Why Not Get Tough With Wall Street?
President Barack Obama is showing tough love to the embattled American auto industry. He rejected turnaround plans submitted by General Motors and Chrysler and forced the resignation of GM's longtime CEO Rick Wagoner.
Obama says both companies are not adapting to the challenges of the industry fast enough to survive. He announced that a short-term infusion of cash will go to GM and Chrysler, but it might be the last government dough either company sees.
Why is Wall Street being coddled, while auto makers are being reprimanded? Why aren't the CEOs of Citi Bank or Bank of America being asked to resign? White House Press Secretary Robert Gibbs struggled to answer those questions in a press conference today. Here are his comments in response to an inquiry about the apparent double standard:
"Understand that we have taken and are prepared to take extraordinary steps to help the auto industry get it back up on its feet, to put it on a firmer ground, and see it return to a stronger position, to support the companies, the workers and communities they are in," he replied. "I think if you look at, I think this question was asked over the course of the last 12 hours. The original agreements contemplated a March 31 deadline whereby you would either give additional assistance or call the loan. So what I think what the president and his task force are doing is taking the steps forward to help these companies. At the same time [we are] expecting a plan for viability in the future. I would also say that the decisions that are made on any entity receiving assistance is done in a way that we think will stabilize the economy, create jobs, in some cases it is to protect jobs, and have to a have manufacturing base, like with GM, Chrysler and others. It is to get lending moving again. But I think that this administration is rightly matching and balancing the notion for responsibility, at the same time understanding that we want to be a partner in ensuring strong and viable auto industries moving forward."
The Huffington Post says, after Gibbs' response, members of the press snickered and one reporter muttered, "that made absolutely no sense."