TPMDC Morning Roundup
Obama Rolling Out Restructuring of Auto Industry -- And Boardrooms
President Obama is set to roll out his new terms for aiding the auto industry, with some big changes already in the works -- most notably, the administration has demanded and received the resignation of General Motors CEO Richard Wagoner. The government is also calling for Chrysler to partner with Italian automaker Fiat, and for GM to come up with a new business plan, after the government has rejected the proposals from both companies.
Obama's Day Ahead
President Obama will be speaking at 11 a.m. from the Grand Foyer of the White House, delivering remarks on the new plan for the auto industry. At 12:15 p.m. ET he will meet with Robert Gates. At 3 p.m. he will sign the Omnibus Public Lands Management Act of 2009, and at 5:30 p.m. ET he will meet with the House Democratic Caucus.
Biden's Day Ahead: Diplomacy In Costa Rica
Joe Biden is in Costa Rica today, where he will meet with President Oscar Arias. He will then participate in a multilateral meeting with Central American leaders, hosted by Arias. He and Jill Biden will then return to Washington tonight.
Granholm: Wagoner A "Sacrificial Lamb"
Gov. Jennifer Granholm (D-MI) this morning defended Richard Wagoner, saying he was a "sacrificial lamb." who stepped down for the good of the company. Granholm said Wagoner has worked for the company for 30 years, and was trying to turn it around.
Germany's Merkel Skeptical Of More Stimulus
German Chancellor Angela Merkel told the New York Times that she is skeptical of President Obama's calls for increased stimulus spending worldwide. "On an international level, we must all recognize that after the crisis we need to return again to solid financial policies," said Merkel. "Otherwise, we run the risk of already preparing the next crisis."
K Street Doing Well Despite Bad Economy -- Or Because Of It
The Washington Post reports that lobbying firms are seeing their business pick up in the bad economy, as clients seek to keep track of the provisions of new proposals and to get their portion of the stimulus plan."On the legal side of things, we've done our share of downsizing because of the economy, because of reduced demand," said Rich Gold, chief lobbyist at Holland & Knight. "But on the policy side...we're picking up a couple clients a week at this point."
Americans United Hits GOP "Budget"
Americans United For Change has this new TV ad attacking the Republican budget proposal -- specifically, for not having any numbers that one might expect from an actual budget:
"Tell the Republicans that Americans won't take no for an answer," the announcer says, proceeding to hearken back to the recent attacks surrounding Rush Limbaugh: "Tell them we want our President - and America - to succeed."
| TOPICS: Auto Industry, Barack Obama, Budget, Joe Biden, Stimulus
Josh
Matt
Eric
Brian
General Motors’ CEO Resigns, To Join AIG!
http://satiricalpolitical.com/?p=6713
March 30, 2009 9:04 AM | Reply | Permalink
So Chancellor Merkel thinks the crisis is already over? Somehow I doubt that. Perhaps we should institute more Buy America-style provisions if Europe expects to just leech off our stimulus.
March 30, 2009 9:06 AM | Reply | Permalink
Hogwash. Europe isn't "leeching" off our stimulus. Their stimulus takes a different form, and for the most part they've been doing it straight along instead of running around with wings flapping when things got tough. It's called unemployment insurance, "short work" programs (work weeks get cut to 3 days per week, for example, but paychecks stay the same while the public picks up the balance), national health care, in short, various forms of the social safety net that keep consumer spending steady when times get tough, which helps maintain economic equilibrium. But of course we haven't been doing that, because that would be socialism.
http://www.nytimes.com/2009/03/27/world/europe/27germany.html
March 30, 2009 9:36 PM | Reply | Permalink
I hope what is happening to Detroit, happens to Wall St. Namely, a tough government hand and no fear of shaking things up.
March 30, 2009 9:29 AM | Reply | Permalink
Tough love only gets applied to the powerless. It's the American Way!
Having said that, I LIKE the tough love approach to the auto industry (Chrysler really should have died long ago). But the enormously overgrown, parasitic and destructive financial industry needs it MUCH more, but won't get it.
March 30, 2009 10:00 AM | Reply | Permalink
Amen!
March 30, 2009 10:11 AM | Reply | Permalink
I hope what is happening to Detroit, happens to Wall St. Namely, a tough government hand and no fear of shaking things up.
Don't hold your breath :(
March 30, 2009 9:54 PM | Reply | Permalink
I believe once Wall Street will be treated like an upset stomach. You do what you can to fix the issue then change your diet to prevent it from happening again.
Wall Street poses a more systemic risk than the auto industry and thus the different approach.
March 30, 2009 9:45 AM | Reply | Permalink
By a funny coincidence, Wall Street is also much more politically and financially powerful than Detroit. But of course that has nothing to do with the differing treatment.
March 30, 2009 9:58 AM | Reply | Permalink
They provide more money for campaigns but I presume the auto industry represents more voters than wall street. The dollars mean nothing without the votes.
March 30, 2009 10:33 AM | Reply | Permalink
I wouldn't be surprised if the financial industry influenced at least as many votes as well as providing a lot more campaign cash. Some of Josh's recent posts highlighting the enormous % of the economy to which this cancerous industry has grown are really eye-opening.
March 30, 2009 10:41 AM | Reply | Permalink
So, I turned on Morning Joe just for a moment and there I see Arianna Huffington agreeing with Joe Scarborough that Geithner, Summers, Dodd and Frank were at the helm while this economy collapsed. She also claimed Roubibi, Krugman and every other economist she knows doesn't think Geithner's public/private partnership is going to succeed.
Now, I know Krugman is against it. He's virtually against everything Obama does for whatever reason. I remember reading an article regarding Roubini stating he wasn't 100% sure if the Geithner plan will work but if it does, it may prove to be very effective and make the taxpayer some money at the same time. It was also posted on Huffington's website. Maybe she doesn't read her own articles.
What I don't understand is Arianna's relentless attacks of Geithner.
So, if in two years, the public/private partnership works well and credit is flowing again, do you think Arianna, Paul "cry wolf" Krugman and the rest of the rabid left will admit they were wrong about Geithner.
March 30, 2009 9:47 AM | Reply | Permalink
Maybe you should read Roubini more carefully. He said the plan may be useful for removing junk from the balance sheets of solvent banks but that ones shown by stress tests to be insolvent will still need to be nationalized. That position really differs only in nuance from Krugman's. In fact I haven't seen more than a halfhearted defense of the Geitner plan from ANY economist, and that only from DeLong and, with the severe limitations just mentioned, Roubini.
The "it's just Krugman, and he hates everything Obama does" meme can really no longer be excused by ignorance; it's simply a lie.
March 30, 2009 9:56 AM | Reply | Permalink
I read it. Maybe you should read it. He doesn't not mention stress tests at all in the article. Point is, Roubini liked the plan and Krugman doesn't. The plan doesn't account for banks that don't pass the stress test so I'm not sure how someone can say they don't like Geithners plan on banks that fail the stress test because that information hasn't been released yet.
Krugman is quickly becoming like the boy that cried wolf. At a certain point, people just tune him out. He should make his position clear rather than floundering around, making broad sweeping statements and to be honest, beginning to sound like a guy that is bitter about not being picked to play in a game.
And Arianna, I guess she is sleeping with Krugman because they seem to be both eating the same cereal and coffee. Both of them are beginning to sound like a broken record by attacking Geithner non stop.
March 30, 2009 10:29 AM | Reply | Permalink
The only real difference between Roubini and Krugman is a political calculation as to whether nationalization will still be politically feasible if this plan doesn't fully solve the problem. Krugman doubts it will, Roubini is more optimistic.
http://dealbook.blogs.nytimes.com/2009/03/24/dr-doom-finds-promise-in-obamas-toxic-asset-plan/
“I see the option of nationalization” and the one presented by the Obama administration “as being complementary,” Mr. Roubini said. He believes that the stress tests the government plans on conducting on the banks will reveal which are solvent and which are insolvent.
In his view, those banks that are deemed insolvent will not participate in the toxic-asset plan and will be taken over by the government. Banks deemed solvent will be the ones that get to participate.
Nationalization “is fully on the table for banks that are insolvent,” Mr. Roubini said.
March 30, 2009 10:46 AM | Reply | Permalink
I re-read both of the pieces by or about Roubini, and it is clear that he has greater faith in the Geithner/Obama proposal than does Krugman. The value of including private investors, even if they get a sweetheart deal, is that they will help in discovering the true price of the toxic assets: Roubini clearly states that having the government buy up toxic assets on its own will likely lead it to overpay for them. Regarding eventual nationalization, he does not claim that the primary benefit of the Geithner plan has to do with its politics; he simply states that the intermediate step of engaging in stress tests will allow the government to determine which banks are insolvent, thereby allowing for more precise action that does not affect solvent banks. The fact that Geither asked Congress for new powers to take over non-bank investment houses not covered by the FDIC seems to support Roubini's position that the Geithner plan does not preclude the eventual nationalization of some banks.
March 30, 2009 11:26 AM | Reply | Permalink
Let's hope he's right. Remember that nationalization most likely entails Congress authorizing a buttload of money. It's a bit difficult to see how that's easier to get done after the Geithner plan has been advertised as being able to do the whole job and then, oops, sorry Congress we were wrong about that!
March 30, 2009 11:39 AM | Reply | Permalink
Frankly, I don't listen to a thing Arianna says. She employs some pretty good commentators, but she, herself, is nothing but a fluff head. A slightly better coiffed Sarah Palin in my book, but then I've just never liked her for some reason. I think it's her earrings (yes, it really is that pathetic, I just don't know why I don't like her).
March 30, 2009 10:14 AM | Reply | Permalink
I don't agree with Arianna all the time either - she said Obama would lose if he ran from the center - but she is no Sarah Palin. I do have a big problem with her website that constantly pits Krugman against Obama. Whenever he writes an article about his disapproval of Obama or his plans, she makes it the biggest headline on her site as if he is the only authority on the issue.
March 30, 2009 10:50 AM | Reply | Permalink
Geithner makes a good bogeyman because, with his weird German hairdo and perpetual scowl, he looks like a weasel. Despite the fact that Obama is the one in charge and ultimately making these decisions (and, thus, the more appropriate target of criticism), he's attractive and charismatic, so he's not easy to demonize. Geithner looks like a b-movie villain, so he takes the shit from the DC Heathers instead. If this sounds a lot like a high school cafeteria to you... well yeah, it pretty much is.
March 30, 2009 10:28 AM | Reply | Permalink
A little face paint and he would look like The Joker.
March 30, 2009 10:45 AM | Reply | Permalink
From a woman's point of view, Geithner is not ugly so I think your description stems from your dislike of him rather. Krugman on the other hand..........
March 30, 2009 10:53 AM | Reply | Permalink
I don't really have a problem with Geithner at all. I just think he fits certain visual archetypes that make him a good target/scapegoat. We saw the same sort of thing when some progressives tried to make Rahm Emmanuel out to be some evil puppet master, though that was less effective.
March 30, 2009 11:02 AM | Reply | Permalink
And my point here is that the buck stops with Obama. He is the one setting the policy direction. If Geithner resigns, it's unlikely that we're going to see a tectonic shift in economic policy. Obama says what he wants and Geithner just paints the picture, so demonizing Geithner and call for his resignation is little more than easy political maneuvering.
March 30, 2009 11:05 AM | Reply | Permalink
Couldn't be that in addition to being a sacrificial lamb he is one of your biggest campaign contributors, could it Jeffifer?
March 30, 2009 9:54 AM | Reply | Permalink
If we're going to go that road; do you think the millions in Wall Street cash Obama has gotten is a factor in the counterparty payouts?
March 30, 2009 12:15 PM | Reply | Permalink
If GM isn't reviving the EV-1 then this is all just a sham-wow to make you think something significant has changed. Maybe Wagoner was considering reviving the EV-1, and that's why he was sacked?
March 30, 2009 10:05 AM | Reply | Permalink
There is a good reason for Geithner being less popular than Obama, a reason that goes far beyond looks and charm. Geithner was part of the group of officials at the helm when the financial crisis erupted. As head of the NY Federal Reserve Bank, Geither was the chief of the second most important regulatory bank after Ben Bernanke. He was in on the deliberations with Bernanke and Hank Paulson, so he must, along with them, bear responsibility for the creation of the crisis itself. Obama, of course, as a Senator and Presidential candidate, was on the outside. Finally, Obama, while rightfully getting heat for the finanical crisis, is making big improvements in foreign policy, and has already signed into law minor but important progressive legislation on equal pay and children's health care that were blocked by Bush and the Rethugs. Finance is only one part of Obama's portfolio; it is Geithner's only responsibility. Thus, Geithner is rightfully taking more criticism, since he was present at the creation of this mess and has no countervailing positive policy successes.
March 30, 2009 11:33 AM | Reply | Permalink
As head of the NY Federal Reserve Bank, Geither was the chief of the second most important regulatory bank after Ben Bernanke. He was in on the deliberations with Bernanke and Hank Paulson, so he must, along with them, bear responsibility for the creation of the crisis itself....Thus, Geithner is rightfully taking more criticism, since he was present at the creation of this mess and has no countervailing positive policy successes.
Shhh. You're not supposed to say that. Haven't you gotten the memo (or read the comment threads)? Anyone who criticizes Geithner is by definition an Obama-hating, Krugman-loving, crazy lefty lunatic who is betting against America in the service of their crazy ideological interests.
March 30, 2009 9:42 PM | Reply | Permalink