30 March 2009

Wagoner, The Fall Guy. Et Tu Obama?

The Obama Administration is asking the head of General Motors to resign. It's like when your mom (or the mafia) asks you to do something - as in it's not really a question so much as a polite order. This is probably my largest disappointment with the new administration. I expected (and noticed) this anti-working class stance from the Bush Administration. I really did not think it would continue. To me, it screams of a double standard and Mr. President, I am displeased.

I compare the struggling auto industry to the struggling lending industry. The government says the banks can't fail. I say the U.S. auto industry has an equal if not greater importance. Yes, banks need to lend. But people need to work. I keep reading about frozen markets and plans to get credit flowing. That tells me lenders aren't lending, yet people are surviving. On the other hand, when a plant closes, people don't make money. They can't pay rent. They can't feed their families. That to me is more immediate than helping a bank that's so far just held on to its money anyway. Yes, people need credit. But not more than they need food. I think the Bush Administration chose white collar over blue collar when it came time to admit the recession and look for a solution. Now I see the Obama Administration doing the same.

While the government set aside $700 billion for the lenders, the automakers had to beg and be humiliated for $14 billion. Now, the banks that got that money are still not lending it, and their heads are being left alone. The current administration is not asking the Citigroup CEO to step down. Citigroup did have to get rid of most of its board. But the Citigroup CEO just met with President Obama Friday. Why is it Rick Wagoner (who has put himself out there as a fighter) has to quit? Why must the working class representation in this recession be lambasted and punished in a way white collar representatives are not? It seems the White House just needed a "fall guy."

University of Maryland economist Peter Morici, a one-time critic of Wagoner who had called for him to resign but now believes he had "started to get it," said the administration has a "PR problem" regarding unpopular corporate bailouts.

"They are bailing out just about anybody that shows up and says they need cash. The public has grown weary of it and instead of throwing a banker to the wolves they have decided to throw Wagoner to the wolves," Morici said.

It's not fair. I know that sounds childish but it's true. It's not fair for Wagoner to be rushed out of his job after being with the company since 1977. I think - despite mistakes made - Wagoner has shown he is believes in General Motors and that needs to be recognized. Now I bet his severance will be gutted to ease public perception. While AIG CEO Edward Liddy is suddenly below the radar. I'm shaking my head with disgust.