Wall Street took a big dump yesterday after three weeks of gains and the culprit, depending upon whose ax you're helping grind, is General Motors or the White House.
"If the government would stop doing the private sector's work, I think we might be a little better off," whined one analyst who took unkindly to the tough love President Obama dished out to GM and Chrysler, as well, "But at this point it might be too late."
The analyst has it exactly backwards.
If GM had showed more interest in producing a viable recovery plan than chugalugging billions of dollars in taxpayer dough this day of reckoning would not have arrived -- or at least not with such a bang.
Where the analyst might have something is the "too late" thing.
Having proved itself not too big to fail, GM is now probably looking at bankruptcy, but methinks Obama is hedging that bet -- and putting the lie to the notion that he wants the government to run the automaker -- by putting its hands to the fire now to reduce the chances that it will be forced to take over later.
Obama and his advisers certainly understand that the government's record when it comes to nationalization is mixed. (Its efforts to run railroads have been notable failures.) And that they must be able to better explain why the ouster of GM CEO Rick Wagoner and his board was a pre-condition for more government bailout money but the managers of failing banks and other financial institutions that have received many times more money than automakers have been virtually unscathed.
Wagoner had begun to turn GM around with some decent new products after 15 years years of lousy "leadership" while the automotive world was stealing a march on him, but these products are far too little, far too lacking in innovation and far too late, while Wagoner himself continued to be accountability averse and his board tone deaf regarding the hash he had made of things.
Meanwhile, the recovery plan that Wagoner fashioned was laughably inadequate.
He believed that GM could remain far larger than was realistic in today's hyper competitive global market. His recovery plan did not cut deeply enough and assumed the best at every turn, including hanging on to its already diminished market share and even growing while projecting losses for years to come.
What we have here is a failure of leadership all around starting with Wagoner and his board of directors to the enablers in Congress led by a Michigan delegation that looked the other way for years, to the Bush administration and congressional Democrats, who proved to be better at panicking and throwing our money at the mess than than getting tough.
President Obama gets a pass, but only for the time being.