Carrots for banks, sticks for autos – Politico (3/30/09):
“The likelihood of failure here is too high to invest any more political or financial capital at the moment,” said a Democratic official close to the White House. “For all the negative aspects of structured bankruptcy [a likely outcome for GM], it doesn’t necessarily collapse the domestic auto industry for all of time. It will continue to exist in some form.”
The official added: “They have more confidence in the leadership on the banking side – that there are people in place who understand what went wrong and the steps necessary to deal with this disaster. They have no sense of confidence that the auto industry has the capacity or plans to structure a workout.”
Theoretically, an Obama supporter with some stones (a theoretical being) could argue that ‘more’ is a relative term, and that if administration officials have 0.00 confidence in Detroit and 0.0000001 confidence in Wall Street then this position is reasonable. But the problem is that small relative differences don’t offer much in the way of a hook on which to hang a plan. Once again, Obama is fucking up the politics and the policy, and he apparently has no one around him who can counterbalance the influence of the banks’ best buddies, Geithner and Summers. There is going to be a terrible price to pay for these actions.