Congressman Thaddeus McCotter (R-MI), during an interview with Fox Business Happy Hour, made several key points.
- So-called legacy costs are people who played by the rules
- Cutting worker wages to save their jobs is not ideal
- Geithner needs to get $137 billion out to the financial industry, but there’s no firm plan
- Disparate treatment between Wall Street and auto makers
McCotter notes the Obama administration forced GM CEO Rick Wagoner out, but Wall Street CEOs continue in their jobs and get bonuses. It’s pretty clear to anyone that Wagoner was a sacraficial lamb.
The Congressman is confused about what the administration expects. That’s not particularly surprising, since Wall Street got $700 billion, no questions asked, with Senate plus-ups of $100 billion for earmarks. Yet, the automakers, who make tangible products compared to the ephemeral likes of credit default swaps (CDS) and such, have to approach in sackcloth and ashes and beg and grovle.
GM CEO Rick Wagoner gets sacked by Obama even though he renegotiated contracts with the UAW. Meanwhile, Wall Street CEOs continue to receive bonuses, along with their subordinates, because the bonuses were “contractual obligations”. I’m sorry; Wall Street contracts are fixed and firm but blue-collar UAW contracts have to be re-negotiated? None of the UAw members ever received a million-dollar bonus!
Obama told Sunday’s Face the Nation, “We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge… much more lean, mean and competitive than it currently is.” Excuse me? Has anyone considered the auto industry is in the financial straits that it is because Wall Street imploded? Has anyone realized banks have not been giving any loans since last year? The auto industry is in trouble because they made the vehicles people wanted and now banks won’t loan money. Penalizing them further is uncalled for and unhelpful.
In a statement, McCotter said:
Detroit is a last bastion of honor. Earlier this week, the President and the Treasury Secretary met with the Wall Street Chieftains who crashed our credit markets and dragged us to the precipice of a global depression. The White house pledged to work with these Wall Street CEOs who, even now, defend their bonus packages.
Now, 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 CEO’s receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it.
Democratic Gov. Granholm saw it the same way. So, Michigan and the auto workers get shat on while the bankers and Wall Street get more money. This just adds insult to injury, considering Michigan’s 12.0% unemployment compared to New York’s 7.8%. Bankers have jobs and bonuses; production workers have neither. Those who created the financial crisis get rewarded and the last vestiges of American manufacturing get squeezed. Seem equitable to you?