Now, Obama 'Owns' General Motors

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You couldn't know so many things in such a confusing time."

Taking a Bold Risk with His Authority

In both cases, the Presidents were "throwing everything against the wall and seeing what sticks," Reeves said. "I think Obama is saying, 'Someone has to be in charge,' and I think he's right. If he was just sitting back, he'd be toast. This country wants a sense that someone is in charge."

But they also want results, and that's where Obama's chutzpah on GM and Chrysler may come back to hurt him, well beyond his auto-industry policy. If the automakers dodge Obama's deadlines, perhaps by finding political cover with Congress, it could undermine his ability to take similarly bold stands on other issues.

"On the most obvious level, if you issue threats or you intimidate business, and in the end business just does what it wants, you lose some of your political capital," says Julian E. Zelizer, a professor of history and public affairs at Princeton University's Woodrow Wilson School of Public & International Affairs. "It will suggest the business community is not so frightened of Obama at a time he needs to be able to lean on them."

Jury Is Still Out

That happened to FDR, too. One of his signature early initiatives, the National Recovery Act, sought to impose voluntary production levels to bring the country out of the Depression. It flopped, even before the Supreme Court declared it unconstitutional, Zelizer says. "Sometimes a President can't use the power of persuasion to get business to act even in a time of major economic crisis," he said.

Not that the NRA's failure hurt FDR's legacy in the long run, of course. But the verdict is far from clear at this point for Obama's GM-Chrysler moment.

Business Exchange related topics:
General Motors
Chrysler
U.S. Economic History

LeVine is a correspondent in BusinessWeek's Washington bureau. Francis is a correspondent in BusinessWeek's Washington bureau.

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