President Barack Obama said this morning that neither General Motors not Chrysler has proposed sweeping enough changes to justify further large U.S. government bailouts.
** NEW COLUMN COMING UP … THIRD TIME’S THE CHARM? AFTER WINNING TWO AFGHAN WARS IN A QUARTER-CENTURY, AMERICA TRIES TO MAKE SOMETHING STICK. (This will come after the Moscow conference of the weekend and before the Netherlands conference on Tuesday.)
** GALLUP POLL: A NARROW PLURALITY LIKES TREASURY SECRETARY GEITHNER. He’s been a lightning rod of controversy since even before he was confirmed as US secretary of the treasury, due to his central role in the Wall Street bailout of last fall as president of the New York Federal Reserve Bank. It only got more controversial after that with a now you see it/now you don’t bank rescue plan in February and the AIG executive bonus scandal of March.
He’s Treasury Secretary Tom Geithner, and in the brand new Gallup Poll, he has a 42% job approval rating. His disapproval rating is 40%.
If the American public has “lost confidence” in Geithner, it might be expected that a majority would now disapprove of the job he is doing as Treasury secretary. That is not the case. At the same time, a majority does not approve of the job he is doing, either. The public remains divided, with no tilt in sentiments in either direction.
It is not a good sign for Geithner, perhaps, that he receives significantly lower approval ratings than does his boss. In the same poll in which Geithner receives 42% approval, Obama receives a 64% approval rating (and a 30% disapproval rating). This is not the first time this differential between Obama and his Treasury secretary has surfaced. A Gallup Poll conducted last week showed that Americans are much more satisfied with the way Obama has handled the crisis concerning bonuses paid to AIG executives than they are with Geithner’s role in that situation.
For whatever reason, Obama’s approval rating has been quite stable throughout his brief presidency, suggesting that events or the news have had little impact on the public’s views of him. Geithner to this point does not appear to get the same benefit of the doubt.
As long as Obama has Geithner’s back, he’s fine. I suspect his numbers were worse two weeks ago.
** A QUIET WEEK IN CALIFORNIA POLITICS GETS QUIETER. A quiet week in California politics – with Governor Arnold Schwarzenegger on vacation and not much happening in the California governor’s race – is even quieter today with Cesar Chavez Day. It’s hard to think of a holiday which isn’t taken in state politics.
** OBAMA DEMANDS MORE CHANGES FROM DETROIT BEFORE FURTHER FEDERAL BAILOUTS. President Barack Obama this morning demanded more changes from two of America’s Big Three automakers. Ford is in pretty decent shape, relatively speaking. General Motors and Chrysler are not.
The Obama Administration has demanded the resignation of GM Chairman and CEO Rick Wagoner, and he is out. GM is getting “adequate working capital” for 60 days to come up with additional changes in order to qualify for more federal support. Chrysler has been given 30 days to work out a merger with Fiat, also bridge financing during that period.
Needless to say, two questions suggest themselves. Is the Obama Administration using a double standard here, shelling out far larger sums to Wall Street with fewer strings attached? Or is the administration about to apply Detroit’s new and much more stringent strings to Wall Street?
Excerpts from Obama’s statement on Detroit: One of the challenges we have confronted from the beginning of this administration is what to do about the state of our struggling auto industry. In recent months, my Auto Task Force has been reviewing requests by General Motors and Chrysler for additional government assistance as well as plans developed by each of these companies to restructure, modernize, and make themselves more competitive. Our evaluation is now complete. But before I lay out what needs to be done going forward, I want to say a few words about where we are, and what led us to this point. …
We cannot, we must not, and we will not let our auto industry simply vanish. This industry is, like no other, an emblem of the American spirit; a once and future symbol of America’s success. It is what helped build the middle class and sustained it throughout the 20th century. It is a source of deep pride for the generations of American workers whose hard work and imagination led to some of the finest cars the world has ever known. It is a pillar of our economy that has held up the dreams of millions of our people. But we also cannot continue to excuse poor decisions. And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars. These companies – and this industry – must ultimately stand on their own, not as wards of the state.
That is why the federal government provided General Motors and Chrysler with emergency loans to prevent their sudden collapse at the end of last year – only on the condition that they would develop plans to restructure. In keeping with that agreement, each company has submitted a plan to restructure. But after careful analysis, we have determined that neither goes far enough to warrant the substantial new investments that these companies are requesting. And so today, I am announcing that my administration will offer GM and Chrysler a limited period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success.
What we are asking is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry. But I am confident that if we are each willing to do our part, then this restructuring, as painful as it will be in the short-term, will mark not an end, but a new beginning for a great American industry; an auto industry that is once more out-competing the world; a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us toward an energy independent future. I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars. …
But our auto industry is not moving in the right direction fast enough to succeed. So let me discuss what measures need to be taken by each of the auto companies requesting taxpayer assistance, starting with General Motors. While GM has made a good faith effort to restructure over the past several months, the plan they have put forward is, in its current form, not strong enough. However, after broad consultations with a range of industry experts and financial advisors, I’m confident that GM can rise again, provided that it undergoes a fundamental restructuring. As an initial step, GM is announcing today that Rick Wagoner is stepping aside as Chairman and CEO. This is not meant as a condemnation of Mr. Wagoner, who has devoted his life to this company; rather, it’s a recognition that it will take a new vision and new direction to create the GM of the future.
In this context, my administration will offer General Motors adequate working capital over the next 60 days. During this time, my team will be working closely with GM to produce a better business plan. They must ask themselves: have they consolidated enough unprofitable brands? Have they cleaned up their balance sheets or are they still saddled with so much debt that they can’t make future investments? And above all, have they created a credible model for how to not only survive, but succeed in this competitive global market? Let me be clear: the United States government has no interest or intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.
The situation at Chrysler is more challenging. It is with deep reluctance but also a clear-eyed recognition of the facts that we have determined, after a careful review, that Chrysler needs a partner to remain viable. Recently, Chrysler reached out and found what could be a potential partner – the international car company Fiat, where the current management team has executed an impressive turnaround. Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to building new fuel-efficient cars and engines here in America. We have also secured an agreement that will ensure that Chrysler repays taxpayers for any new investments that are made before Fiat is allowed to take a majority ownership stake in Chrysler.
Still, such a deal would require an additional investment of tax dollars, and there are a number of hurdles that must be overcome to make it work. I am committed to doing all I can to see if a deal can be struck in a way that upholds the interests of American taxpayers. That is why we will give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement – and we will provide Chrysler with adequate capital to continue operating during that time. If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed. But if they and their stakeholders are unable to reach such an agreement, and in the absence of any other viable partnership, we will not be able to justify investing additional tax dollar to keep Chrysler in business. …
MONDAY MORNING QUARTERBACK.
A very big week in presidential politics. Not so big in California politics.
Obama is preparing a new plan to revive the US auto industry. The CEO of General Motors is out and Chrysler is to merge with Fiat in order to receive future government support.
He is also prepping for his big European trip this week and next week. The president will be at the G-20 (group of 20 advanced economies) summit in London, the European Union leaders meeting in Prague, and the 60th anniversary summit of NATO in Strasbourg.
And, having announced the new US strategy for Afghanistan and Pakistan last Friday, Obama is monitoring international reaction, which in the form of statements is good. The big international conference on Afghanistan starts tomorrow at the Hague in the Netherlands. Another conference on Afghanistan, that of the Shanghai Cooperation Organization, ended over the weekend in Moscow. The US and Iran are participating in each conference.
The G-20 summit in London will focus on how to revive the more advanced economies of the global economy and stave off collapse in the less developed countries. While in London, Obama will engage in separate mini-summits with various figures such as the Russian president and the Queen of England.
The NATO summit, for its 60th anniversary, will focus on the future of the alliance. The European Union summit will focus on the economic crisis and nuclear proliferation.
At each of the confabs, Obama will press the US agenda of greater collective assistance for the new policies in Afghanistan and Pakistan and reviving the global economy.
In California politics, a much quieter week. The coalition backing the six state budget compromise-related inititiatives on the May 19th special election ballot continues to form. Some opposition is emerging, but it’s still unclear how much of it just amounts to talk.
The gubernatorial race is underway, but continues to underwhelm. I’ll have a couple of California 2010 reports during the week.
The Obama Administration has told General Motors and Chrysler that their current restructuring plans are not good enough to receive more US government bailout money.
** OBAMA TODAY. President Barack Obama is in Washington. Tomorrow he leaves on the first extensive foreign trip of his presidency which takes him to Britain, France, Germany, the Czech Republic, and Turkey.
Obama receives his daily intelligence and economic briefings and meets with senior advisors. He announces the new plan for the reeling US auto industry, meets for lunch with Defense Secretary Bob Gates in the Oval Office, signs the Public Lands Management Act and discusses conservation, then meets privately with the House Democratic Caucus this evening on Capitol Hill to discuss his budget.
Secretary of State Hillary Clinton leaves today for the Hague in the Netherlands for the international conference on Afghanistan.
The White House announced late on Friday that First Lady Michelle Obama will address the first graduating class of the new University of California at Merced in May.
Former Governor-turned-Attorney General Jerry Brown, a former Oakland mayor, and Governor Arnold Schwarzenegger joined more than 20,000 last Friday in mourning four Oakland police officers killed by a parolee.
** FROM THE ARNOLD FILE. Governor Arnold Schwarzenegger has no public events today
Schwarzenegger is on vacation this week.
Today is Cesar Chavez Day. The legendary United Farm Workers leader, whose birthday is actually tomorrow, died in 1993 at the age of 66.
** PRIME TIME O: HOW THE OMNIPRESENT PRESIDENT IS DOING. We can’t afford to go back, and things are on course. That’s the meta-message from six days of very high-profile appearances by President Barack Obama, culminating with Tuesday night’s prime time news conference. … From my latest column.
** OBAMA’S RUGGED WEEK. President Barack Obama faces a rugged week with multiple challenges on the economy and in geopolitics. … From my March 23rd column.
** OBAMA’S CALIFORNIA: THE ARNOLD ALLIANCE AND MORE. President Barack Obama is back in the East after a whirlwind visit to California which pointed up his strengths and suggested some things he can do differently. … From my March 20th column.
** CNBC CAN SEE RUSSIA FROM ITS HOUSE, AND OTHER FIN DE SIECLE FOLLIES. CNBC can see Russia from its house. It’s just one example of a fin de siecle folly, albeit one of the the most recent and dramatic.This is clearly end-of-an-era time, but some of the old era standbys haven’t gotten the memo. Or been able to read it. …From my March 16th column.
** OUR MAN IN KABUL: BACKBITING ON THE EVE OF THE NEW OBAMA STRATEGY FOR AFGHANISTAN. With the Obama Administration’s strategic review of the Afghanistan crisis nearly complete — the report should be out sometime next week — the Afghan government seems pretty unhappy. … From my March 13th column.
** OBAMA’S DARING TOUR D’HORIZON: THE NEW PRESIDENT ENGAGES MULTIPLE CRISES AND PROBES FOR OPPORTUNITY. … From my March 11th column.
** WHITHER WATCHMEN? IS THIS BIG, DARK, GEEKY, LEFTY MOVIE THE NEXT COMIC BOOK BLOCKBUSTER? … From my March 9th column.
** THE TROUBLE WITH TWITTER: WHY “TWEETS” ARE LIKE “BLIPVERTS.” … From my March 5th column.
** OBAMA: RIDING WITH HISTORY. (NOTE: As Barack Obama was inaugurated as the 44th president of the United States, this column was the featured column on the top of the front page of the Huffington Post.) … From my January 19th Huffington Post column.
** 24/7 LIVE TV NEWS FEED FROM RUSSIA TODAY. Russia has re-emerged as one of the world’s great powers. Click here for a live TV news feed on your computer, bringing you English-language, jargon-free, fast-paced coverage of global and Russian news from the new Russia Today channel. You probably already know about CNN International, BBC World, and Al Jazeera. Russia Today, which also features culture, entertainment, and sports, is based in Moscow and is owned and operated by the TV Novosti division of Russia’s state news agency, RIA Novosti.
While it’s quite foolish to expect to see, say, criticism of Vladimir Putin on Russia Today, which I know as a former DemRussia advisor, the channel is very interesting nonetheless. With U.S. cable news chattering away as it does, this sort of respite can be informative. The NWN live link to RT does not constitute an endorsement of the channel’s views. It’s presented as an otherwise unavailable new media window.
** 24/7 LIVE TV NEWS FEED FROM AL JAZEERA. With the US entangled in two wars in the region, it’s valuable to keep up with news and perspectives from the leading Middle Eastern-based TV news network. Based in the Gulf Arab state of Qatar, Al Jazeera is very influential and more than a bit controversial.
Click here for a live TV news feed on your computer. The NWN live link to AJ does not constitute an endorsement of the channel’s views. It’s presented as an otherwise unavailable new media window.
** SCHWARZENEGGER’S CALIFORNIA. Here is my series of five columns on the governorship of Arnold Schwarzenegger for the Los Angeles Times in debate with Pulitzer Prize-winning former Times reporter/editor Bill Boyarsky, whose columns are also included.
Among them is what I’m sure is the first piece examining Schwarzenegger’s legacy as governor of California. Since he will actually be governor of California until 2011. No technology known to be disruptive to the space/time continuum was used in its preparation.
** TRACK GLOBAL AND NATIONAL ENERGY PRICES IN NEAR REAL TIME VIA BLOOMBERG ENERGY MARKET WATCH. Having crashed over $147 for yet another record on July 11th, crude oil is trading in the range of $50 to $51 per barrel.
This is up about $16 a barrel since enactment of the Obama economic recovery program, on anticipation of increased economic activity down the line, and on increased implementation of already agreed upon OPEC production cutbacks to support the price.
Your posts are welcome in the Forum.