GM Bailout and understanding Harper and Obama

Their worst critics have them right. Stephen Harper may want to turn working families over to the mercies of global capitalism, and Barack Obama may want Washington to direct the destiny and socialize a greater share of the profits of corporate America. Okay, their secret dreams seem to be under control. But, when we’re not watching, are they not busily advancing their respective radical agendas? It would be intolerably boring to leave these concerns to history. Extravagant accusations will continue. However, sometime facts come forward that undermine both dark notions.

The nationalization of General Motors surely will stand as a dramatic policy departure for both countries and should tell us much about the ambitions of both leaders. In a preview of his pending book, “Overhaul” Obama’s “car czar,” Steven Rattner, is emphatic on one important element in the negotiations: it was the Canadian team that insisted on job guarantees, in fact, the US government saw the idea as “excessive interference” and reluctantly went along—“we gave them that and took one for ourselves.” (http:www.theglobeandmail.com/report-on-business/managing/the-lunch/obama-car-czar-steven-rattner/article 1738667)

Context is important. Harper faced centre-left parties that would go ballistic if he didn’t drive a hard bargain. And Obama didn’t really have to worry about a Republican opposition that was generally disdainful about the very idea of bailing out the auto industry (and had already voted the money necessary to do it). Nevertheless, the United Auto Workers, whose jobs were up for grabs, provide vital political support to Obama and none to Stephen Harper. The job guarantee provision, nevertheless, was apparently at Canada’s behest.

Those convinced Obama is a closet socialist will face another awkward moment later this fall if he actually follows through with his plan to start selling off government shares in General Motors. This will not win him new friends within the UAW. But it will offer an important signal to the market place that he wants to return to the broad pre-recession role for the federal government in the American mixed economy—one of public regulation and private risk-taking. Ironically, Stephen Harper will then have another chance to be an economic conservative, compliments of Barack Obama.