In his 60 Minutes interview Sunday night, Fed Chairman Bernanke said he saw “green shoots” indicating the beginnings of economic recovery. He didn’t expand on where he saw these, but some of the news from banking, tech, and even real estate have been promising.
Not many people have said or seen good things about the mess in Detroit, which is why this morning’s Wall Street Journal’s report on the Steve Rattner-led review of GM and Chrysler is encouraging. For a month now, since the car companies produced their strategic plans, very little has been said by anyone within the Obama Administration, and teams of bankruptcy lawyers have been assembled. The indications in the Journal’s report that there is an alternative path underscores that while Chapter 11 remains a potential future for either or both of the company, the restructuring facilitated by taxpayer money might yet put Detroit back on the road to viability without bankruptcy. Such a development would be part of the “return to growth” agenda the Obama Administration should be pursuing with singular focus.
Many conservatives are impatient with the process of bailout and want only to start the economic guillotine, and not just for GM and Chrysler, but for AIG, Citigroup etc. They underestimate the chaos this would cause, and not just at home but around the world at a time when economic stability is particularly necessary if our allies are going to be able to continue as full partners in the war against jihadism. When Son of Tarp appears, conservatives should be prepared to condition their support for it on guarantees of tax policies that promote growth and on a delay by at least three years of any cap-and-trade experiment that will be an unnecessary and large shock to the fragile recovery Bernanke sees taking root.
The opportunity to conclude an armistace with the Obama Administration that will last through 2010 is going to arrive shortly. GOP leaders should start demanding now that it be comprehensive and that it emphasize growth across the board. Such an agreement may not be possible given the laundry list of ambitions the president has articulated from health care to carbon taxes, but setting up an “economic growth first” front is a key step for the Congressional GOP.