Monday, March 30, 2009

What's Good For Tesla Motors ...

So, it seems, the Obama Administration is going into "Good Cop/Bad Cop" mode, under a dangling light bulb, whacking General Motors and Chrysler with telephone books, while lounging around with, giving coffee and smokes, to the Fat Cat Greed Heads on Wall Street.

They sent a Clemenza-like character to Detroit and the word back from the trip is "Oh, Rick Wagoner, you won't see him no more,"

And the Fat Cat Greed Heads of Wall Street are probably thumbing through their Blackberries, as they wait for Obama, and Secretary of the Treasury Timothy "What's that, Lassie? (Woof, woof!!) Timmy Geithner's in the well?!!" Geithner to deliver the cash, to find the number of the cleaning company, to start getting those summer homes opened up, scrubbed nice-and-spiffy, and ready to rock for the Memorial Day barbecue.

Deb Cupples, over on Buck Naked Politics, has a good rundown on why the now former GM Chief Rick Wagoner gets the boot, but just as the news was settling on the rather forceful action by Obama, more-and-more posts are popping up, questioning the double-standard of handling Detroit, versus Wall Street.

Here's a big hint - Larry Summers didn't worm his way up from the Motor City.

A big H/T To Joan Walsh for helping to point to the answers;

Krugman isn't the only smart person raising these concerns. If Evan Thomas' smug tone in the Newsweek piece turns you off, take the time to read Simon Johnson's terrifying Atlantic piece, "The Quiet Coup," which lays out the foundation of our current mess and then comes to similar conclusions as Krugman about the drastic steps needed to recover: The government must take over unhealthy banks, dramatically restructure them, save the ones that can be saved and later sell them back to private investors. (The piece was apparently written before Geithner's plan was released so it doesn't comment on it directly.)


Strangely, or not, on the same morning I read Johnson, a smart reader took the time to send me this 1999 New York Times piece about the way leading Democrats, including Clinton administration Treasury Secretary and Obama economic czar Larry Summers, hailed the repeal of Glass-Steagall, the Depression-era law that kept banks out of the insurance and broker businesses. It's as tough to read as Simon Johnson's piece, in its way.
Henry Blodget is scratching his head, as well, with his "Rick Wagoner Goes But Ken Lewis Stays?", while Frank James, on The Swamp, asks "Why no GM treatment for Wall Street?"

Robert Stein, on ConnectingTheDots, also, sees the double-standard;
The White House's willingness to take over GM is in sharp contrast to its hands-off approach to the banks in the plan to make toxic assets disappear. Does anybody in Washington know more about making cars than making loans?
The Detroit News editorialized today that "Dumping Wagoner lets Obama deflect attention away from Wall Street, where his Treasury Department is still moving through quicksand, and turn it on Detroit.

He can portray himself as being tough on the corporate executives who are ruining America, without having to draw blood from the bankers."

Elana Schor, over on TPMDC, in her "The Double-Standard Question Haunting Today's Detroit Announcement";
Here's how Rep. Thaddeus McCotter (MI), the third-ranked House Republican leader, put it to Reuters:

"Mr. Wagoner has been asked to resign as a political offering despite his having led GM's painful restructuring to date. Mr. Wagoner has honorably resigned for the sake of his company's working families.

When will the Wall Street CEOs receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it."
And, Libby Spencer, on The Impolitic, has the gem-of-the-day, in her "General Motors Meltdown"

Dan at Pruning Shears voices my only objection in the quote of the day:

Responding to the looting of Wall Street by busting the UAW feels an awful lot like responding to 9/11 by invading Iraq

Are all roads leading to Tesla Motors?

But for all the sturm-and-drang being vented today, only Brad Friedman, on The Brad Blog, seems to be in possession of the Magic-8 Ball missing from the White House.

Tesla Unveils All-Electric Sedan, But Needs Federal Loan for Factory to Build It

So let's add one plus one here ...


So, if the federal government is currently bailing out the Detroit automakers, who have refused (and/or failed) to bring an all-electric car to market since GM abandoned the very popular EV1 in the late 90's, for reasons still-unexplained, and since Tesla is waiting for federal loan guarantees, why not put two and two together and give them the loans, but require that they use Detroit plants to build the cars, in hopes of avoiding the layoffs of thousands of Big Three autoworkers?

Here's the Press Release on that new Tesla Model S sedan (while Matt Nauman, of Mercury News, took the Tesla Roadster out for a thrilling spin).

Sounds like a plan to me.

Perhaps, will we come to the day of "What's Good For Tesla Motors, is good for the country?".

Bonus "Wall Street Good/Detroit Bad" Riffs


The Anonymous Liberal: Do Conservatives Understand How Bankruptcy Works?

Josh Marshall: Just a Thought

Yves Smith: Auto Company Plans Rejected by Task Force

Andrew Leonard: Why so hard on the Rust Belt, and so easy on Wall Street?

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