As the Michigan State basketball team gears up to participate in the NCAA Final Four tournament in their hometown of Detroit, the city is preparing for more than just a sporting event. This morning, President Barack Obama laid down the ground rules for how he plans to overhaul America's failing auto industry, namely GM and Chrysler.
"My administration will offer GM and Chrysler a limited additional period of time to work with creditors, unions and other stakeholders to fundamentally restructure in a way that would justify an investment of additional taxpayer money," Obama said in a press conference this morning. To break it down, he will give GM 60 days to slash prices and debts and essentially turn the company around, now that their CEO Rick Wagoner has resigned - which came after a virtual order from President Obama that he indeed step down. Chrysler, in fact, only has thirty days; their assignment is to merge with Italian automaker Fiat. The task is stated, the consequence simple: if they fail, they will end up in bankruptcy court.
The culture of immediacy facing the auto industry reflects the sentiment of not only the US government and media but also globally, which some would say is bad timing for Obama's trip tomorrow to the G20 Summit, aimed at coming up with solutions for the global economic crisis.
Here in the US, we, as Americans, and the media have shifted our blame from companies like AIG to people like Bernie Madoff to CEO's like Rick Wagoner of GM to former presidents. Simultaneously, automakers are criticizing President Obama today for treating their industry more harshly than the financial industry, who begged for their round of bailouts months ago. Financial companies, **hint hint** AIG, have fired back in disagreement, and the Obama Administration has responded to the criticism saying that they treat each company and situation on a case-by-case basis.
So far, we expect all of this. Industries blame each other for bringing down the economy. The UAW (United Auto Workers) may have a legitimate claim that they are continually losing workers, while the legal contracts of those at the top of the AIG ladder were allowed to receive money to stay on at the company. A closer look might show that now the AIG-ers may have to pay back somewhere around 90% of their recent paychecks, pending legislation. It's complicated, and from wherever you stand, it seems like your industry is getting hit the worst. My friends in the fashion industry are dealing with a lack of consumerism, my friends in the print and magazine industry live every day in fear of their publications folding, and we at MTV are trying to find our place in competition with not just television networks but gossip and video websites as well.
Any economist (who isn't tied to a specific industry) will tell you that no one entity brought down our economy. It wasn't just the financial industry or the automakers; it wasn't just Bernie Madoff either. It was all of us. Which is why it worried me when I turned on the television this morning and saw rallies and crowds in Europe holding up angry signs blaming the United States and even the Obama Administration for leading the world in an economic downfall. European nations have remained skeptical of Obama's stimulus plan, and even more skeptical of his advice to nations overseas to conduct their own stimulus plans. The President will make a sound argument to the European nations at the G20 summit, but it is doubtful that they will accept his policy direction with open arms. How can they, anyway, with thousands of their people rallying the streets in anger, cynicism, and blame.
So the question becomes not whether names like Bush, Madoff, Wagoner, Geithner, or Obama are to blame. Those names could not have greater range in policy, reputation, and certainly occupation. The question is why, if we are in a global economic crisis, are we playing a global blame game? Well, with any knowledge of human nature or of intergovernmental relations when a crisis emerges, the answer is simple, the question rhetorical.
However, as a 25 year old native of New York City and someone beginning to seriously feel the impact of the recession, I have to hope that at the G-20 Summit meeting in Europe, Obama's initial popularity in Europe will translate into results rather than fade into just another blame game.