The auto companies are coming to the feds hat in hand as the economy tanks and their own bad decisions over time come back to haunt them. As Matthew Ysglesias says, GM, Ford and Chrysler’s failure “would cause a lot of hardship for a lot of people.”
And arguably the federal government should do something to help those people. But whatever volume of help you think would be appropriate should be targeted to people in need not handed out to firms as a favor to shareholders and managers who brought the companies to this place.
I’m afraid, however, we’re looking at a repeat of the Wall Street rescue. I know Barack Obama is talking about a stimulus package featuring public works projects, extended unemployment benefits and aid to state and local governments, but I am left to wonder how he plans to deal with Detroit.
According to The New York Times, Obama “pledged to find ways to help the struggling automobile industry.”
Still, there are positive signs that Obama plans to do what he says and focus on aiding the middle and working classes.
First, he called extended unemployment insurance benefits an “urgent priority” and, as part of his economic advisory team, he appointed two of the strongest populist voices out there.
Standing to one side of the President-elect was David Bonior, the former congressman from Michigan who clashed frequently and unapologetically with both Bill Clinton and George Bush on trade policy. Bonior, one of the truest allies of organized labor ever to gain a leadership role in Congress, has continued to work closely with unions — especially those in the manufacturing sector — since leaving the House. Going into the 2008 election season, he aligned himself with the campaign of John Edwards. While it is true that Edwards turned out to be something of a disappointment as a candidate — and as an individual — he was more right on economic issues than any of the other contenders. And it is reassuring, indeed, to see that he is in the room as discussions about an Obama administration’s approach to questions of whether and how to stabilize the domestic auto industry, in particular, and manufacturing in general. Notably, the President-elect signaled his support at the press conference for federal investment in the renewal of the auto industry.
Also appearing with Obama was Robert Reich, the economist who served with some frustration as Secretary of Labor during the early years of Clinton’s presidency. Since leaving the last Democratic administration, Reich has renewed his progressive commitments, steering toward a far sounder position on the issues than many of his former colleagues. During the Wall Street bailout debate of late September, he was a voice of reason who gave meaning to the often vague discussion about how to respond to the needs of Main Street. During his 2002 campaign for governor of Massachusetts, Reich scoped out a distinctly progressive vision for economic development — emphasizing investment in the renewal of urban areas and the development of new uses for old factories. Long before others were speaking seriously about a green economy — and the industrial policies that might make it work — Reich was talking these ideas up.
We have two months before he takes office and, as I’ve said repeatedly, it is important that the people who voted for Obama keep hammering at these points, that we are interested in a populist agenda, that we believe it is the job of the incoming administration to protect Americans as the economy continues its brutally steep fall.
Hank Kalet 