The White House is in full hypocrisy mode. While Obama Treasury Secretary Geithner tries to do a massive power grab, invites financial sector CEOs to craft policy and cooperate in their multi-trillion dollar U.S. taxpayer money pig fest, the auto industry is shipped to bankruptcy court. Even worse, Chrysler is to be broken up into good cars and bad cars, yet Italy (Fiat) gets the good cars and the United States gets the bad.
Meanwhile Obama Press Secretary Robert Gibbs struggles as reporters immediately question the different standards:
Some members of the press in the room snickered. One reporter muttered under his breath: "that made absolutely no sense." Luckily for Gibbs, and those who wanted answers, he was given another bite of the apple. Responding to a question on the sacrifice that mid-westerners were being asked to make, he noted that Obama himself had traveled to those hard-hit towns and was acutely aware of their despair. Gibbs himself said he had spent the night before on the phone with Michigan Gov. Jennifer Granholm.
But his remarks still seemed defined by vagaries. Gibbs dismissed one question as "general and somewhat non-specific." But when asked later if he wanted questions about individual banks, he said he didn't have specifics. Pressed repeatedly to explain why Wagoner was told to go but bank CEOs were not -- or, for that matter, why labor contracts for auto-workers were reworked when it was deemed illegal to revamp bonus contracts for AIG execs -- he declared a "hesitancy" to "look at every entity the same way."
Indeed, many politicians are saying ex-CEO Wagoner was merely a sacrificial lamb and an earlier article, which has now of course cannot be found, implied it was a pure political play to cause confusion with the anti-bail out GOP (to whom GM gave more money to).
Anyone else here not wanting someone who can't even deal with TurboTax deciding which U.S. corporations are viable and which ones are not? Yesterday on Meet the Press I am fairly certain if one imposed Hank Paulson onto Geithner, the talking points and even the phrasing would have been identical. Geithner gave completely false options and never mentioned temporary nationalization of some insolvent banks.
So, do we really want Obama's Geithner giving a thumbs up and thumbs down on large U.S. corporations fate, based on his track record? The Obama administration cannot even fire their CIO who had massive fraud and theft occurring right under his nose, magically cannot even challenge executive pay when it comes to financial institutions, never mind listen to the many economists and experts calling for some of these banks to be nationalized. So who believes they have any judgment in private sector viability analysis?
It appears as I was writing this blog post, even CNN has picked up on this obvious hypocrisy:
Several financial bloggers were discussing that very question in the aftermath of Wagoner's departure.
One blog that aims to keep an eye on Treasury Secretary Tim Geithner and is appropriately called GeithnerWatch, had a post titled "Tim Geithner Fires Rick Wagoner, Still Happy With Vikram Pandit" that ended with this question: "How the heck does Vikram Pandit of Citigroup still have a job?"
And a poster at another investing blog, InformedTrades, wrote the following: "Glad that Obama can remove Wagoner but lets Pandit live and pays the AIG boys...Can you smell General Motorstroika?"
It's a head-scratcher. At the end of the day, it looks like failure in Detroit is being punished by the government -- as it should be now that taxpayers have a stake in GM. But that's not the case so far with Wall Street financial firms.
"I don't understand the thought process that it's OK to screw up a bank but it's not OK to screw up an automotive company," said Barry Ritholtz, CEO and director of equity research at research firm Fusion IQ. "You're telling one kid don't play with fire while the other kid is being given a pack of matches. There should be some consistency."