Why Save Financial Industries And Not Real Industries?

Robert Reich has a great article at Talking Points Memo Cafe discussing why financial companies seem to be favored for assistance in this crisis, while real industries like the automotive companies are denied.

Why We're Rescuing Wall Street and Not the Auto Industry: Citigroup Versus General Motors
By Robert Reich - November 22, 2008, 1:29PM

Read it.

Viewed from Wall Street, Citi is too big and important to be allowed to fail while GM is simply a big, clunky old manufacturing company that can go into chapter 11 and reorganize itself. The newly conventional wisdom on the Street is that the failure of the Treasury and the Fed to save Lehman Brothers was a grave mistake because Lehman's demise caused creditors and investors to panic, which turned the sub-prime loan mess into a financial catastrophe -- a mistake that must not occur again. So, by this view, the government must do everything and anything to keep Citi alive. But GM? GM is just ... jobs and communities.

"GM is just ... jobs and communities." I don't know if you have been following the Congressional hearings. Did you pick up a "tone". It was infuriating.

Reich makes a great point. "...Wall Street's self-serving view of the unique role of financial institutions is mirrored in the two agencies that run the American economy -- the Treasury and the Fed. Their job, as they see it, is to keep the financial economy "sound," by which they mean keeping Wall Street's own investors and creditors reasonably happy."

Why don't we have a federal agency that is focused on manufacturing industries with a view to recognize unfair foreign competition and supporting a strong national manufacturing base?

Robert Reich is one of those people I always stop to watch on the pundit shows. He would be a great dinner guest. I wonder what role he might have in the new administration.