The spectacle of Wall Street fifth columnist paper pushers in the Administration and a lawyer who’s never even represented a commercial enterprise deciding the fate of American manufacturing speaks for itself, as they say. Along with class condescension and utopian, nebulous green fantasies.
Detroit never really had a chance in the end. The game was and is rigged. ‘America’ as a political construct is a puppet to the remnants of the viral and bloated still financial ‘industry’ with its ‘products.’ Detroit must play by different rules. Even if they knew better, the Administration would still have torecognize another political reality — ‘Americans’ (and especially their so-called political elites) are not only economic illiterates but as we’ve all talked about here before, largely unproductive arbitrageurs.
To paraphrase Trotsky to Obama, ‘You may have no interest in running GM [insert litany of future famous brands soon to carreen into imminent failure here] but GM (or its shards) has an interest in running you.’ 60 days won’t matter much either way. The government will be running things via clumsy macht or the semi-covert technocratese of a bankruptcy proceeding. Here’s a test – when you’re with friends, see which topic sends them into a coma faster, bankruptcy details or probate. On the other hand, one really can’t be sure this crew won’t make things even more ruinous. Many of them were on the case and blew it re Bear Stearns, Lehman, AIG, Merrill, BofA, Citi, yada, yada, yada.
We happen to think the GM issue will be soon a Bear Stearns memory. Larger pot holes loom ahead. As usual, Naked Capitalism sums it up well — Wolfgang Munchau from the Financial Times is particularly gloomy about the global economy, even for him.
While I agree with his concern, that a contraction can slip into a vicious circle, focusing on recapitalization as the primary policy response is wrongheaded. The Swedish in their salvage operation not only took over dud banks and hived off the bad assets, but they restuctured those loans and sin [sic] some cases even extended more credit to borrowers. And bailouts to banks without banking reform is a bad idea (and I see the Geithner talk of new measures as window dressing to appease the public in the hopes of eliciting support for the inevitable next round of rescues).
G-20 will be a yawner. Obama is determined to try and re-inflate the American balloon to its artificial bubble consumption levels and the Germans don’t want to play. We can’t afford the game anyway and the Germans know it. We’re trying to think of when an American president had such a weak hand to play before. We might get some of those fridge magnets to guess the vapidity of the statement of principles. We can only pray some B roll footage of Obama and Michelle cruising through what used to be Londonistan will at least be visually diverting.
In the interim, we continue to muse on a much more pressing matter, something that came up in a conversation with a pundit and convulses the Germans to er, boot: poor Jennifer Anniston forced to break up with John Mayer because of his Twitter addiction. Or the lastest Steele-ism. It’s a toss up.