President Obama is about to administer tough medicine to GM and Chrysler, giving them 60 days and 30 days, respectively, to formulate workable plans for financial survival — in addition to securing the resignation of GM CEO Rick Wagoner.
Wagoner’s departure hardly comes as a shock, given that the once-mighty General Motors began its current swoon under his stewardship. But Michiganders and Wall Street analysts alike are pointedly asking the same question Josh raised last night at the TPM mothership: Why did the Obama administration call for Wagoner’s head but allow ineffectual banking CEOs to stay on the job and the government dole?
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.
Henry Blodget, writing at The Business Insider, echoed McCotter’s sentiment and wondered why Bank of America’s Ken Lewis hasn’t gotten the Wagoner treatment. Chrysler autoworkers also saw a double standard in the GM ouster, with one union leader remarking that Wagoner is the “fall guy.”
But perhaps the most stinging assessment of the Obama administration’s GM intervention came from the editorial board of the Detroit News (Michigan, if you’ll recall, is a key swing state for the 2012 elections):
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.
We have yet to hear from Michigan’s Democratic senators, Carl Levin and Debbie Stabenow. If they too raise the specter of a harder line being taken with GM than with Bank of America and Citi, the dissatisfaction could boil over on Capitol Hill this week.
Late Update: Levin just told reporters that he believes there’s long been a double standard for Wall Street and Detroit … but that it’s more important to focus on preserving the industry’s health than on anything else. TPMDC has more right here.