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Obama takes over as de facto CEO of GM
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De facto CEO of GM, Barack Obama (AP Photo/Evan Vucci)
The Dow plummeted Monday amidst the news that General Motors CEO, Rick Wagoner, would be stepping down. Reports indicated, and the White House has confirmed, that Wagoner’s resignation was at the request of the Obama Administration.
Obama attributed the 254-point tumble to the American people’s lack of confidence in the General Motors business plan. But, in the spirit of patriotic dissent, allow me to proffer an alternative explanation: the American people have zero confidence in the government’s ability to successfully run anything. As government intrusion into the private sector grows, a sharp decline in investor confidence depresses the market.
And, Obama can’t blame the American people for their lack of confidence in the intermingling of government with the private sector; this is the same government that has run Amtrak into the ground and bankrupted Social Security. The central tenet of Public Administration is this: a business in the private sector thrives because it is profit driven and has every motivation to operate efficiently. A business operated by the government is inherently destined to fail because it is not fudamentally a business; it is merely a bureaucratic entity entangled in red tape.
Folks, this is the realization of the grave danger presented in the acceptance of bail-outs from the federal government. You are witnessing the most significant intrusion into the private sector by your government in the history of this nation. This is the intentional, calculated usurpation of the private sector by this Administration.
The Administration cited a bad business model and a need for a “clean slate” as the reason for the firing. But, being the cynic that I am, I don’t buy it. Wagoner’s tenure at GM has been characterized by a desire to put SUVs and trucks at the forefront of its marketing campaign as well as a reluctance to pursue production of hybrid models to the degree that some would desire. So, it seems that GM's business model did not meet the approval of the environmental left. Now, the Obama Administration is on a smooth road to appeasing its base while dictating what kind of car you drive.
The damage of this unprecedented intrusion not only will reverberate to the consumer, the company’s shareholders will feel also feel the effects. Basic economic principles dictate that demand cannot be falsely created, so consumers will simply purchase from privately owned car companies still profit driven to create cars that consumers want. GM will subsequently fail, thus destroying the portfolios of its shareholders. The board of directors, charged with developing GM's business plan, will be packed full of environmentalists and others who have no idea how to change their oil.
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