Real News of the Day: Obama asks GM CEO Rick Wagoner to be scapegoat

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Bernie Madoff and Rick Wagoner don’t seem to have a lot in common on the surface.   Madoff pulled off the most notorious Ponzi scheme in American history.  Wagoner was the legitimate Chief Executive Officer of General Motors, the second largest car manufacturing company in the world.   Madoff, bad.  Wagoner, not as bad.

Wagoner fucked up, but he didnt cause the financial crisis.

Wagoner fucked up, but he didn't cause the financial crisis.

But they are about to linked in the discourse of the American media machine as those people that caused our economy to turn to shit.  Those people that caused your 401k to crash.  Those people that need to pay for what they did with jail time and a good public firing.

But Madoff and Wagoner are not to blame.  Did they fuck up?  Certainly.  But do their hijinx embody any of the systemic problems that caused the global financial crisis?  Hell no.

What Madoff did wrong: Stole money.  Plain and simple.  Madoff’s actions were against the law and he will spend every day for the rest of his life in prison because of them.

What Wagoner did wrong: Lost tons of money because of promises made to former and current workers in the auto industry.  The loss of money in GM spans several generations.  Meaning this:  GM has a lot of former employees that have pensions.  GM is obligated to pay those pensions.

Wagoner took over North American operations at GM in 2005.  He had a hell of a lot of debt to make up and closed several GM plants across the United States to curb costs.  Wagoner may be at fault for not predicting the boom of the hybrid car market.   But it is unfair that he should be fired when the executives of some of the major financial institutions that caused the economic crisis are still living large.

What actually caused the current economic crisis: The derivatives market and enormous bets by the biggest financial entities in the world.  It is unconscionable that the derivatives market is still open.

Why politicians are deflecting blame: They don’t want to change the rules of Wall Street.  Tim Geithner and the Obama Administration believe that all of the credit default swaps and naked CDO wagers should be completely legal.  At least their current actions tell me that much.   This whole thing is going to happen again if we don’t start making this shit illegal.

Next week, we’ll take a closer look at who and what caused actually caused the economic meltdown.  Until then, I recommend reading Matt Taibbi’s article that I posted earlier.  You can find it here.

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One Response to “Real News of the Day: Obama asks GM CEO Rick Wagoner to be scapegoat”

  1. adam hartung Says:

    This is what happens when you lose your position as #1. It doesn’t take long for people to start envisioning a world without you. GM started on the road to irrelevant years ago by focusing internally rather than on the market – missing all major shifts and becoming also-ran. Obama’s team is telling everyone (auto and banking) that if you can’t prove you know where the market is heading and demonstrate you can get back in front, then there’s little reason to support you.

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