The tone is fawning, as one would expect from the New York Times. But the story, about the administration’s willingness to let the automakers go bankrupt, at least suggests there is an outer limit to the trillions of dollars President Barack Obama is willing to spend. Reports the Times:
By the time he sat down in the Oval Office to brief Michigan’s Congressional delegation, President Obama had made up his mind. Days earlier, he had decided to oust the head of General Motors and give it and Chrysler weeks to fix themselves. If they could not, he was prepared to let them go bankrupt, a prospect fraught with economic and political repercussions.
Some lawmakers on the conference call that Sunday night last month thought he was bluffing. No president had ever let one of the Big Three car makers go bankrupt. Surely Mr. Obama would not be the first.
“You need to say that to get people to the table, and we totally understand that,” Representative Sander M. Levin, Democrat of Michigan, told Mr. Obama, according to two people privy to the conversation.
Mr. Obama corrected him. “I don’t want you to leave with that impression,” the president said. “I’m telling you that because it’s a real possibility.”
Perhaps the most significant admission comes from Treasury Secretary Timothy Geithner, who has yet to prove he’s up to the job:
Mr. Obama had reached what Mr. Geithner called “a fork in the road judgment” on Chrysler that would not be popular with his union backers or his Michigan allies. “We were not prepared to spend what they needed to stand alone, because they were not viable,” Mr. Geithner said.
Let’s hope a similar sense of realism occurs elsewhere in the administration and the president starts to shut off other spending spigots. At least before we are talking about quadrillions instead of trillions of dollars!