Frank Adds Media to List of Parties Responsible for Automaker Woes
The media and politicians have scrambled to assign blame for what has caused the Big Three automakers – Ford (NYSE:F), General Motors (NYSE:GM) and Chrysler (NYSE:DAI) – to request a taxpayer-funded bailout.
The culpability for the Big Three’s woes has been spread around from the automakers not building cars people want, to the unions and the automakers for negotiating unsustainable collective bargaining agreements (although not as much in media circles) and the politicians for not being more proactive in trying to engineer the beleaguered automakers success.
However – House Financial Services Chairman Rep. Barney Frank, D-Mass., said he thought the media also deserved some blame – for not “distinguishing itself,” in his opening remarks of hearing featuring the CEOs of the big three automakers on Dec. 5.
“Yeah, a lot of mistakes were made – too passive,” Frank said. “The auto companies made mistakes. The unions made mistakes. The politicians made mistakes. The media hasn’t always distinguished itself, although you’re not supposed to say that.”
However, Frank claimed the point of the hearing was not to assign blame to a particular party for why the American automakers are no longer operating in a manner that assures their long-term sustainability.
“The consequence of all those mistakes is that the country is to some extent held hostage,” Frank said. “We need to free the country and that’s the focus. Yes – there have to be changes that are made, sacrifices made. But the focal point is not to punish those who made the mistakes. It is to prevent further damage to the country and it’s in that context this committee will proceed.”
Earlier in Frank’s remarks, he did specify some of the mistakes and assigned blame – including to Congress for not raising CAFE standards – a tactic the CATO Institute argued would do little to reduce oil consumption.
“One of the things I do want to note – people have said, ‘Well, a lot of mistakes were made. The companies made mistakes, Congress made some mistakes – they didn’t increase CAFE standards, etc,’” Frank said. “Yes, a lot of mistakes were made. The relevance of that – it’s partly this: It would be nice if we could line up all the people that made the mistakes and punish them in away that would have no impact on the innocent.”
Frank likened this to how in school a teacher would punish an entire class with extra homework for one student misbehaving.
“I don’t want to give the whole country extra homework because auto executives in the past misbehaved,” Frank said. “We have to separate out unhappiness and anger over things not done in the past from the consequences now and that’s what we are focused on."
