GM, now renamed Government Motors, has a new CEO: President Barack Obama. By replacing the head of the company and demanding a restructuring of its board in return for further financial TARP aid, Obama has taken upon himself the responsibility for the future of the company. As Gen. Colin Powell said when Bush was considering invading Iraq and toppling the Saddam Hussein government, "If you break it, you own it." Now it is Obama's company.
This move will backfire big-time! The auto giant is very, very unlikely to be saved by this current TARP infusion. Doubtless, it will need more in the near term. But the resentment now focused on the management of the company will then turn to Obama. Having demanded a replacement of the management, it is he who will be held responsible for the company's future.
And, each time GM asks for more money, Obama will face a choice: take personal responsibility for laying off 100,000 autoworkers or anteing up the additional cash. By intruding himself so deeply into the management of the company, Obama makes himself central to its future. If Obama lets the company fail, having already extended credit, he will have all of Michigan on his case. If he keeps coming up with more and more tax money, he will earn the contempt of the voters.
Socialism has its price. By taking over the management of a company, you become the determinant of its fate in the public's mind.
Obama does not seem to realize that government takeover is the beginning, not the end, of the problem. He should have stuck with being president and leave making cars to others.
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