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March 31, 2009
Obama Crosses Line and Brings BIG Government into Private Industry
Obama takes step over the line that separates government from private industry
His automaker bailout plan wades into 'industrial policy,' in which government officials, not business executives or the free market, decide what products a firm makes and how it charts its future.
President Obama's plan to save failing U.S. automakers -- and make them the instruments for creating a cleaner, greener transportation system -- marked a major step across the line that traditionally separates government from private industry.
His announcement Monday of a new position on bailing out Detroit went beyond a desire to be sure tax dollars were not wasted in bailing out struggling companies. It put the Obama administration squarely in the position of adopting a so-called industrial policy, in which government officials, not business executives or the free market, decided what kinds of products a company would make and how it would chart its future.
His automotive task force concluded, for example, that the Chevy Volt, the electric car being developed by General Motors Corp., would be too expensive to survive in the marketplace. It declared that GM was still relying too much on high-margin trucks and SUVs, and that Chrysler's best hope was to merge with a foreign automaker, Fiat.
Judgments like those are usually rendered in corporate boardrooms or announced in quarterly reports. But this time they were coming directly from the White House.
The notion that it was the president, not car company executives, who would pick such a course drew immediate criticism, especially from conservatives.
"When did the president become an expert in strategic corporate management?" said Rep. Tom Price (R-Ga.), chairman of the conservative Republican Study Committee. "The federal government is famous for its mismanagement, yet this administration continues to demonstrate its certainty that Washington always knows best."
Sen. Bob Corker, a Tennessee Republican, called it a "power grab" that "should send a chill through those who believe in free enterprise."
And Rush Limbaugh declared in his daily radio broadcast, "There's always been a line, ladies and gentlemen, over which no president would cross with respect to the distinction between the public and private sectors. Obama has now crossed that line where there is no limit to government's destruction of private activity or control over it."
Some participants in the deliberations, speaking on the condition of anonymity because of White House restrictions on allowing people to speak freely, said the task force operated from an underlying belief that consumers would ultimately be attracted to more fuel-efficient cars despite current data showing many such cars languishing on dealer lots.
"We focused on the best options consistent with the president's goal of supporting the auto industry and being good stewards of taxpayer resources," said one senior administration official, who spoke on the condition of anonymity despite conveying official White House talking points.
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Other CEOs React to Wagoner's Fate
Watching the president of the United States effectively fire the chief executive of General Motors Corp. unnerved some other CEOs, who said the move crossed a troubling threshold of government involvement in the economy.
"We know they'll oust a CEO. We know they'll change the board. Will they dictate terms of the union contract? And do you have to call your congressman to get a car?" asked James E. Rogers, chief executive of Duke Energy Corp.
Mr. Rogers said ousting Mr. Wagoner as GM's CEO raised questions about whether there are any limits to government action at companies that accept government money.
"Are we moving toward a system similar to the French government's ownership and control of corporations in France?" he asked. "If I was a banker that took TARP money, I'd find a way to give it back as soon as possible." ....
Scott W. Wine, CEO of off-road recreational vehicle, snowmobile and motorcycle maker Polaris Industries Inc., said Mr. Wagoner likely should have been removed as GM's head. But, he added, "I would have preferred to see it happen through bankruptcy.''
A third CEO also suggested that GM go through bankruptcy. But Timothy Sullivan, CEO of Bucyrus International Inc., said he had no sympathy for Mr. Wagoner or GM.
"When people have a vested interest in your business—whether it's your lenders or your shareholders—they have a right to have input into the governance of the company," said Mr. Sullivan, whose South Milwaukee, Wis., company builds mining machines. "If the government has a large vested interest in GM, which they do, then they should have a say so in how things are done."
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Obama didn't ask Congress about ousting Wagoner
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.
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Car problems jolt Wall Street
Wall Street’s big March rally was officially on hold after the White House rejected turnaround plans from General Motors Corp. and Chrysler and gave investors a reality check on the economy.
All the major indexes fell more than 3.5 percent, including the Dow Jones industrial average, which lost more than 280 points. Financial stocks weighed heavily on the market.
Fears of an automaker bankruptcy have been looming over investors for months, and the latest developments, which included the removal of GM’s CEO Rick Wagoner, made the market even more uneasy not only about the industry, but the overall economy.
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Wild Thing's comment........
“the Obama administration squarely in the position of adopting a so-called industrial policy, in which government officials, not business executives or the free market, decided what kinds of products a company would make and how it would chart its future.”
I hope that all the ignorant people who voted for him REMEMBER (in the future) that it was he, Barack HUSSEIN Obama who trashed this nation.
"Some participants in the deliberations, speaking on the condition of anonymity because of White House restrictions on allowing people to speak freely..."
This is peculiar , but then Obama does rule with an iron hand, like he did during his campaign and how he went after anyone that disagreed with him. Remember those two radio interviews that almost lost their jobs, one was here in Florida.
Well here we are, the Soviet Socialist Republic.of Hussein Obama.
Posted by Wild Thing at March 31, 2009 05:55 AM
Comments
This Chicago thug is acting more like a dictator than a president. They can't run a competent government now this character is trying to run a private business. WTF? Why isn't he removing the postmaster general. He is running a failing government monopoly and received a big pay raise plus a bonus.
Posted by: Bob A at March 31, 2009 06:45 AM
I knew GM should NOT have taken the money. It's a bribe, blood money, whatever you call it. Now they have to do as he says. You NEVER take money from the mob. NEVER.
GM should have filed bankruptcy and started fresh without the money. Now they're just a government plaything to do with as Obamanation feels like.
Posted by: Lynn at March 31, 2009 08:10 AM
Did you ever think that in the United States of America we would ever see a President fire the CEO of a major corporation?
Posted by: BobF at March 31, 2009 09:52 AM
Well now GM is history. As the joke yesterday said, when the Government took over the management of the Mustand Ranch, they lost money, if you can't make money running a whorehose and selling booze then GM is doomed.
Unless of course the real reason, Obama wants to put the union in charge of GM, in that case, GM will exist on paper only. The cost of a chevy will be 3 times what it is now.
Posted by: Mark at March 31, 2009 10:17 AM
I agree Lynn, it's no different than borrowing money from "Tony Soprano". Now, they own you. I've heard terms like 'surgical bankruptcy' on the news lately. This company will not survive it. The ill-will of the public combined with the excessive taxation that we're faced with will insure that their sales will not recover. As predicted months ago, the government will have to continually pour tax dollars into it to prop it up because the UAW is still there.
Posted by: jim at March 31, 2009 11:33 AM
It has only taken a few weeks of Obama being in office. America has become a socialist state. The president is on his way to becoming a dictator. Goodbye to the rugged individualism and independence that made America the greatest.
Putin must be happy. He sees an America that he perceives in a few years as not being any stronger than Russia.
Posted by: TomR at March 31, 2009 11:45 AM
i am a old man and thankful that i haved lived when the usa was a leader in the world not a country that has lost its freedom to be goverand by the people ??
Posted by: lee richardson at March 31, 2009 02:19 PM
Nary a protest from either house of Congress.
At the federal level, Article Two of the United States Constitution (Section 4) states that "The President, Vice President, and all other civil Officers of the United States shall be removed from Office on Impeachment for, and Conviction of, Treason, Bribery, or other High Crimes and Misdemeanors." The House of Representatives has the sole power of impeaching, while the United States Senate has the sole power to try all impeachments. The removal of impeached officials is automatic upon conviction in the Senate.
Obama and his thugs are bypassing all constitutional guarantees and safeguards, actions contradicting the oaths of office they have taken and nobody in congress is challenging them.
Posted by: Jack at March 31, 2009 02:26 PM
I had an interesting customer come in the store today. If the dictionary had a picture and description of an Ozark Redneck, this man would be it. Like most rednecks, he started to talk about what was pissing him off and it was politics and our current administration. To listen to him, he had his act together and was very intelligent concerning the issues of today. This guy made one statement before he left. He said, "I'm only 37 years old but my children and grandchildren will never know the America I grew up in".
Posted by: BobF at March 31, 2009 10:50 PM
Bob A., exactly, he has learned well how to be a thug and he is using it as president.
Posted by: Wild Thing at March 31, 2009 11:28 PM
Lynn, you are so right, you described it well.
"Now they're just a government plaything to do with as Obamanation feels like."
Posted by: Wild Thing at March 31, 2009 11:30 PM
BobF.,never in my life, in fact never would I have thought half our country would vote for this communist.
"Did you ever think that in the United States of America we would ever see a President fire the CEO of a major corporation?"
Posted by: Wild Thing at March 31, 2009 11:34 PM
Mark,omg if he puts the union in charge. I had not thought of that, how awful.
Posted by: Wild Thing at March 31, 2009 11:35 PM
Jim, I agree, this company will not survive. I would be very surprised if it did.
Posted by: Wild Thing at March 31, 2009 11:37 PM
Tom, is amazes me how fast he is doing all of this. He is on a mission that is for sure.
Posted by: Wild Thing at March 31, 2009 11:39 PM
Jack, yes I would like to know where are the protests. sheesh not a word or outrage.
Posted by: Wild Thing at March 31, 2009 11:40 PM
BobF., that man that came into your store is absolutely right. It is heartbreaking.
Posted by: Wild Thing at March 31, 2009 11:43 PM
