A False Sense of Support
by Deacon Blues
Much has been written about the administration’s double standard when it comes to Wall Street and Detroit, but I am weighing in with my take anyway.
Yes, Tim Geithner and Larry Summers are Wall Street hacks who don’t give a f*ck about working class people or Main Street, and have never met a banker they didn’t like. This administration is way too tone deaf on economics and optics, with today’s evidence being Geithner’s “signs of improvement” remark when we’re about to report another three-quarters of a million lost jobs this week for March. Again, why does this administration feel that AIG bonus contracts carry more weight than UAW contracts, when autoworkers have already made sacrifices numerous times over the last several years? And what message should we take from the administration’s appointment of a corporate raider hatchet man to run the auto industry, if it isn’t to blow up the UAW and its contracts? Well, there may be something else going on here.
Obama has surrounded himself with folks who love Wall Street, and who are convinced that Wall Street’s better angels and some good regulation and trillions in taxpayer cash will fix the mess that Wall Street’s bad angels created. I think it is grossly naïve, but it’s the only plan out there right now, especially since the GOP has left the playing field of ideas. Wall Street has bought congressional Democrats, so aside from a return to regulation, the ruling party will not do anything that causes too much harm to the overlords. If the UAW and AFL-CIO were able to suddenly dump $25 million into fielding 30-40 progressive challengers to Democratic incumbents, things would be different, but because Wall Street is financing the ruling party, Wall Street gets to be in charge with people in the White House who are already predisposed in their direction.
As for Detroit, what’s really going on here is that the Obama administration wants to engage in industrial policy and remake one of the last major manufacturing sectors of our economy. There has been some teeth-gnashing over the White House sacking of Rick Wagoner (with his multi-million dollar departure package) and the shotgun marriage forced upon Chrysler with Fiat, but it pays to remember that Obama has been interested in changing the auto industry for several years. He now gets to do it from the White House, and is using his leverage to directly manipulate the future of the industry, plain and simple. If the UAW has to take more haircuts in the process, Obama will deem them collateral damage to a larger aim, the greening of the auto industry.
I only wish he felt the same way about Wall Street. If Geithner and his pals at Treasury are resisting accountability measures themselves, then its time for a separate inquiry into just what the hell the Bush administration, the Fed, and Obama’s Treasury Department have been doing, and for whom. Congress won’t do it, because Wall Street owns them. And Obama won’t spend his political capital to do it, because he’s surrounded himself with Wall Street apologists.
Does the White House feel that Obama's personal approval rating gets them past the political problem of going after the last major unionized manufacturing work force at the same time you go easy on Wall Street?