The Departures Continue

Slowly but surely, the members of President Obama’s economic team are hitting the road.  In July the budget director left the Administration, earlier this month Christina Romer departed, and now Larry Summers, viewed as one of the President’s most senior economic advisers, has announced that he is leaving.  President Obama has praised all of them as brilliant, capable, moving things in the right direction, etc. — but the reality is that the recession continues, economic forecasts are downbeat, unemployment and foreclosures rates are extraordinarily high, and consumer confidence is scraping the bottom of the barrel.  If that is the President’s definition of brilliant stewardship, what would abject failure look like?

I think the President and his political team have the savvy to realize that, given the lame performance of the economy and the unkept promises of the stimulus bill and other economic initiatives, heads need to roll.  Treasury Secretary Tim Geithner undoubtedly will soon follow Romer, Summers, and others out the door, so that the President can make a show out of bringing in a “new economic team” with “new ideas” to deal with his plummeting popularity and the nagging suspicion among many people that President Obama might not be up to the task.

The timing is obviously coincidental, but the poignant question posed to the President at his recent town hall forum about middle class citizens worrying about returning to a franks and beans existence is a powerful indication of what average Americans are thinking.  The President needs to show that he understands what they are saying and is acting on it, and he can’t do that with the same group of advisers who are widely viewed as presiding over a failed — indeed, disastrous — economic policy.

The GM Shell Game

The New York Times recently ran a good article on GM’s blatant shell game in claiming that it had “repaid” “in full, with interest” the loan it received from the federal Troubled Asset Relief Program.  GM ran a TV ad boasting of the loan “repayment,” and Treasury Secretary Tim Geithner also touted GM’s “repayment” as indicating that the company “is on a strong path to viability.”

As the Times article notes, it turns out that the “repayment” was a sham, because GM used money from a taxpayer-financed escrow account to repay the TARP loan.  Check out the protestations from GM and the Treasury Department that their statements about the “repayment” have not been misleading — particularly the statement of a “senior adviser” to Geithner, who says:  “We have never not been clear about exactly what we paid, exactly the terms of the investment. I’m finding it hard to find anyone obfuscating about this.”  Double negative aside, only a federal bureaucrat would claim not to see something misleading about bragging about “repayment” of a loan from the federal government without disclosing that taxpayer funds also were used to make the “repayment.”

Of course, a key remaining question is whether taxpayers paid for the deceptive GM commercial touting the phony loan “repayment.”  Since GM seems to be largely propped up by tax dollars, the answer is probably “yes” — which is itself infuriating.