Obama May Have Already Stepped in It With the Auto-Industry Bailout

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In their not-so-private private meeting on Monday, almost-president Barack Obama asked — nay, demanded — that real president George Bush help out the teetering auto industry, according to leaked info. And Obama's allies in Congress, Harry Reid and Nancy Pelosi, called yesterday for the Treasury to give a chunk of the $700 million bailout to Detroit — with strings attached, of course. And if they don't, well, Congress will just have to make them, and Bush can veto it if he has the balls. However, as Obama, Bush, the Treasury, and Congress meet in an overlapping mosh pit of power — with legacies and political capital on the line — the idea of an auto-industry bailout, even among its supporters, isn't sitting so well.

• Thomas Friedman thinks that "a combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of" the trouble the car industry has found itself in. Despite it all, he's "as terrified as anyone of the domino effect on industry and workers if G.M. were to collapse." But we can't give them a blank check, and should demand "a plan for transforming every vehicle in its fleet to a hybrid-electric engine with flex-fuel capability." And maybe someone should consult "Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year." [NYT]

• Douglas Olin believes that if we're going to bail out the auto industry, we must "insist on returns that benefit society as a whole, not merely Big Three shareholders, management and employees," such as "a car that gets at least 100 miles per gallon." [LAT]

The Wall Street Journal editorial board writes that Obama and Pelosi are "mandating that the Big Three build 'green' cars," but "if consumers really wanted green cars, no mandate would be necessary." If they actually wanted to help Detroit, they would get rid of the "two fleet rule" and CAFE standards altogether. Obama's campaign has fooled the public into expecting "miracles, reconciling all opposites, turning all hard choices into gauzy win-wins," but "his honeymoon is about to end before it begins." [WSJ]

• Rick Klein and Hope Ditto note that Obama could have sidestepped the Detroit bailout question with "the one-president-at-a-time line." Obama could "notch a legislative victory even before he's president," but he'll still own the issue "if it fails to pass, or if it passes and then fails to work, or even if it works but fails to impress." [Note/ABC News]

• Jonathan Weisman, Greg Hitt, and John D. McKinnon call "the crisis in Detroit" an "early test of [Obama's] leadership," something he would have liked to avoid, "potentially giving the president-elect responsibility for an emergency before he has any real authority to deal with it." [WSJ]

• Frank James says Obama is in an "unavoidable position" of having political capital without officially controlling "the levers of power," while President Bush has no political capital but "still has the power of the presidency." That GM says "it can't wait for Obama's January inauguration to receive cash assistance" reveals "a remaining flaw in the American way of changing presidents." [Swamp/Chicago Tribune]

• David M. Herszenhorn and Carl Hulse say that "Democrats could be headed for a confrontation with Mr. Bush and [are] setting the stage for a dramatic lame-duck session," but Obama "does not intend to play a leading role in the session." He could potentially cast a vote, though, "if it was needed." [NYT]

• Megan McArdle notes that the big difference between bailing out the financial industry and bailing out the auto industry is that neglecting to do the former could "risk that they would take us down with them." Additionally, GM has "been headed for this moment since 1973," and government money won't be able to fix its problems. GM "needs to go into bankruptcy, which is the only possible way I can see to adjust its legacy labor problems, and possibly provide sufficient shock to the corporate culture to allow the company to make a competent car." [Atlantic]

• John Derbyshire sees too many creepy similarities "to the travails of the British auto industry in the 1960s," which ended with the "horrible failure" of nationalization. [Corner/National Review]

• Joe Wiesenthal thinks this is a chance for congressional Republicans "to draw a line in the sand" and stand in opposition to the first of "a series of big government votes," if they're to "chip away at Democratic gains." [Clusterstock]