehouse.gov contact page and tell him to halt the H-1B High-Tech giveaway.

    If not, just send your kids to college to get an  engineering or computer science degree,then make room in the basement so they can move back home after graduation.

    If we don't stop this, U.S. workers will be the April Fools.

    I read that some of the companies (none / 0) (#59)
    by MO Blue on Mon Mar 30, 2009 at 08:48:39 AM EST
    who are sending work to India are offering to allow the current employees to work in India for India's pay scale. So see they don't have to move home. They have the option to become third world employees. What a deal.