Yesterday we got Obama's official plan for the auto industry. Step #1: Fire the CEO of General Motors. Step #2: Push Chrysler toward a merger with an Italian car company. Step #3: Threaten bankruptcy for both companies.
Wall Street didn't seem to like the administration's response. The Dow responded remarkably ... sinking nearly 4%. I guess I would have lost confidence too, if I realized that the government could oust any CEO at will if the president thinks it is the right thing to do. In fact, some experts are saying that this is the most significant presidential intervention in the private sector since 1952 and Harry Truman with the steel industry.
So it is clearly Obama's goal to re-make the auto industry the way he wants it to be, not based on profitability or the demand of the market place. He says, "I am absolutely committed to working with Congress and the auto companies to meet one goal: The United States of America will lead the world in building the next generation of clean cars ... our auto industry is not moving in the right direction fast enough to succeed." In other words .. Obama gets to decide the right direction. Instead of making cars that the consumers want, Obama will decree that the automakers will make cars that HE wants. If they don't move in that direction fast enough he'll just fire one team and hire another.
Well it turns out that this is a direction that Barack Obama has envisioned for a while .. and like his chief of staff says, "never let a good crisis go to waste." In Obama's 2006 autobiography, The Audacity Of Hope, here's what he had to say about his vision for the auto industry:
The bottom line is that fuel-efficient cars and alternative fuels like E85, a fuel formulated with 85 percent ethanol, represent the future of the auto industry. It is a future American car companies can attain if we start making some tough choices now. For years U.S. automakers and the UAW have resisted higher fuel-efficiency standards because retooling costs money, and Detroit is already struggling under huge retiree health-care costs and stiff competition. So during my first year in the Senate I proposed legislation I called "Health Care for Hybrids." The bill makes a deal with U.S. automakers: In exchange for federal financial assistance in meeting the health-care costs of retired autoworkers, the Big Three would reinvest these savings into developing more fuel-efficient vehicles.
Aggressively investing in alternative fuel sources can also lead to the creation of thousands of new jobs. Ten or twenty years down the road, that old Maytag plant in Galesburg could reopen its doors as a cellulosic ethanol refinery. Down the street, scientists might be busy in a research lab working on a new hydrogen cell. And across the way, a new auto company could be busy churning out hybrid cars. The new jobs created could be filled by American workers trained with new skills and a world-class education, from elementary school to college.
It seems as though Obama is doing a real good job of selling a crisis as a means to institute his vision of the automotive industry. Are you comfortable with this? In fact .. are you comfortable with this level of government enterprise in the marketplace?
I'm think that there's a nagging thought with many of you that this has gone entirely too far .. and that our markets might have self-corrected if the government had let this crisis run its course. And .. if you've been paying attention you should know that this crisis wouldn't have happened .. and it certainly would have been less severe if Barney Frank hadn't stood in the way of efforts of people like George Bush and John McCain to intervene in Fannie Mae and Freddie Mac years ago.
This is something, isn't it? Obama replaces the GM boss, but Barney Frank - the one individual who carries more of the responsibility for this mess than any other single living human being -- seems to be untouchable.
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The federal government has decided that it 
Sasha isn't looking so hot right now (
