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What's Good for General Motors?

By Dan Froomkin
11:50 AM ET, 03/31/2009

It's becoming something of a pattern: President Obama is faced with an economic mess of epic proportions left over from the previous administration and acts with a firm hand. In doing so he accrues extraordinary power --- and takes on enormous risk.

It was the auto industry's turn yesterday.

David E. Sanger writes in the New York Times: "In essentially taking command of General Motors and telling Chrysler to merge with a foreign competitor or cease to exist, Mr. Obama was saying that economic conditions were sufficiently dire to justify a new level of government involvement in the management of corporate America.

"His message amounted to an inversion of the relationship that had helped define the rise of American manufacturing might in the 20th century; now, Mr. Obama seemed to be saying, what is good for America will have to be good enough for General Motors."

Peter Wallsten and Jim Tankersley write in the Los Angeles Times: "President Obama's plan to save failing U.S. automakers -- and make them the instruments for creating a cleaner, greener transportation system -- marked a major step across the line that traditionally separates government from private industry.

"His announcement Monday of a new position on bailing out Detroit went beyond a desire to be sure tax dollars were not wasted in bailing out struggling companies. It put the Obama administration squarely in the position of adopting a so-called industrial policy, in which government officials, not business executives or the free market, decided what kinds of products a company would make and how it would chart its future."

Wallsten and Tankersley write that Obama's actions "drew immediate criticism, especially from conservatives." But, they note: "Obama's actions are 'consistent with the pattern of presidents acting during economic crises,' said Allan Lichtman, a professor at American University and an expert on the presidency. 'And it's absolutely consistent with patterns of presidents intervening to make sure major components of the economy don't fail.'"

In his remarks yesterday, Obama returned to some familiar themes in explaining what caused him to act: "[I]t's a failure of leadership -- from Washington to Detroit -- that led our auto companies to this point," he said. "Year after year, decade after decade, we've seen problems papered over and tough choices kicked down the road, even as foreign competitors outpaced us. Well, we've reached the end of that road. And we, as a nation, cannot afford to shirk responsibility any longer. Now is the time to confront our problems head-on and do what's necessary to solve them."

And despite calling upon all parties -- including unions and workers -- to make sacrifices, he had a particular messsage to "all those men and women who work in the auto industry or live in countless communities that depend on it....[W]hat I can promise you is this: I will fight for you. You're the reason I'm here today. I got my start fighting for working families in the shadows of a shuttered steel plant. I wake up every single day asking myself what can I do to give you and working people all across this country a fair shot at the American Dream."

But as David Brooks writes in his New York Times opinion column: "The Obama administration and the Democratic Party are now completely implicated in the coming G.M. wreck. Over the next few months, the White House will be subject to a gigantic lobbying barrage. The Midwestern delegations, swing states all, will pull out all the stops to prevent plant foreclosures. Unions will be furious if the Obama-run company rips up the union contract. Is the White House ready for the headline 'Obama to Middle America: Drop Dead'? It would take a party with a political death wish to see this through."

Meanwhile, Eugene Robinson writes in his Washington Post op-ed column: "The president is telling Detroit to shape up or die while at the same time politely asking Wall Street, whose recklessness and greed caused this economic crisis, if it would be so kind as to accept another heaping helping of taxpayer funds.....

"There are reasons for structuring the bank bailout this way, and there are reasons to take a get-tough attitude with the auto companies. But the juxtaposition is galling -- and, for many autoworkers, potentially devastating."

And Dana Milbank writes in his Washington Post column that Obama's pitch for Americans to buy more cars didn't go over well with the press corps: "The president had promised car buyers everything but rich Corinthian leather seats -- and reporters leaving the Grand Foyer got in the spirit of the day. 'Zero money down!' proposed one. 'Will he throw in a few oil changes?' wondered another."

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