Obama’s strong words on GM may come back to bite him (BBC):
“Our auto industry is the foundation for economies all across the Midwest,” Mr Obama said.
“Had we allowed GM or Chrysler simply to liquidate that would have been a huge anti-stimulus on the economy as a whole, and could have dragged us even deeper into recession or even depression.”
Now its looking like GM will go bankrupt after all (Huffington Post).
Both GM and Chrysler are in danger of liquidation. Their loss will be terrible, and it will hurt the economies of the midwest, surely. But a depression? That’s on par with Biden’s stay off planes and trains gaffe. Since the so called invisible hand of the market seems to be driven largely by fear or greed, Obama’s heightened rhetorical flourish may come at an unfortunate cost: the realization that economic prophecies are self-fulfilling. Let’s hope not.