The move to oust GM CEO Rick Wagoner by the Obama administration is yet another masterful stroke towards economic populism; the federal government will now apply copious political pressure to corporations and companies that bristled happily when it came time to accept bailout funds--har! har! har!--little did they know that were essentially making the federal government their hard taskmaster and overseer. The lesson is clear: Don't take tax dollars from the government. They will bend and twist your company to satisfy its political ends while making a public hanging of you and your management. Score one for Team Obama since this whole sorry episode is a clever cover for the White House to dump more public funds to the automakers with little public resistance or scrutiny. After all, getting rid of a bad CEO (aren't they all unpopular now?) in a very public manner appeases populist sentiment against the bailouts for a time.
I will repeat my call for no bailouts for auto companies: Let them go chapter 11. We could have avoided this whole mess if they were simply allowed to go bankrupt months ago.
2 comments:
The Democrats are in the pocket of the unions... they will never allow the market forces to work because BK would allow them to shed their union obligations.
Harrison,
You are absolutely right on this point. Chapter 11 was explicitly blocked for the auto makers because it would have broken the high-cost labor contracts with the UAW. Now taxpayers are going to have to eat more losses in the auto industry.
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