washingtonpost.com
'Overhaul' details rescue of U.S. automakers

By Peter Whoriskey
Washington Post Staff Writer
Thursday, September 2, 2010; 11:00 PM

In one of the first detailed insider accounts by a member of President Obama's team, a chief architect of the federal bailouts for General Motors and Chrysler has penned a 300-plus page description of the policy improvisation performed by the administration as the economy swooned at the outset of the president's term.

Steve Rattner, the Wall Street financier and Democratic Party stalwart drafted to lead the automakers' rescue, had a front-row seat in some of the most important disputes within the administration, including those over government intervention in private business, the politics of bailouts and who is allowed to speak at meetings.

The narrative of "Overhaul" offers a generally charitable view of the protagonists, though in the hurly-burly of White House jostling there are unflattering episodes, and these undoubtedly will draw the most attention.

Chief of Staff Rahm Emanuel, when reminded that tens of thousands of jobs are at stake, utters a common profanity expressing disdain for the United Auto Workers.

White House senior adviser Larry Summers is brilliant but imperious toward a dissenting economist, Austan Goolsbee, who dares to speak up at a meeting. Summers "explodes" and tells Goolsbee in the corridor: "You do not relitigate in front of the president!"

Michigan Gov. Jennifer Granholm (D), dejected about the possibility the automakers would have to file for bankruptcy, tells Obama in a voice barely above a whisper: "I hope you know what you're doing."

The best Obama line may be this one, as General Motors and Chrysler approached financial meltdown in November 2008: "Why can't they make a Corolla?" he asked his advisers, according to the book.

"We wish we knew," his advisers reply.

Although the book offers a generally favorable view of the administration - and puts Obama on a par with "the best CEOs I had spent time with on Wall Street" - it has touched a nerve among some of Rattner's former colleagues. The assertion that Emanuel had spoken so cavalierly about autoworkers, a key node of Democratic support, was quickly rebuffed by the White House and the union president Thursday.

In an e-mail, UAW President Bob King called it "baloney."

"The hard work of this President, Rahm Emanuel and the Administration literally saved the auto industry," King said.

A senior White House official similarly cast doubt on the account.

"Throughout the entire process that saved the auto industry, Rahm tirelessly defended and advocated on behalf of the autoworkers," the official said, declining to be identified because the official had not read a final version of the book. "Any suggestion to the contrary is simply ridiculous."

A good portion of the book is a reflection of an outsider's reaction to the ways of Washington. But Rattner comes not as "Mr. Smith" from the movies, but from the glitz of Wall Street. Throughout the narrative, he notes the drab decor and habits of the capital.

He says that Summers's conference table is "government-issue imitation Chippendale." His own couch is "red fake leather." In New York, he often visited the Four Seasons for lunch, he says. In Washington, the typical fare was a tuna sandwich at his desk.

There are more significant observations, however, about the constraints that public service puts on people.

Rattner, like other Auto Team members, worked long hours and left family behind in other cities. He spent $400,000 in legal fees in passing the government's vetting process. And rules meant to make it difficult for lobbyists to get a job with the government also made it difficult for him to hire experts in the auto business.

Before he was a financier, Rattner was a reporter for the New York Times, and the book reads well.

But one of its weaknesses is that Rattner, though undeniably present for some of the critical moments of the bailout, joined the Auto Team after the initial bailout by the Bush administration and then left in July 2009. It is unclear within the account how he knows what was said at meetings before and after his stint. Rattner writes that the account is based on more than 150 interviews, but he declined to name the sources.

Rattner's departure from the administration was hastened after federal investigators began probing whether he had paid a middleman to win a lucrative contract from New York's pension system while he worked on Wall Street.

No charges have been filed. The investigation does not feature prominently in the book.

The Washington Post received an uncorrected proof from the publisher, Houghton Mifflin Harcourt. The book is expected to be available in bookstores soon.

Post a Comment


Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.

© 2010 The Washington Post Company