So What Do You Call It…
…when the President of the United States can do this:
The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.
On Monday, President Barack Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler. The plan is based on recommendations from the Presidential Task Force on the Auto Industry, headed by the Treasury Department.
The White House confirmed Wagoner was leaving at the government’s behest after The Associated Press reported his immediate departure, without giving a reason.
General Motors issued a vague statement Sunday night that did not officially confirm Wagoner’s departure.
"We are anticipating an announcement soon from the Administration regarding the restructuring of the U.S. auto industry. We continue to work closely with members of the Task Force and it would not be appropriate for us to speculate on the content of any announcement," the company said.The surprise announcement about the classically iconic American corporation is perhaps the most vivid sign yet of the tectonic change in the relationship between business and government in this era of subsidies and bailouts.
Don’t want to call it "socialism"? Fine, but don’t call it "capitalism", either.
I will note that this descent into "whatever-it-is-ism" was entered in mutually. GM begged for money, the government gave it to them, and then government started pulling the strings. Both sides contributed to this, but just because it was consensual doesn’t mean it was the right thing to do.
This is path taken by most anyone who takes money from the government, whether they be churches, schools, welfare recipients or major automakers. When you surrender your self-sufficiency, you lose much more in the bargain than originally thought.
Could companies be bailed out by the government without leaving capitalist, free market principles? Possibly. But is this move by the President in line with those principles? Not really. An underperforming CEO would be removed by any responsible leader…of the Soviet Union. We should not be putting our President in the position of being able to do that, and he shouldn’t be accepting that position.
Don’t want to call it "socialism"? Fine. What do you want to call it?
Filed under: Doug • Economics & Taxes • Government
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A “cause for concern” is one thing to call it.
I saw this while at the gym tonight and my thoughts were as yours; this is socialism.
Not that I feel sorry for GM, AIG or any of the others. They took the government money, so what did they expect? When you take the kings shilling you do the kings bidding.
In retrospect all these bailouts were a bad idea.
Obama is just exploiting them for his own reasons.
What gets me is that the talking heads on CNN, Fox News, etc. keep suggesting that it was this or GM would disappear off the face of the earth, as if bankruptcy means the company closes up shop. How many times have airlines files for bankruptcy and continued to operate? The unions won’t budge, won’t help with cost-cutting measures, but bankruptcy would force a settlement of some sort, deal with debt, all sorts of things that would bring GM out of this much better than a government grant that, as you say Tom, puts them on the hook to do the government’s bidding.
Liberal blogs I’ve been reading have been saying that, not only is this right, but that the Wall Street companies should have had this happen to them as well. (Writers at TalkLeft are most notably and vocally for this.) And of course, Democrats in Congress are all for this incursion into the private sector.
If we do descend into full-blown socialism, it will have come because corporations invited it and government decided it had to do *something*.
Socialism would be if the president demanded and forced a company head to step down. This is still capitalism, the means of production remain in the hands of private individuals, not the gov’t. It’s capitalism with some concern expressed about how it’s being lived out, that is what it is. Capitalism with a touch of morality inserted into it.
Seems to me. What else could it be?
Just because capitalism can take many forms does not make something NOT capitalism.
So “socialsism” is if the most powerful man in the world forces out the CEO, and “capitalism” is if the most powerful man in the world in the world suggests a CEO leave and he does. Seems to me, by that definition, we sit on a knife edge.
Frankly, putting more and more economic power into the hands of one man, be he Democrat or Republican, seems to me to be a much more immoral move. Lord Acton would have something to say about power corrupting.
But if governmental oversight is just “a touch of morality”, why stop there? Again, Dan, your words consistently suggest that you’re secretly rooting for full-blown socialism. Along with bloggers cheering the GM CEO removal and calling for the heads of Wall St. firms, too. Along with the Democrats that voted for a bill to allow Washington to regulate … retroactively … the salary of everyone in a company which was given government money.
If it’s not capitalism, it’s a flying leap away from it. If we’re on a continuum between the two, we’re farther from capitalism than we’ve ever been in our history. And ask Europe’s drowning economies how that change in position worked for them.
No, my words don’t suggest that I want socialism. This is your interpretation of my words.
For my part, I don’t think socialism would work, therefore, I don’t want it. I don’t know how I can be more clear. I think capitalism and socialism are both flawed approaches to human economies, but I think socialism is MORE flawed than the greatly flawed capitalism. Why would I advocate for something I believe to be more flawed? Answer: I wouldn’t and I don’t.
Too often, opinionated people have a hard time understanding shades of gray (and I know, I am an opinionated person…). In truth, I am greatly opposed to both a wholly unregulated capitalism and to a wholly oppressive socialism. However, a regulated capitalism seems to be the best compromise to me. Therefore, that is what I support: A regulated capitalism, NOT a socialism.
I doubt that you are truly opposed to a touch of morality in our gov’t when it comes to capitalism. Are you supportive of a wholly unregulated capitalism or do you think that leaders who condemn pornography are doing a good thing? Do you support the Market and people’s freedom to act within that Market, or do you think that leaders who are opposed to and speak out against unlimited abortions are doing a good thing?
Leaders speaking out against greed and ineptitude are not doing a bad thing. I would be opposed to any president forcing a ceo to step down (as if a president could even do this in our Republic). However, I am not opposed to a president telling someone who is receiving gov’t handouts, “Hey, there are some strings attached…”
By the way, I was opposed to the congressional efforts to tax specific peoples/groups.
And yet what you’re supporting is a tissue-paper’s-width away from socialism, again, by your own definition. Worse, Democrats in Washington are taking this support as marching orders to implement even more socialist-inspired legislation.
Are you supportive of a wholly unregulated capitalism or do you think that leaders who condemn pornography are doing a good thing? Do you support the Market and people’s freedom to act within that Market, or do you think that leaders who are opposed to and speak out against unlimited abortions are doing a good thing?
You seem to be considering speaking out against societal problems and saying that a specific man should step down from his job are equivalent, which I would disagree with. I don’t consider the latter on par morally with the former; it’s not per se a moral pronouncement.
Presidents give their opinions from the bully pulpit all the time; no problem. But when the most powerful man in the world says the GM CEO should step down and he does, it’s an economic decision. The difference between that and legally forcing him out is extremely small, especially noting the previously mentioned bills being put forward by Democrats. I’m not opposed to strings being attached to government money, but I think you would agree that this should not become carte blanc.
I agree with you that the AIG bonus bill was a bad idea, and it looks like it may die, but Democrats are not done yet. The question will be when to say “when”, and the more they are supported in their efforts to take more and more power over corporations, the less the public will be able (or perhaps even inclined) to say “when”.