Sunday, March 29, 2009

Swept Aside

I am surprisingly loath to belabor the point (made abundantly by Scott Rasmussen, et al.) that the bloom is off of the Obama rose. In as much as that is the case, it may well be as the President wishes. He has spared no effort in declaring who his friends and enemies are, and has treated each accordingly. Even as he dangles rapprochement in front of Iran, he has tied TARP fund recipients, small businesses owners, Las Vegas hoteliers, so-called "unwanted" embryos and Rush Limbaugh to the whipping post.

We can now add one more person to the sh*t list. In an unprecedented move, Barack Obama has called for Rick Wagoner's ouster as Chairman and CEO of General Motors. The Detroit Free Press reports that Obama demanded Wagoner's removal as a condition for further government aid, and surmised that the company's COO, Fritz Henderson may be the most likely candidate to replace Wagoner.

I wish Messrs. Wagoner and Henderson well in their future endeavors, but I think Wagoner got the better part of the deal. As AIG's Edward Liddy can attest, chief executives who have had their tenure cut short by the government are tough acts to follow. Far from being an decision maker, Wagoner's successor will be an implementer, merely following the dictates of a new Board of Directors comprised of 536 ne'er-do-wells - many of whom have never met a private sector payroll or managed anything more substantial than a political campaign. The idea that government can run a private corporation is belied by its negligent oversight of AIG, Fannie Mae and Freddie Mac, the Post Office...

Indeed, government intervention has already done enough to push automakers to the brink of bankruptcy (think CAFE Standards.) But beyond whether the Feds are competent to run a car company (or an insurance company or a bank) is the issue of whether they should do so. The very idea that Obama - or any president for that matter - can summarily dismiss corporate leadership is unsettling, to put it mildly. This, along with the administration seeking authority to take over corporate entities whose failure would constitute a "systemic risk," presents a risk to American capitalism itself, as does Obama's bombast against "greedy" executives. These are hardly the behaviors of someone who claimed in a CNBC interview during the 2008 campaign to be a "
pro-growth, free-market guy.

Of course many things about Obama and his administration have not performed as advertised. But it is now fair to ask whether this is a presidency dedicated to capitalist ideals at all or whether it seeks to usher in something resembling European socialism. While the "s-word" seemed to be an idle charge made by a desperate McCain campaign last Fall, it now rings true in the ears of more than a few Americans. One could be forgiven for wondering what end is served by Obama's business-bashing ways.

It is self-evident that, along with Mr. Wagoner's 31-year career at GM, Obama has swept aside any pretensions to being a "free-market guy," and has revealed himself to be an anti-business, pro-government ideologue. His policy prescriptions for economic recovery are so disconnected from the causes of the economic crisis that they represent what Charles Krauthammer called "
the greatest non sequitur ever foisted upon the American people." Investing in universal health care, universal access to college and a "command and control" economy are hardly the way to ensure long-term economic stability. They are the way to reorient America towards statism, and it is clearer than ever that as much seems to be Obama's endgame.

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