When 'bailout' becomes 'buyout'

March 30, 9:35 AMRepublican ExaminerWendy Sullivan

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America is a country that was built on capitalism and merit. If you have a good idea and the drive to make it succeed, you will be rewarded with the so-called American Dream. But now that dream is turning into a nightmare.

Yesterday word came down that General Motors CEO Rick Wagoner was asked by President Obama to tender his resignation effective immediately, which he did. The President of the United States effectively fired the CEO of a publicly traded corporation.

There are some who will say that President Obama was merely practicing risk management. If the government is to hand over large sums of bailout money to keep the automakers afloat, then the government should have the same rights as any other lender and decide on the terms of the loan - up to and including who will administrate it at GM. However, President Obama's actions set a dangerous precedent. He sidestepped a governing board of directors of a major corporation in order to unseat the CEO.

There has been a lot of disagreement in what the government's role should be in regards to the Big Three automakers - Ford, General Motors and Chrysler. Many have said that the companies should seek bankruptcy protection instead of raiding the government coffers. Ford has turned down the bailout money and said they would go it alone for as long as they could. But the other two companies did not want to face the government and judicial scrutiny that comes with Chapter 11. Instead they wanted bags full of 'free' cash from the government treasury. They made a deal with the devil and now they are paying with souls.

At what point does 'bailout' become 'buyout'? If the automakers - despite the bottomless coffers of the Treasury - cannot make a go of it after all, will the government simply buy out shareholders at ten cents on the dollar and nationalize the companies? It is a question this Examiner never thought she would have to ask of the Land of the Free, but it is becoming a very real possibility.