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?