Dueling bailouts: Banks vs. cars

The Obama administration’s “tough love” with GM and Chrysler is “painful and risky but probably for the best,” said James Saft in Reuters. So why isn’t Obama treating the “similarly failing” banking industry to the same hard line? Why threaten automakers with bankruptcy and oust GM CEO Rick Wagoner but coddle still-“entrenched” Wall Street executives, when both have “come begging at the public trough”?

It’s too early to say how Obama will treat banks that fail his team’s stress tests, said James Surowiecki in The New Yorker. But the apparent “double standard” so far has an “obvious explanation”: Banks have a viable road to recovery; GM and Chrysler don’t, at least not without a bankruptcy-like “radical restructuring.” It may not be fair, but “it’s not irrational,” either.

Obama’s “dramatic show of muscle” might help Obama’s prospects more than GM’s, said David Broder in The Washington Post. Until he “zapped” Wagoner, there was a growing sense in Congress that he was “a guy you could roll.” If Obama sticks to his guns, this—like President Reagan’s show of force with the striking air traffic controllers—could be the moment he turns that around.

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