From First Read:
*** The Executioner-In-Chief? It turns out that Wagoner is the fourth CEO the Obama administration has replaced. The others have been the heads of AIG, Fannie, Freddie, and (some claim) Citi. But Wagoner’s dismissal — which came as a surprise to industry insiders — has left some liberal critics wondering why the Obama administration is demanding the head of GM’s CEO, but not Bank of America’s or Goldman’s, etc.
Ah, yes. That’s what we need: Obama becoming the de facto super-CEO of even more corporations.
Meanwhile, I think Mickey’s reaction is exactly right:
After visibly defenstrating GM CEO RIck Wagoner, and moving to replace the board of directors, won’t Obama now “own” the GM problem? If the company shuts down in the near future, costing tens of thousands of blue collar jobs, it will be under executives implicitly or explicitly chosen by Obama. It will be Obama’s failure, not simply GM’s failure, no?
GM is now Obama’s company. If it closes, it will be on his say-so. But Obama is a politician, not a CEO. So his first concern is to avoid bad political fallout, which means he will prop up the company for as long as it takes, regardless of what makes economic sense. This, in turn, will likely make the company either less economically sound or, it will rebound — but only by getting special breaks other companies won’t get. Either way, bad practices will be rewarded and/or good practices will be punished. More firms will see that gaming Washington pays off and the cycle will continue.
Of course, the good news is that being a law professor and community organizer totally prepares you to run huge white elephant multinantional corporations.