Free Markets, Free People


Pres. Obama Fires CEO Wagoner?

I‘ve been following this story with numbed amazement at just how surreal it all is. No matter how many times I repeat this sentence in my head — The President of the United States has just fired the CEO of General Motors — I can’t quite convince myself that it’s true.

That’s not to say that I’m unsympathetic to the argument that the U.S. government, as lender, has every right to demand such a resignation if its going to be funding the company. Indeed, that’s a fairly common demand whenever a funding source enters the picture at dire times. And rightly so.

But let’s not forget that Obama is not the U.S. government. And, in reality, he’s not the lender. Congress holds that dubious distinction by being the keeper of the public purse. You’d think that Obama would have understood that and, y’know, at least told them about his plans for Rick Wagoner’s head. You’d be wrong, though [HT: Allahpundit]:

President Obama didn’t want any advice from Congress on the decision to ask GM CEO Rick Wagoner to resign, according to Carl Levin (D), Michigan’s senior senator.

“He didn’t ask us about it, he informed us,” Levin told reporters in a conference call Monday afternoon. “The president said he’d already decided.”

Levin said he and three other lawmakers were informed of the decision in a phone call Obama made from the Oval Office. Obama told the members of Congress that Wagoner needed to resign so that the administration could show the public it was making an effort at a fresh start with helping the auto industry, according to Levin.

I guess Congress isn’t about to argue with The One over this. Maybe they’re just upset that they didn’t think of it first. Nevertheless, is there any doubt that Obama has absolutely zero authority or power to make this decision?

Aside from the stupefying hubris driving Obama’s actions here, what real good is going to come of Wagoner’s ouster? He’ll walk away with about $20 Million in severance, and GM will still have around $6 Billion in legacy costs to deal with each year, on top of pay for its unionized workforce. And even if all those costs were brought into line, what exactly is the new (Obama picked?) CEO going to recover from the fact that GM is losing about $1 Billion per month? The sad answer is “probably nothing.” GM will proceed into bankruptcy, just like it should have from the start of all this mess, and it will take down several billion taxpayer dollars with it.

But all that pales in comparison to the precedent now set, without even a peep of objection from Congress, that the President of the United States considers it within his purview to fire the heads of companies when he sees fit. Lovely.

Did I miss some fine print in the election last year about voting for King of the United States?

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27 Responses to Pres. Obama Fires CEO Wagoner?

  • W only said “If this were a dictatorship, it would be a heck of a lot easier, just so long as I’m the dictator.”  O seems intent on making it so.

  • IT’S CALLED ELADERSHIP! GET USED TO IT!

    ARISE THE PEOPLE!!!!

    /Erb

  • While the left wailed about the coming dictatorship under W, they are absolutely silent regarding Obama’s budding fascist state. 

    As dysfunctional, and tone-deaf as the GOP is, some at least therein have the gumption to stand up against their own party when contra-constitutional proposals/orders are issued from the executive/legislature.  

    • The political right needs to decide how they want to label Obama….. so far I have seen everything from Communist to Fascist. Make up your minds already what mud you want to sling.

      Also, modern day Kings have mostly symbolic power, far less than any power the President of the United States has. Talk to a European once in a while and find out what Kings can do… it’s nothing like the new TV series.

      • It’s funny that you think you’re being helpful.  Of course, you also think that communism and fascism are diametrically opposed.  That explains a lot about you.

  • President Obama didn’t want any advice from Congress on the decision to ask GM CEO Rick Wagoner to resign, according to Carl Levin (D), Michigan’s senior senator.

    Oh, this could get interesting!  Members of Congress, especially old hands like Levin, are VERY jealous of their power and perogatives.  How will they respond to being “informed” instead of “consulted”?
    Which is more important to them?  Keeping their own power and prestige intact, or helping TAO remake America into something more agreeable to democrats (spit), i.e. a socialist state?

  • But let’s not forget that Obama is not the U.S. government. And, in reality, he’s not the lender. Congress holds that dubious distinction by being the keeper of the public purse.

    Except the Congress delegated a few $billion of that purse to the Executive on October 3, 2008.  This bail-out is from TARP funds that have been placed at the disposal of the POTUS by Congress. 

    Nevertheless, is there any doubt that Obama has absolutely zero authority or power to make this decision?

    Treasury is able to act as it sees fit with the money it has recieved as long as it is within the conditions laid out by Congress and unless the Congress has said you must not fire Rick…

    • Congress could make the stipulation, but the Executive Branch doesn’t have that authority.  It’s true that Congress attached very few strings to the TARP money, but the Executive Branch still does not have any inherent authority to dictate personnel decisions for a recipient, and Congress didn’t grant any.  There is also the question of whether Congress unconstitutionally delegated its ;egeslative authority to the Executive by not saying where the money was to be spent and how.

      The crux of the situation is that the Executive is tasked with carrying out the laws, while Congress is supposed to create them.  Unless the Constitution grants the authority to the President, or Congress creates a law for the President to carry out, he can’t just go about sacking CEO’s.

      • What he (or his Treasury Secretary) is tasked to do is approve or reject TARP applications on a set of ill defined criteria and GM is applying for additional TARP funding.  Does anyone (least of all Congress) know what criteria are meant to be used?  If not then the President can withold bailout money if the management of a company are inept as assessed by the President.  

        Likely Obama has not “sacked” Wagoner from a position of authority, rather he has informed GM that they will not get $Xbillion of additional taxpayer funding unless they make “manangement changes”.  GM was under no obligation to accept Obama’s conditions and were free to get their financing elsewhere; if they had done that then Obama would have had no grounds or ability to remove Wagoner. 

        • No.  Congress told the President to spend the TARP money.  He does not have any authority (inherent or otherwise) to go around firing people.  You are absolutely right that conditions can be set up GM prior to receiving any more funds, so long as their set by Congress.  There wasn’t anything like that here, but instead, the President told Wagoner (not the Board, who really has the power) that he has to go.  That’s improper.

          And I should be clear that I don’t necessarily disagree with the decision to get rid of Wagoner.  But I am not at all happy with the way it was done.

  • I’m more concerned here about the fact that we’re even in a position where the president even thinks about doing this. No more bailouts. No more governments in markets, period.

    • Well, it’s better than starting wars and torturing people.   At least isn’t killing, creating orphans, and unleashing massive violence.  It may still be too much governmental intrusion, but it’s not as bad as the stuff the last guy did.

      • Is that the best you can come up with Scott?  Ignore the topic, ignore the comments, sit in your corner and say ‘but wook what da ottter kid did… boooo hooooo’

        I rather expected another silly rant from you along the lines of ‘now THIS is leadership’.

        • I discuss this in my blog entry today (March 31).   I do think that pointing out how those who are in arms about this action need some perspective: think about what the last guy did too.

          • First off, I’m not a Bush supporter. Second, even if I were, his mistakes do not give Obama a get out of jail free card. He needs to be held accountable for his mistakes. Stop making excuses and grow up.

        • I discuss this in my blog entry today (March 31). I do think that pointing out how those who are in arms about this action need some perspective: you dense righties need to think about what the last guy did too.

          And think about the fact that Bush is eeeevil. Don’t you get it? Everything he does is eeeevil. Because he’s a warmongering, baby-killing torturer. And no good can come out of Iraq, no matter how many of those silly elections they have and no matter how peaceful they are, because Bush was an imperialist. Why can you righties get that!?!

          While everything Obama does is goooood. Because his intentions are fully informed by the holy writ of postmodern leftism.

          Besides, the ideas of you thick righties need to be pushed aside. The Bush regime is over (finally!). Obama is showing leadership, and he’ll cut spending (just wait, he will, I just feel it), and besides, if he didn’t do something markets would never adjust themselves. Markets only work when guided by wise leftists. I decree it.

          That’s so obvious, I don’t understand why you guys keep arguing against it. It’s self-evidently true, according to the two dozen blog posts I have up that claim so. You guys just can’t stand the fact that you’re being proven wrong.

          Besides, you’re mean and insulting, and such behavior would never be tolerated in the faculty lounge. We’d pass a faculty resolution against it immediately. That would show you.

  • It’s the President’s call. Take heed.

  • And how intriguing it all would have been if Wagoner had pulled a Blag on him and  told him “go stuff it, Mr. President”.

  • “He didn’t ask us about it, he informed us”.

    Heh! Better get used to it.

  • Bush created Obama, like the Joker created Batman.  I bet you wish Gore had won in 2000 now ;)

    • No.

    • The Joker didn’t create Batman.  In fact, given the way Batman’s mere existence draws wacked-out villains like moths to flame, it’s the other way around.  (Though, come to think of it, that does rather describe BDS if you cast President Bush in the Batman role).  If anyone could be said to have created Batman, it’s Joe Chill, or possibly Ra’s alGhul.

  • You know, the first thing that crossed my mind when I heard about this was: “I TOLD these idiots (my liberal friends) that this would happen!”

    The libs complain about Bush supposedly having shredded the Constitiution.  Obama just wiped his rear end with it.

  • SCOTT,

    SO WHAT ARE ALL OF THE TROOPS OBAMA IS SENDING TO AFGANISTAN GOING TO DO? SERVE COFFEE AND DOUGHNUTS? YOU DIDN’T JUST DRINK THE KOOL AID, YOU TOOK A BATH IN IT.