Jonathan Cohn
Senior Editor

Another (mostly) Positive Verdict On The Plan For Detroit
March 31, 2009

John Paul MacDuffie is an associate professor of Management at the Wharton School, University of Pennsylvania, and co-director of the International Motor Vehicle Program (IMVP). We asked him for his thoughts on President Obama's plan for the auto industry. The new auto industry plan represents more aggressive action than we've seen before; government isn't just writing checks based on proposals from the automakers. But the new plan still stops well short of true nationalization; government won't be managing these companies. Obama, in other words, has found a middle path.

"reconciliation" = Bad. "majority Rule" = Good.
March 31, 2009

The debate over the budget has moved to the Senate floor. And, not surprisingly, a major source of contention is the possible use of reconciliation rules to pass climate change legislation, health care, or both. For those who haven't followed this debate, reconciliation allows the Senate to pass measures with just a simple majority, since time and amendments are limited with no possibility for filibuster. Many Democrats favor this approach; a few oppose it, as (to my knowledge) do all Republicans. The budget proposal under consideration in the Senate has no reconcliation instructions.

Planes, Trains, And Automobiles: Sometimes Bailouts Work
March 31, 2009

In today's New York Times, David Sanger analyzes President Obama's plan for the ailing domestic auto industry. And the historical precedents, Sanger suggests, are not encouraging: "In the past, the United States government had briefly nationalized steel makers and tried to run the railroads, with little success." I claim no particular expertise on either of those episodes. But Phillip Longman, a fellow at the New America Foundation, does.

Obama In The Driver's Seat
March 30, 2009

President Obama just finished speaking about his plans for the ailing domestic auto industry. And, as reported already, he is offering some pretty tough medicine. Obama's auto task force has determined General Motors can become a viable company. But it will take more radical restructuring, starting with more concessions from creditors, unions, and dealers. GM gets 60 days to make that happen. The transformation in management began over the weekend, with the ousting of GM CEO Rick Wagoner.  The verdict on Chrysler is less sanguine: The task force has decided it cannot stand on its own.

Gm Gets A Lifeline; Chrysler Gets 30 Days
March 30, 2009

Various outlets now have complete details on Obama's plan for Chrysler and GM, as provided in background briefings by administration officials. The gist is pretty simple: The administration believes that GM can survive--and, indeed, thrive--with the proper restructuring, so it will provide up to 60 days of working capital as the company revamps its management and negotiates with stakeholders. Chrysler, though, is another story. The administartion does not believe the company can ever be viable on its own.

Obama's Speech On Detroit: What To Watch For
March 29, 2009

  This morning President Obama will formally announce his plan for Chrysler and General Motors, the two ailing automakers seeking billions of dollars in additional assistance.* But one element of the administration’s strategy leaked out on Sunday afternoon: GM CEO Rick Wagoner is history.  As a condition for extending more financial assistance, Obama demanded that Wagoner resign. The administration relayed this request on Friday. Wagoner officially stepped down on Sunday.

Baucus Answers The "not Now" Crowd
March 27, 2009

Max Baucus just gave a speech on health reform at the Center for American Progress. And it served as a clear rejoinder to those who say health care reform must wait, because of the economic crisis: The picture is bleak.  Deficits are higher and continue longer than we had expected.  The economic conditions facing our country are severe.  Unemployment is rising.  Families are struggling to make ends meet.  Many are losing their homes. But this economic uncertainty does not dampen the urgency of health care reform.

A Different Take On Detroit's Predicament
March 27, 2009

The International Motor Vehicle Program (IMVP) is an international consortium of scholars--among them Wharton's John Paul MacDuffie and Case Western's Susan Helper, who collaborated on an article about the auto industry for TNR a few months ago. The consortium held its annual meeting earlier this month in Tokyo. There, the members hashed out a formal statement on the industry's predicament and what to do about it. And at least some of the recommendations confound what is becoming conventional wisdom.

Obama Previews His Deal For Detroit
March 27, 2009

Sometime very soon, probably on Monday, we'll find out whether President Obama is prepared to keep Chrysler and General Motors going with further government assistance. And it looks like the answer is "yes," albeit with under some very strict conditions, following about a month of study by the administration's twelve-person task force. Here's what the Wall Street Journal has learned: Interviews with task-force members indicate that the administration doesn't want to let General Motors Corp. and Chrysler LLC slip into bankruptcy protection, a course advocated by some critics of the industry.

What Universal Coverage Offers The Insured
March 26, 2009

One of the biggest challenges in health care reform is winning over people who already have insurance. Somebody who lacks coverage, or is on the verge of losing it, will have an easy time understanding why reform will be make his or her life better. Somebody who already has insurance is more likely to wonder, what's in it for me? A new paper from the Center for American Progress Action Fund helps answer that question. The author is health policy expert Peter Harbage. The subject is the high administrative costs we find in the individiual insurance market.