Auto Intervention Puts Obama on Risky Road

Prez may end up taking the flak from restructuring's tough choices
By Rob Quinn,  Newser Staff
Posted Mar 31, 2009 5:46 AM CDT
Then-Democratic presidential candidate Barack Obama, D-Ill., shakes hands with workers at the GM Flint Engine South plant in Flint, Mich., June 16, 2008.    (AP Photo/Alex Brandon, file)
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(Newser) – President Obama's intervention in the auto industry puts him on a risky road through uncharted territory, David E. Sanger writes in the New York Times. Making decisions for an industrial giant like GM is a totally different enterprise than stepping in with the likes of AIG, Sanger writes—especially when the feds' promise to back warranties makes it a guarantor for blown transmissions as well as loans.

Obama's argument that this level of government intervention is needed to save America's auto industry may well be correct, Sanger contends, but it carries huge political risks for the president. If restructuring means Detroit's workers have to accept reduced wages and benefits, Sanger argues, "it will be Mr Obama—not GM’s management—who will be blamed."