Why Washington Wants to Save Wall St. and Sink Detroit

Mark Gimein has a good piece on The Big Money trying to limn the ideological framework that has aligned against Detroit. He makes the excellent point that the banks are more responsible for their woes but get less abuse because law makers have no real idea what the bankers ought to be doing going forward. Instead, everyone has an ideological hobby horse to ride with Detroit whether you’re anti-union or pro-eco.

One difference between Citi and GM and Ford is that when it comes to Citi, we all know what they did wrong yesterday, but hardly anyone in politics assumes that they know exactly how to run their business tomorrow. With the automakers, everybody does.

The irony is that while the automakers have long been the sick men of the American economy, they are much, much less responsible for their most recent cascade of troubles than Citi and other banks are for theirs. It’s hard to hold them responsible for oil prices shooting up to $140 a barrel—and now that they’ve fallen back down to $50, the idea that, “well, of course gas will cost a fortune because we’re running out of oil” no longer seems so compelling. Consider that since last year, GM’s sales have plummeted 41 percent, and Ford’s 31 percent. But guess what? Toyota is down 34 percent, too—and it’s got nothing to do with making gas guzzlers or ignoring hybrids.


Micromanaging Detroit
Why Banks Get Bailouts and automakers get stern lectures
The Big Money, December 5, 2008

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