President Barack “the Redistributor” Obama says he has no interest in running General Motors. Too late. When you fire the CEO, you run the company.
It’s always prudent not to read too much into one government action, or sometimes even two. But by the time you see three consistent actions you can often discern a pattern. We’ve long since passed three actions of massive government intervention in the management of our economy.
We’ve seen Barney Frank say that whenever government bailout money secures a majority stake in a company, the government should assert its rights as the controlling shareholder. Then we saw the stimulus bill and the budget, all of which set forth a long-term blueprint for permanent, massive involvement by the federal government in the private sector.
Next, the president announced that GM and Chrysler needed to do more to satisfy him regarding their business plans, and then he fired GM’s CEO. Pressing ahead, Secretary Geithner says he needs the power to decide which companies could damage the U.S. economy if they failed, and then have the power to influence their management decisions.
Whenever government takes over a business, it runs it according to political pressures and special interests not sound business practices. So the problems will continue, with billions more lost in taxpayer dollars and bankruptcy an almost certainty for the American car companies.
GM now has a defacto CEO who distrusts the free market, advocates centralized planning of the economy and government control of major industries. Who’s next?