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Thursday, February 12, 2009
Dan Gainor :: Townhall.com Columnist
New CEO Obama Shows How Tough It Is to Run a Company
by Dan Gainor
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WASHINGTON – Shares of Hope and Change, Inc. finally rose this past week on word the North American firm would spend more than $1 trillion to dig itself out of a prolonged economic downturn. Hope and Change (NYSE:HOPE), formerly the United States of America, LLC, has suffered several setbacks since popular new CEO Barack Obama took over following a November shareholder vote.

Obama’s first few weeks at the company have been marred by controversy. Several of his top management picks had reported tax problems – including his new CFO Timothy Geithner. Three nominees for high level positions were forced to withdraw after shareholders uncovered tax and other complications. At the same time, he has encountered serious resistance to the spending plan from staffers loyal to the previous CEO.

That combination weakened the firm’s global standing and complicated Obama’s transition. But even more controversial were comments by the new CEO and some of his management team. Obama, a newcomer to top-level executive responsibility, surprised investors when he criticized Wall Street’s moneymaking on Jan. 30, saying there would be a time “for them to make profits, and there will be time for them to get bonuses. Now’s not that time. And that’s a message that I intend to send directly to them.”

That wasn’t what Wall Street or investors were looking to hear from the inexperienced head of the largest company in the world. But he didn’t back-pedal from the controversial statement, he added to it. He declared that the heads of the various subsidiaries would no longer receive competitive salaries.

“For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste – it's a bad strategy – and I will not tolerate it,” he told CNN Feb. 4. While Obama himself makes just $400,000 a year, the CEO spot includes perks such as corporate plane, helicopter and motorcade, as well as 24-hour security and a large house in Washington, D.C. He came under some criticism about the size and expense of the parties he threw after taking over the firm, as well as the hiring of his personal chef.

Obama’s comments caused widespread market disruption because the mega-corp impacts virtually every industry. Hope and Change went on an acquisition binge in recent months – both before and after he took the helm. HOPE took full control of mortgage giants Fannie Mae and Freddie Mac, as well as American International Group and a partial stake in General Motors, Chrysler and Citigroup.

Though his media popularity remained strong, Obama’s anti-investor views were criticized by some in the business press. CNBC’s “Mad Money” host told MSNBC on Feb. 2 that the new CEO was acting like infamous communist leader Vladimir Lenin “Let me tell you something, we heard Lenin,” Cramer said. “There was a little snippet last week that was, ‘Now is not the time for profits.’ Look - in Lenin’s book, ‘What Is to Be Done?’ is simple text of what I always though was for the communists, it was remarkable to hear very similar language from ‘What Is to Be Done?’ which is we have no place for profits.”

Obama’s “I screwed up” response to the initial problems was greeted by jeers in the investment community. Street sources indicate the stock could be in for a rocky ride if this kind of mercurial leadership continues.

# # #

There are reasons why politicians seldom run companies. They don’t know how. Had Obama’s first few weeks been covered by the business press (see above) as if he were a company CEO, he would have been much criticized. Even before that happened, investors would have sold stock in Hope and Change like it was Enron and Edsel.

Imagine every misstep having an impact on a stock price, not a poll. Obama has the media in his back pocket, so polls matter little to him at this point. But if his company’s stock had dropped 14 percent since he became CEO, as the Dow has done in that time, investors would be running for the exits.

Bad things happen when politicians who have little or no actual business experience (that is most of them) meddle in the private sector. The actions they take hurt business and often make things worse. In Obama’s case, he’s already shown he lacks the maturity to run a company – be it Fortune 500 or Baskin Robbins’ 31 flavors.

It’s not that liberals are incapable of running a business. That’s silly. Warren Buffett and Bill Gates make that a laughable argument. It’s because Obama doesn’t believe in profit, he believes in government.

And in the business world, simply saying “I screwed up” doesn’t cut it.

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About The Author
Dan Gainor is The Boone Pickens Free Market Fellow and director of the Media Research Center’s Business & Media Institute.
 
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51 percent
51 percent of those who voted in the last presidential election should be saying, "I screwed up."

REAL CHANGE I WOULD BELIEVE IN
perhaps a real change would be to constitutionally require that the person running for "president" should be qualified

and that those voting should pass a minimum qualifying test as well to show they have some understanding of what they're voting for

reader
"and take more taxes from the 50% of people that actually pay them."

Stop lying.

Estimated receipts for fiscal year 2008 were $2.66 trillion. The top three sources are:

* $1.25 trillion - Individual income tax
* $927 billion - Social Security/payroll taxes
* $315 billion - Corporate income tax

You may casually dismiss Social Security taxes as not a "real" tax, but $927 billion is a real number, and EVERYONE pays that on their first dollar earned.

You'll notice that the taxes paid by individuals is nearly 7 times what corporations pay. What do you think about that?

What we need here
What's needed is a good Union Organizer.. For U folks who don't know, and some names are new to me, roy (that's with a very little r) is a Union Organizer of at least that's what he's been spewing the time he's been coming on here..I HAPPEN TO BE A MILITARY RETIREE (25 years) where we didn't need a Union..I later worked for a BIG Union (which will be unnamed)for 20+ years, sometimes as a Steward, so I can speak about the need from both standpoints..Don't let roy needle U!! CHEERS!!

Roy
Other than the trucking company you owned (which I assume was just you, as you mention having had no one to whom you could delegate), have you ever held an executive- or managerial-level position in a large organization (let's define "large" as 50 or more people, just to be specific)?

You say you have "been around" managers and CEOs. What does "being around" them mean? How has this "being around them" given you insight into what they do on a daily basis?

How on earth could you know what their jobs are like without having walked in their shoes? That's like me saying that I know how to be a surgeon because I once visited a hospital and was "around" a lot of surgeons while there.

Give me a break.

jackie
wow i hit a nerve lol.sorry but i have been around enough ceo's and upper managers to know its just not that tough. not for what they are getting paid. like i said before. you could switch the ceo of most companies with the janitor and the only thing you would notice is that the floors don't get swept anymore.

Roy
You are an idiot; a populist fool promoting ignorant class envy.

The CEOS and executives that I know work their butts off for the good of their companies and the employees for whom they feel responsible. The CEOs and executives that I know have given up large chunks of their lives in order to lead their respective organizations. They work long hours, make tough decisions, and have huge responsibility.

Are there "bad" CEOs? Of course. There are also plenty more unmotivated, slacker employees who think that "someone" owes them "something" just for showing up and breathing. Sometimes for not even showing up. Those are the fools who think that Obama and his ever-more-porcine government are going to take care of them.

All we're guaranteed in the Constitution is life, liberty and the PURSUIT of happiness. Not to be spoonfed it.

Get a clue.

By the way Roy
the salaries and bonuses have no effect on our economy.
On the contrary, the actions of the politicians have caused the current problems and they are repeating on a larger scale the same policies that got us here.
They are playing class warfare games with the public with their criticism of big business to hide their own greed and manipulation of the system.

It is a shame, America was a great place.

Roy:
According to your theory Obama is useless too.
Can you understand why any company or country would need a leader?
You are so naive it boggles my mind.

kirk
you just made my point. when i owned a trucking company i made those same decisions everyday. bought and sold equipment. had to learn dot regulations. and i didn't have anyone under me to delegate authority to either.kirk you may earn your paycheck, but those guys don't. we used have a saying at the plant i worked at about the ceo's and upper managers. their jobs were like finding money on the ground.

Great Article - Govt. Vs. Private Sector
My money is in private sector, and for that, I expect a 'good profit' that Obama can't tax:) That is how its going to go in the circles of rich americans who create wealth and invest it. Other americans can just keep the Change and Hope, for a better return in another life time. That is how long it will take their children to pay off the debt levied on them by Obama and socialist democrats.

roy
it is obvious you have never run anything. I am just a maint. manager, at our comp. biggest plant. CEO's make decisions about things like: 1 to buy or sell equipment. 2 Handle gov. regs. 3. They are responsable for everything that happens at all plants. This is just a small example. In my job everyday there are decisions to make that efect our bottom line, and like a CEO you are acountable.
Kirk
PS As a you man I was self employed carpet layer. I also worked the floor for 25+ years as a maint. guy.

Obama's objectives...
Obama has a different objective than a CEO. He plans to implement his (socialist) policies in such a way that criticism is forbidden.

Once he has the "fairness doctrine" in place, and has completed his show trials of key officials in the Bush administration, and used his force of the Justice Department attorneys under Eric Holder to terrorize business leaders, you won't be hearing much criticism!

get real gainor
most ceo's are glorified babbysitters. you could get the janitor to run the company and do just as well. these ceo buffoons are the most overpaid people in the history of the world. they are basically worthless.

................
Unlike real CEOs Obama cannot be fired [until his first term expires] for gross incompetence, malfeasance and corruption.

I would also add, any CEO in America is far more qualified to be president than this pitiful fraud we currently have in the White House.

What about the corporate jet?
Should the CEO of Hope, Inc., sell his private jet? The use of that jet is being paid for by the taxpayers I think. And what about his private helicopter...couldn't that be sold to repay the taxpayers who are loosing their jobs?

I think there is a time for CEO's to enjoy such lavishness, but that time is not now!

reader
ROLFMAO!

Finally!!
Finally, an America I can be proud of. I haven't been so enamored with America since I was a little boy and the President's name was Carter. He raised peanuts and played with nuclear reactors on the side.

By the time we reenact the "fairness" doctrine and take more taxes from the 50% of people that actually pay them, I'll be totally unable to contain myself. I wonder if the Lincoln bedroom will be open to the collatoral damage that is going to start losing their houses while we change to something we hope won't fail the way it has every where else in the world!!
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