Uncle Sam in the Rumble Seat

The American Century ends today with the death of General Motors as we knew it, the free-market engine that powered an economy and a culture to global preeminence, selling physical and social mobility to millions who had previously lived in small insular worlds.

The news about bankruptcy and hope for renewal with taxpayer money is disorienting to generations who came of age in an America where success was defined by whether you drove a Chevrolet or a Cadillac and how often you could afford to trade it in for the newest model.

That superficial stability, that innocence is as long gone as the first car I ever owned after coming home from World War II, a used 1938 Packard coupe with a rumble seat.

The government takeover of General Motors while trying to maintain the appearance of distance is reminiscent of that rumble seat, an upholstered perch behind the body of the car, the back of which hinged up from where the trunk would normally be to seat passengers in the open air away from the driver.

That image will serve for the Obama Administration's posture of taking ownership but insisting that it won't exercise day-to-day management ("a fine line,” says Lawrence Summers, co-head of the auto task force, “but we think it's manageable”).

Back in the day, rumble seats were popularly known as "mother-in-law" locations, to symbolize barriers to back-seat driving from family members whose unwanted presence had to be endured.

The separation worked for a while, but rumble seats eventually went out of style because of too much exposure to the elements for their occupants.

Riding shotgun on the new General Motors may make Uncle Sam feel that way, too.

Saying "Enough" to the Banks

As Timothy Geithner dithers, the Congressional watchdog on the bank bailout, Elizabeth Warren, is previewing a much tougher attack.

"We want to ensure that the Treasury gives the public an alternative approach," she tells the Guardian about her worries that banks won't recover while being fed subsidies. "When are they going to say, enough?"

"The very notion that anyone would infuse money into a financially troubled entity without demanding changes in management is preposterous," she adds.

Professor Warren, head of the oversight committee monitoring the government's Troubled Asset Relief Program, will call for shareholders to be "wiped out." saying, "It is crucial for these things to happen. Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade."

Geither meanwhile is on TV hemming and hawing about possible "restructuring" of banks in the future as White House economic adviser Lawrence Summers plays down his $5.2 million gig last year with a hedge fund business as "a part-time job."

The Times runs an OpEd argument that the crisis needs to be "tackled head-on, not by propping up failing banks" but seizing them, stripping toxic assets and auctioning them off.

It's looking more and more like the most crucial restructuring needed may be at the White House economic team. When will the President say "Enough"?

Obama's Jobs Program

White House economic efforts will focus not on "public works but, rather, investments that will work for the American public," according to President Obama's head of the National Economic Council.

Lawrence Summers writes in the Washington Post: "The president-elect has insisted that investments proposed in the recovery plan meet standards much higher than has been traditional. There will be no earmarks. Investments will be chosen strategically based on what yields the highest rate of return for the economy and monitored closely not just by officials but also by the public as government becomes more transparent. We expect to evaluate and to be evaluated rigorously to ensure that Washington is held accountable for how tax dollars are spent."

In describing the previously announced goal of creating 3 million new jobs, Summers adds little detail but reveals that more than 80 percent will be in the private sector, including environmental technology and health care in addition to public works.

Arguing against "short-term policies that generate consumer spending," Summers says:

"Laying the groundwork for recovery and future prosperity will require shedding Washington habits. We must measure progress not by the agendas of interest groups but by whether the American people experience results. We must focus not on ideology but on drawing the best ideas from all quarters. That is why, for example, in key sectors such as energy, Obama is pushing for both public investments and the removal of barriers to private investment. It is also why his plan relies on both government spending and tax cuts to raise incomes and promote recovery."

From January 21st on, we will find out if legislators and lobbyists got the memo.