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Missing the point on a Detroit rescue

An industry that has been poorly managed, with executives looting it for huge bonuses and protected employees compensated far beyond the average American, making products that have caused untold damage to the planet, comes to Washington seeking a bailout. Without it, the executives say, the entire economy could be severely damaged. Of course lawmakers should say "hell no."

But they didn't. When the so-called financial services industry asked for a "rescue," lawmakers couldn't move fast enough.

American automakers are a different matter. Asking a fraction of what has been plowed into Wall Street — with not much to show for it — they are getting the brush off from the Bush administration and much of Congress. Myths proliferate about union compensation, this from the same people who hail obscene executive compensation and bonuses for the top swindlers on the Street. In fact, the union has been giving back for 20 years.

It's striking that the same people who celebrate the bootstrapping entrepreneur and the sanctity of contract are contemptuous of blue-collar workers who have created most of the wealth in a given business and painstakingly negotiated labor agreements that allowed their families to reach the middle class. And there's much carping about how the top executives failed to build cars for an expensive-energy future or to protect the environment. Yet policymakers consistently refused to insist on even modest improvements. Now it's so easy to say to Detroit: Drop dead.

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Yet another financial swindle sneaks into the ‘rescue’

So what did Americans really get when Congress approved a bill giving the Treasury power to spend some $700 billion to stem the financial panic? It's becoming clear that Treasury Secretary Hank Paulson has mishandled the crisis in typical Bushian fashion. First with incompetence, by allowing the investment banking sector he came from to march over the edge of the abyss over the past year, long after it the cataclysmic risks to the system were clear. Then, in mad improvisation, he allowed Lehman to fail. He refused congressional suggestions of a direct capital infusion into the banks — until it was clear it "buy toxic debt" scheme wasn't working and Britain and the EU led the way with direct infusions. Brownie, call your office.

Also typically Bushian was the stampede to act, on a bailout plan with no oversight that would have given Paulson unprecedented power. Iraq, anyone. Congress made some oversight improvements, and Obama has made it clear he will alter the "rescue" further if he wins the White House. But everybody had a gun to his or her head to "do something" as the markets collapsed.

Of course, we're not dealing with drowning poor, black folks in NOLA, here. So ultimately, the administration was willing to take any "socialist" action to save its wealthy friends in the investment banks, the hedge funds, etc. So maybe the Brownie analogy is not quite right. Yet we should be on guard. Remember another hallmark of Bush governance: enriching the politically connected and powerful through privatization. How could that happen in the "financial rescue"?

Now it's becoming clear

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