[T]oday I'm announcing that my administration will offer GM and Chrysler a limited additional period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional taxpayer dollars. During this period they must produce plans that would give the American people confidence in their long-term prospects for success.
Now, what we're asking for is difficult. It will require hard choices by companies. It will require unions and workers who have already made extraordinarily painful concessions to do more. It'll require creditors to recognize that they can't hold out for the prospect of endless government bailouts.
That last sentence got me. "The prospect of endless government bailouts"? President Obama knows endless government bailouts of large-scale organizations have been the US government's plan for over a year now, with one big exception (Lehman) that proved the rule. Furthermore, a government-led bailout should be the plan. To me, the way for America to have a weak recovery out of this recession, relative to the rest of the world, is to destroy our credit-worthiness by reneging on all our debt. The credibility of our economic power is on the line. Our private organizations are so over-leveraged and un-productive that they can't get themselves out of debt. It's up to the government to fund and re-structure them. The question will be, what will the government create out of all this responsibility?
Anyway, I like it better when political leaders square with the public and make the case on its merits. Especially in this case, when the argument for government responsibility is so compelling. I understand his reticence. The general belief that 'government intervention is bad' has appeared to exist for decades now, and may still hold sway. But maybe not. Nobody knows. Conditions have changed. But there is uncertainty about the general beliefs, so the President plays it safe. My hunch though? He's playing it too safe. He has the credibility right now to take over institutions and create them anew. Does he recognize this? Does he have the confidence he can successfully walk the country through that door?
Read all of the President's remarks on the auto companies here.