“Capricious”: Obama’s GM Power Grab
By SusanUnPC on April 1, 2009 at 12:25 AM in American Consumers, Arrogance, Auto Industry, Banking Institutions, Economic Stimulus, Economy, General Motors & Chrysler, Obama Administration, Obamatopia Mirage, President Barack Obama
See, this is what worries me most. As Nocturnal Warrior said over and over again tonight on his otherwise light and hilarious show, we have the “Resume President.” And this move was solely because Obama’d been perceived as soft on AIG, so he wanted to be seen as tough, and add “Tough Guy” to his list of achievements.. So he was tough solely for the sake of looking tough. What’s the bummer is that Joey & Suzy Citizen, too busy to read and study the issues, will hear the headline – “Obama Fires GM Chair” – and they’ll be impressed. “That’s showin’ them,” Joey and Suzy think. They don’t KNOW that it’s crassly political, and not in the good interests of GM. Now, check out this from a panel on CNN’s Anderson Cooper 360 Monday night, which gets into the “blowback” from Obama’s power grab:
DAVID GERGEN: I just disagree with the Wagoner decision. And people say, well, you’re — it’s it’s a double standard. You know, you’re treating the banks much better. This is going to send a shudder through the banking community, “If the government can be capricious here, they will be capricious in dealing with us,” and make them even more, I think, reluctant to play.
COOPER: And, Vince, that’s your fear?
VINCE CREW: And that’s it. That’s absolutely it, agreeing with David here.
When the president of the United States can — can fundamentally interject his — his power, his authority, his — his advisers’ ideas into the private sector, we are on that proverbial slippery slope, the — the — this is not the audacity of hope. This is the audacity of power.
And those of us who — who voted for this man had no idea that this was what we were hoping would happen. And those of us who didn’t vote for this man feared that it would.
COOPER: Very briefly, Stephen.
STEPHEN LEEB: OK. He’s doing now what he has to do in order so he doesn’t have to do a lot more later. If he lets GM fail, you will end up seeing the government so much part of everyone’s life, it will make today look like a picnic.
Susan again: “… so he doesn’t have to do a lot more later. …” Well, of course. Obama’s MO is to make a swift, and easy (aka lazy ass) move that shifts responsibility onto others. Maybe the idea was that a shake-up would wake up GM’s management, but it’s also unsettling. Worse, it’s very unsettling to ALL business executives, including any who may contemplate investing in Geithner’s toxic assets plan, which is supposedly a “one-way bet,” as Krugman calls it, that leaves TAXPAYERS holding the bag for every toxic asset purchase that fails to increase in value.
Obama’s move has also unsettled the auto workers, who fear, more than ever, that GM’s last-gasp effort at restructuring is sure to fail and that bankruptcy comes next, in which a judge will demand hard-nosed benefits cutbacks to workers.
Obama’s move has further pissed off the auto companies who haven’t needed or asked for government help: Ford and all the foreign companies who make cars/parts in the U.S. Why give GM an advantage their company won’t get?
Here is the full discussion segment, from the transcript:
As we mentioned, President Obama is taking heat tonight for demanding Rick Wagoner’s resignation. There’s that kind of anger. Then there’s the kind that has nothing to do with presidents or CEOs or beltway politics.
It’s the kind of captured by local station WWMT outside a Chevy dealership in Wayland, Michigan, that had just announced it was closing and that everyone was losing their job. Take a look what happened, employees fighting each other. It’s actually the second fight of the day there. A short time later, one of the men involved came and spoke to the camera.
(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: It doesn’t really matter how hard that you work, because there’s always somebody a little bit above you that has the right to control every decision, every ounce of energy that you put forth effort to. Don’t you have the right to be a little bit mad when somebody says, hey, we’re all done?
(END VIDEO CLIP)
COOPER: “Digging Deeper” now with senior political analyst David Gergen, economist Stephen Leeb, author of “Game Over,” and ethics guru Vince Crew, author of “Everyday Ethics, Everlasting Consequences.”
David, what do you make of this? I mean, it has happened before. But we’re kind of in unchartered waters. Firing of CEOs by the government?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: We sure are.
And I think that we’re going to see more of it, Anderson. The — the toughest part of this is that the government had no good choices. President Obama had no good choices. And what they have decided is, we couldn’t get the bondholders to agree to any kind of out-of-court settlement.
We couldn’t get the UAW, the automobile workers. We’re going to force them. We’re going to give them 60 days to do this or we’re going to take them into bankruptcy and do it through a court.
I — all of that is understandable. It’s tough. It means more layoffs are coming. I think the surprise was firing Rick Wagoner, a man who, as CEO, had done a very good job restructuring the company. And a lot of the congressional delegation, Republicans and Democrats, expressed surprise.
And there is this question now of a double standard about, why do you treat the automobile companies in one way and treat the banks in another way? I think that’s going to be very tough politics for the Obama administration.
COOPER: Vince, what about that? I mean, there are lot of — I was just in Detroit two weeks ago. And a lot of the autoworkers there are saying to me, look, there’s a complete double standard. A lot of these CEOs on Wall Street have cost the government a lot of money. They have gotten more bailout money. Their companies are tanking probably even more than some of these auto companies. They’re not being fired.
VINCE CREW, AUTHOR, “EVERYDAY ETHICS, EVERLASTING CONSEQUENCES”: Well, you’re right, Anderson. That’s happening.
And, also, when — when people are looking at these complex situations about the economy, and the economists come out and they say, well, something had to be done, people go, wait a second. In my own personal life, if — if I have a failed business or if I make bad decisions, there are repercussions for that. Why aren’t these guys having repercussions? And when it comes to dismissing a CEO, that’s the job of a company board, not the president of the United States.
COOPER: Steven, is there a double standard here?
STEPHEN LEEB, ECONOMIST: Not really, I don’t think.
I mean, basically, I don’t think the government had much choice. I mean, it’s really AIG fallout, Anderson.
The public, I think, would be furious if we were giving ever more money to a company, and sort of rewarding, in a way, the CEO who at the helm when the company basically went under and required all this money. I mean, it has to be publicly acceptable.
And in answer to letting the company fail, that’s just not an alternative. I mean, how many more home foreclosures would you have if you have a million people out of work? That’s just not doable.
COOPER: I know David wants to disagree with you here, but I — but I have just got to take a short break.
by Ronald Scott
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