It's Time To Impound GM

OBAMA NEEDS TO BEGIN MAKING THE UNPOPULAR, TOUGH DECISIONS
If you view a laid-off employee as the top of their very own food chain, as the Los Angeles Times posits today, then their activities, or lack thereof, would ripple down to the butcher, the baker and the candlestick maker.

In a story today, the Times used the example of a Southern California man whose software deal fell through, which then forced him to lay off his employees. In other sections of the article lay-offs meant consumers put off haircuts and skimped here and there to stretch their budgets.

Of course, there's an unquestioned rationale to this phenomenon, but isn't this the case General Motors and the United Auto Workers are trying to pass as reason for the government to keep it afloat? The GM question is indicative of many of the financial dilemmas facing the Obama administration. How can a company and, by extension, an industry so steeped in the American culture like the automotive business be allowed to flounder? Yet, when does continually propping up GM as a practical long-term policy become a lost cause?

CBS News today wondered what bankruptcy would likely mean to workers. The decision would likely trickle down to the closing of part makers and the shuddering of car dealerships around the country. That means, thousands of factory workers, mechanics and car salesmen added to the unemployment rolls. On the other hand is it wise to give another $15 billion or so to GM just to keep the lights on when it is likely another $20-$30 billion may be needed a few months from now.

President Obama ran on a platform preparing Americans to tighten their belts and begin making the tough decisions. He has yet to make those decisions. Although, maybe we should give him some time since according to a well-researched article in the New York Review of Books that chronicles his first month in office, Obama has spent an inordinate amount of time simply turning back many of President Bush's horrendous policies. Yet, on the economy, the Treasury Department has done little to force the banks and the entire financial system to concede one point similar to the circumstances around GM.

Instead of holding these auto-related industries in place while they lie precariously on the edge to oblivion, how about pulling the plug on them while there is time for the government to restructure the work force in an orderly manner. The New York Times ran a chilling front page article last Friday that reinforced this notion that the workforce is in many cases, obsolete. A chief economist at Wachovia Bank said, "These jobs aren’t coming back.” Isn't that what the foreman in the Bruce Springsteen song "My Hometown" said?

"Foreman says these jobs are going boys and they ain't coming back to your hometown," sang The Boss. Ironically, those lyrics were written during the equally disastrous 1981-82 recession.

There would be repercussion other than in employment. Sure, innovation would suffer. Plans for the vaunted Chevy Volt would gather dust, but who would be able to afford a $35,000 green car without a job or reliable financing available. We can take the hit now and hope for the recovery to not just get us back on our collective feet, but in far better position to dominate the marketplace for the next 30 years.

San Francisco Mayor Gavin Newsom said last week, the voters showed that the last 30 years of conservatism was a failure, yet the decisions this president is making on behalf of liberalism will define the next 30 years either positively or negatively for another generation of American political thought. Now is not the time for short-term thinking.

Geithner Doesn't Pay Taxes; Congress Doesn't Pay Attention

LINKS TO THE PLAYERS BLAMED FOR POOR ECONOMY NOT ADDRESSED

Treasury nominee Tim Geithner doesn't pay his taxes. This piece of information did not preclude Barack Obama from choosing him anyway. The man who would be in charge of the Internal Revenue Service has an aversion to paying taxes. I have an aversion to it, too.

Comedian Steven Colbert said, "I don't pay my taxes, either. Why can't I be Treasury secretary?"

Republican Senator Jeff Sessions is right, "the man who wants to be the top tax collector in America hasn’t paid his taxes.”

Despite the inconvenient truth about Geithner and another example of the new administration lax vetting process, the nomination took a hit, but still rolls, at least, for now.

The Associated Press speculated today that the postponement of Geithner's confirmation until the day after the inauguration next Tuesday may allow the chorus of disenchantment to rise. Most likely, the postponement is designed to push the story deep into the news sections of papers across the country planning splashy commemorative editions of Obama's first day in office.

Yet, the New York Times and other publications gloss over all of this and report Geithner will likely be confirmed nonetheless.

In spite of Geithner's problems, his nomination should be shrouded in more doubt than Capitol Hill is willing to delve. Many say he is capable, but as opposed to whom? George W. Bush and the presidency? Geithner presided over Wall Street--the epicenter of much of the greed and deregulation that has ground the economy nearly to a halt. He comes from the Robert Rubin school of economics that easily extends blame for our current situation past the era of President Bush and into the late stages of the Clinton presidency.

Geithner is cozy with the bank. Familiar with the players who built the house of cards which ultimately fell with the housing bubble and it was not until word leaked that he paid his four-year-old tax bill last week that Congress began to question his nomination.

Again, nobody is looking out for the American people.