This GM bailout mishegos is driving the mainstream media meshugganah. To wit: conservative pretty boy Sean Hannity has been GM’s bitch for years, happily driving tweaked freebies and working plugs for GM product into his rants and “unscripted” comments. Now that his sponsor is toast, Mr. “We Love GM” has to defend the American automaker (to maintain his flag-wrapped appeal) and criticize Barack Obama for his corporate interventionism—knowing full well that the multi-million dollar Hannity–GM gravy train would have derailed months ago if not for your tax money. New York Times columnist Frank Rich may not be boxed in by GM payola, but the man’s clearly conflicted. “Even Rick Wagoner’s Firing Got Lousy Mileage” starts by kvetching that “pitchfork-bearing populists” (as opposed to Mac-wielding elitists) weren’t satisfied when President Obama brought them the head of Richard M. Wagoner. Although he, Rich, is. Mister! Are you following this?
For Frank Rich, Red Ink Rick’s defenestration was just desserts for the man who “embraced the Hummer.” And yet Rich accepts fortress Detroit’s inequality claim: shit-canning Wagoner was patently unfair given Wall Street’s perfidy. What’s more, Rich adheres to the idea that Obama’s CEO-i-cide was, at its core, political theater.
Few disputed the judgment of the Michigan governor, Jennifer Granholm, that Wagoner was a “sacrificial lamb,” a symbolic concession to public rage ordered by a president who had to look tough after being blindsided by the A.I.G. bonuses. Detroit’s chief executive had to be beheaded so that the masters of the universe at the top of Wall Street’s bailed-out behemoths might survive.
On this point even the left and the right could agree.
Frank, who are the few? Detroit supporters? Bailout detractors? Pitchfork-bearing populists? Wall Street money men run amok? Conservatives? Liberals? Huey friggin’ Long? Whose fault is this anyway?
Why is there any sympathy whatsoever for a Detroit C.E.O. who helped wreck his company, ruined investors and cost thousands of hard-working underlings their jobs, when there is no mercy for those who did the same on Wall Street? Might we, too, have a double standard? Could we still be in denial of the reality that greed and irresponsibility were not an exclusive Wall Street franchise during our national bender?
Hang on. Is there a double standard re: retribution for Detroit’s and Wall Street’s n’er-do-wells? Or, as the Brits say, is it all much of a muchness? Rich tiptoes around anything resembling a coherent argument, and revels in the pleasures of spreading Bailout Nation FUD.
The parallels between G.M. and the likes of Citigroup are uncanny. Much as bloated financial institutions gorged on mortgage-backed derivatives even when the underlying fundamentals made no rational sense, so G.M. doubled down on sure-to-be obsolete S.U.V.’s and trucks to serve a market transitorily enthralled by them. Much as the housing boom’s collapse left the get-rich-quick holders of AAA-rated mortgage derivatives with worthless paper, so the oil price spike left consumers trapped with self-indulgent, wealth-depleting gas guzzlers. In both instances, the customers were not entirely innocent.
Wait. So it’s OUR fault. Yes! Yes! Tax me! Hurt me!
In the unsatisfying aftermath of Rick Wagoner’s demise, we must rid ourselves of the illusion that there’s a rigid separation between Wall Street and what John Rich calls “the real world.” Any citizen or business that overspent or overborrowed in the bubble subscribed to its reckless culture. That culture has crumbled everywhere now, and a new economic order will have to rise from its ruins.
Wait; so it’s our fault and business. Huh. What about those credit default swaps guys? The ones made out like bandits when a democratic Congress rolled back the banking laws, and turned a blind eye to the chicanery that followed?
Anyway, let’s not get too technical. What’s with this “new economic order”? Pitchfork-bearing populist, Mac-wielding elitist that I am, I don’t like the sound of that. Nor this:
Change is hard. Change is traumatic. Sending a juicy C.E.O. — or six — to the gallows is at most a crowd-pleasing opening act to the heavy lifting of reform and rebuilding we still await.
I know Rich likes a powerful metaphor as much as the next curmudgeon, but that’s some scary ass shit he’s putting out there. Include me out.
You assume that Frank Rich is anything but a shrill for the left. Why even bother giving him an airing? He doesn’t offer any solutions to the car mess other than “here we go on the change express!”
RF, I wouldn’t get my panties in a bunch over the use of the gallows analogy. After all, we don’t hang people (except at Gitmo and Abu Gharib) anymore.
More interesting, was his reference to J. Ezra Merkin. A merkin (first use, according to the OED, 1617) is a pubic wig, originally worn by prostitutes after shaving their genitalia to eliminate lice or disguise the marks of syphilis.
The merkin in this example, was GM’s Chairman. I find this fascinating. A man whose name means pubic wig covered up the disease at GM.
I agree with Rich that the current crisis is on all of us. All of us who bought into the bigger and more mentality, even when we couldn’t afford it. Take the Iraq War, for example; That may end up costing $3 Trillion. The next time we want to give some no bid contracts to a VP’s ex-company, we should consider the debt to our children.
The next time we decide to pay off other people’s mortgage debt would be a better time to consider the debt to our children.
I don’t get the equivalence of fighting a war against those who mean this country harm with reaching for too much house or too many toys. If Frank Rich wants to blame all of us that’s his right. Some of us are not in that group so we get to watch from the sidelines. But now we are all in the aftermath and expecting the government to do something. It would be better if the government did as little as possible and let existing framework of bankruptcy and asset liquidation run it’s course.
Of course there are certain jobs that mean more than others. Like those that vote in blocks for reliable big government. They may not yet assign names to the votes but the precinct reports tell the tale.
The subtle message being sent is either join our gang or watch as we loot your assets. Better to get some free shit than be a chump and just pay for it all.
The HUMMER brand and SUVs are becoming the easy scapegoat for the government and MSM when talking about GM’s downfall. It really glosses over GM’s larger problems like their poison corporate culture, horrible branding, and poor dealer service.
I really don’t think that adding some off-road bits to a butched up Tahoe and Colorado caused the company to go bankrupt. It isn’t like GM had a long history of building good efficient cars, but then went crazy in 1999 with SUVs.
@ Carlos,
Give me a break. This is no way at all on all of us. All of us didn’t spend more than we had. All of us didn’t go hog wild buying new cars every 2 years. All of us aren’t CEO’s earning little of what our paychecks actually say. Many of us did make poor decisions, but now thanks to what Bush started and Obama is continuing, those who are responsible will not actually take that responsibility.
Expressing or supporting an idealogically pure idea ignores pragmatism.
Yeah, and we never hanged anybody, not even at Gitmo or Abu Grahb. What, we had to wait for four replies to correct this?
On another matter, On Friday, I noticed that Rush Limbaugh is advertising for GM again. Not sure when this began; but I’m pretty sure it had stopped for awhile.
I don’t know; seems like a bit of a conflict of interest, with both Limbaugh and Hannity. I will always wonder if they’re being as truthful or as forceful as they would be (when talking about bailouts, government intervention, etcetera) had they not had an advert arrangement.
GS650G – instead of “fighting a war against those who mean this country harm”, I believe it would be more accurate to say “fullfilling the Al Qaeda wet dream by invading an unrelated middle eastern country, wearing down our military, wrecking our budget, and eliminating the main competitor for Iran in the middle east”. Yup, we sure showed them.
RF – I honestly don’t understand what you are attacking in this article. Rich correctly points out that the Wall Street titans got a wrist slap compared to the grilling the Big 2.5 received. When he suggests that American consumers had a part in the economic collapse I’m pretty sure he was talking about American consumer behavior in general, not specifically targeting you. He even states that “Any citizen or business that overspent or overborrowed in the bubble subscribed to its reckless culture”. If you didn’t engage in those activities, why would you take this personally? As for the gallows comment, its clearly an analogy to Wagner being forced out as a symbolic sacrifice. Perhaps you have been frequenting to many conservative forum sites, where the angry talk about violence as if they would really like to engage in it.
Frankly (pun intended), it seems like you just don’t like Frank Rich, and used the fact that he mentioned GM as an excuse to post a derogatory hit piece.
Also – GM creating the Hummer brand has to rank as one of the most boneheaded corporate management decisions ever. The concept of building a brand to take on Jeep has some merit – but not for GM! The companies number one problem was too many brands, so they decided to add another one? And then convinced/pressured some of their very best dealer groups to go millions into dept to build beautiful new showrooms for a niche product?
It would have made a whole lot more sense to launch Hummer as a subset of GMC, then they could still sell the product while simultaneously helping GMC move upmarket and separate itself from Chevy.
The Truth About Newspapers.com announces New York Times Deathwatch.
Daddy, what was a “newspaper”?
Just another elitist scumbag with the character of a bitchy/immature schoolgirl that thinks it owns my income…Why bother with this “socialist/liberal/collectivist” parasite?
Well, I guess I understand that a site of this type needs to have new stuff to read and so, can beat a subject to death(watch). There isn’t a shrill out there I pay any attention to, except maybe our beloved and beleagered E-I-C here. I know, because I’ve been around here a long time that while not remotely perfect, Robert does and has had a good grip of this situation. But how many times and in how many ways can you say it without it sounding like a skipping record (Daddy, what’s a record?) to a daily reader.
At the crux of the matter, the song remains the same: American business (remembering thay are run by American businessmen), in general, big ones at worst, are not capable of controlling their greed. If we admit this then we admit that to correct this, it needs oversight. So, guess what? Our government is our only option to provide this oversight. Trouble is, they have proven over and over they are not immune to the disease either.
So, here we are. Human greed, without the natural constraint of being held responsible, will run amok. GM, starting with the “leadership” and haplessly perpetuated by the workforce (crew) were not blind to the pitfalls but had their escape (golden parachute/pension -paid medical) planned all along. The only thing they didn’t know was when. And they didn’t care enough about everyone they were taking down with them. And the government, who are here to protect and serve it’s constituants, stood by and watched.
When is now.
when a democratic Congress rolled back the banking laws,
Just so there’s no confusion here. OK, you used a small ‘d’ so maybe you mean democratically elected and not Democrat as in which party controlled both houses of Congress. In 1999 when Gramm-Leach-Bliley passed repealing Glass-Steagall, the Republicans controlled both chambers. But plenty of Democrats supported the bill which they hadn’t read (as usual), and Clinton signed it. His signing was a formality since the bill passed both chambers by veto-proof majorities.
I have to agree that this mess is ‘our’ (collective) fault since our democratically (well if we overlook gerrymandering, etc.) elected representatives steered us into it and have done squat to get us out. OK, they’ve been too busy guessing and telling us what we want to hear to get anything constructive done; assuming they’d be able to figure out, and we’d be able to recognize, what that is anyway. Maybe going back to the moon will fix things.
Wow! 12 comments is all it took for this to devolve into a left vs right punching match. Impressive.
The reality is that all our problems have been caused by ourselves:
1. We want cheap stuff. Retailers demand price cuts from manufacturers, so they cut quality, then people, then move the whole operation to China, laying off everyone. Now as a country we have less money to spend.
2. We still want all our stuff, and more of it. Great! credit cards lend, banks offer HELOCs, auto makers offer 0% and 72 months.
3. We get bored. Throw the old stuff out and buy the latest and greatest. Oh, we haven’t finished paying for the last one yet? Nevermind. Keep borrowing.
4. Since we don’t actually make anything here anymore, our service jobs just send the shrinking pool of money in circles, slowly bleeding more and more overseas.
5. Oops! Out of money. But wait, I still want my unpaid for house and stuff! Bailout please!
6. Repeat the cycle at the federal level.
Part of the reason for the death of newspapers is that the Gray Lady features the delusional whinging of a theater critic as prominently as that of two accomplished, if also self-aggrandizing, economists.
@dwford,
I agree especially #1.
The consequences of what I call the *cheap, cheap, cheap crowd* is that very competent organizations get ruined. I think the economists call it “destructive competition”. Production gets moved to *cheaper* countries and the skills get lost. It may be *cheaper* today but will be very expensive later. In the case of the automotive industry, we have and will lose the ability to design and build cars.
Example, GM used to domestically crank out rear-wheel drive cars and now they can’t – all of their rear-wheel drive products come from overseas. In fact, I have hard time discerning that any of their new auto product is designed primarily in the US.
Give me a break. This is no way at all on all of us. All of us didn’t spend more than we had.
We are all affected by this mess. Sure, many are inocent but we are still in the same boat. Don’t try and act like we aren’t.
Are the dealers really that bad? I hear/read plenty of complaints about other brand dealers as well.
The more whining I hear about HUMMER, the more I want one.
Jeff Waingrow- The editors seem to want a fantasy world of small private companies each making a few expensive specialty cars.
tced2-GM can make RWD cars, they just won’t sell.
Everyone here should join Consumer Reports to see what real people want to buy.
dwford- #1 would be easy to solve if the people we work for would pay us decently for our work.
I did my part, I bought a cheap American car at least. (Which was taken off the market 2 years later)
There’s never been a discussion here about why mark-to-market accounting may be the reason we’re all in this. Why? Because everyone’s just guessing at this point, without having an idea of the complexity behind the current situation. And why are we still trying to put the blame on someone? Let’s try and fix it, instead. AFTER it’s fixed, we’ll have a better idea of what caused it.
Shiney2 – you are on the right track!!!
There is no single problem originator. The problems lie at all levels of America from the consumer all the way to the top level management of the retailers and producers.
Anybody got an idea where the answer lies???
It’s America’s culture that is in crisis. The Conservatives have been in the drivers seat more or less since Reagan. Now they have run the car into the ditch. Their solution is to just walk away from it, act like nothing happened and hope that the car will drive itself out someday.
Well it works for them, but for rest of us it’s a disaster. When others try to pull the car out of the ditch, they are hit with complaints that the tow truck is too big and powerful, isn’t the right conservative make and that it is God’s will that the car is in the ditch. Perhaps conservatives should admit that the putting those who do not believe in government in the drivers seat was a bad idea.
It’s a group effort, but the voters caused this. They voted for easy credit and an easy life and run up the credit card. Now they need to payoff the debt and it is going to be harsh.
WOW The more I read the more this is less a car site and more Commentary. Nice Jewish boys going conservative. Yikes.
If you are going to use Yiddish you should remember that our grand parents helped found labor unions and oth liberal stuff.
“In fact, I have hard time discerning that any of their new auto product is designed primarily in the US.”
Chevrolet Malibu … ah, except the platform is Opel.
Drat.
Just don’t go looking over at Ford. You’ll find Mazda and Volvo under the rocks.
Mr. “Broken Record” here but compelled to re-state my belief regarding what I believe to be a major cause of our current economic problems at all societal levels;
class warfare.
Mr. Rich makes some valid points, but what is missed here is why removing Wagoner was necessary, and why this is not necessarily analogous with the banks.
The banks imploded because of a lack of appropriate regulation, which caused them to take undue risks. It’s not that the bankers aren’t good at banking, but that they pursue excessively risky goals if allowed to do whatever they like. We could replace their CEO’s as a symbolic act (and maybe we should), but they aren’t particularly incompetent or untalented, just reckless and in need of restraint.
Wagoner is another matter. He is personally responsible for the failure of GM. Unlike the banks, GM’s failures are not attributable to a lack of regulation, and more regulation can’t fix a broken car company or keep it from dying in the future. In this case, new leadership is critical, so if you want to see a turnaround, Wagoner, most of the Board and a whole lot of upper and middle managers need to get the boot.
This move tells me that the feds want to fix and eventually flip GM. If they had no expectations of at least trying, then they wouldn’t have bothered going to the trouble of removing Wagoner.
Notice the difference with Chrysler. Chrysler is clearly on the chopping block, and Nardelli still has a job. No need to fire him now if he’s leaving soon, anyway.
The task force may ultimately pull the plug on GM, but they have shown their cards that they wish to at least give it a shot. Ironically, the faster the economic recovery, the shorter that leash is going to be.
TR3GUY:
WOW The more I read the more this is less a car site and more Commentary. Nice Jewish boys going conservative. Yikes.
‘Commentary on Cars’ – sounds good to me.
Even the most progressive Jewish grandparents would have a hard time defending today’s lunatic aspects of liberalism/unionism:
Job’s banks. Tenure. ‘Make work’ work rules. Endless appeals and 6 figure costs to fire crap workers…
I think Frank Rich is one helluva columnist. Smart and always entertaining. (He began as a theater critic after all.) But like so many other political pundits, he tottered into uncharted territory when he took on GM/autos/Wagoner. And like most neophytes he got it a bit wrong. The fault of the GM under Wagoner (and the last several CEOs) was not that he approved the Hummer or stood in line for a gummint hand-out.
The problem with GM (and the other D 1.3) is that they have lost market share continuously since about 1975. They lost the American drivers. People who had religiously bought their wares for generations. Until the domestic automakers ask the question “Why is this?” (and develop an effective answer) no recovery is possible.
ZoomZoom wrote: “Yeah, and we never hanged anybody, not even at Gitmo or Abu Grahb. What, we had to wait for four replies to correct this?”
“The death of the prisoner, Manadel al-Jamadi became known last year when the Abu Ghraib scandal broke. The U.S. military said back then that it had been ruled a homicide. But the exact circumstances of the death were not disclosed at the time.
The prisoner died in a position known as “Palestinian hanging,” the documents reviewed by The AP show. It is unclear whether that position — which human rights groups condemn as torture — was approved by the Bush administration for use in CIA interrogations.”
http://www.foxnews.com/story/0,2933,147957,00.html
It may be “unclear” to the AP whether Saddam’s regime and the Bush Administration were morally equivalent, but one clue that they weren’t is that US military personnel involved in the Abu Ghraib abuse wound up treated as criminals.
Subsidizing GM can be intelligently discussed in the context of one’s economic or political preferences (laissez faire, state-run enterprises, whatever). But there’s really no good reason to drag in Abu Ghraib. That’s like inserting a comment about abortion into a discussion of transmissions.
ihatetrees :
Even the most progressive Jewish grandparents would have a hard time defending today’s lunatic aspects of liberalism/unionism:
My dad went to college because his father had a living wage, worked while in school and after the war had the GI bill. To me that was liberalism, unionism at its best.
That enabled him to be in a professional union, Teachers. Yup tenure, health benifits for life a decent, not high wage. See there was a social contract. The union and the district made an agreement and honored it and an entire generation had a better life than their parents.
Are unions perfect? Of course not. The AFL-CIO has some awful ones. I’m thinking teamsters and Hoffa. But who was screwing the worker? Both the Union boss and the employer ’cause they were in bed together.
No unions, globalism and a race to the bottom.
TR3GUY
That’s one theory.
“Also – GM creating the Hummer brand has to rank as one of the most boneheaded corporate management decisions ever.”
At the time, Hummer was hugely successful and profitable.
As for Frank Rich and The New York Slimes, they won’t be around much longer anyway…
“Include me out.”
Exclude me?
Famous malapropism. OK, maybe not so famous…
This article is incoherent. That’s why the posters are reading their own biases into it.
After rooting for Wagoner’s demise for so long, now you have second thoughts because Obama did it? Leiberman was right; no complaints about the surveillance state, torture, imprisonment without charge but Obama fires Wagoner and you get hysterical about government interference.
CEOs often get dumped by unhappy investors, ask Martin Eberhard (formerly of Tesla.) Obama was well within his rights. Here’s hoping some more CEOs in the banking industry get “invited” to step down.
P.S. It’s “shill” guys, not “shrill.” It is defined as “associate… who pretends no association to the seller/group and assumes the air of an enthusiastic customer.
http://en.wikipedia.org/wiki/Shill
dwford: 1. We want cheap stuff. Retailers demand price cuts from manufacturers, so they cut quality, then people, then move the whole operation to China, laying off everyone. Now as a country we have less money to spend.
I hear this all the time, and ask one question – if that is the case, why do Accords and Civics easily outsell Impalas and Cobalts, as the latter two are much less expensive than the former two? If Americans were only looking for “cheap stuff” when buying a brand-new vehicle, GM would not be facing bankruptcy.
@Farago
Yes, Frank Rich’s piece suffers from a lack of automotive expertise. But he does raise legitimate questions about the different treatment that Wall Street and the Detroit 2.8 have received.
And his criticism of mindless keeping-up-with-the-Joneses consumerism (whether in the housing or the SUV realm) that was clearly unsustainable long-term is spot on.
50merc wrote:
” . . . there’s really no good reason to drag in Abu Ghraib. That’s like inserting a comment about abortion into a discussion of transmissions.”
I agree. And there is really no good reason to accuse Frank Rich of being serious when he wrote about sending a CEO to the gallows.
carlos.negros
As my wife says, if it’s a joke, how come I’m not laughing?