March 30, 2009

Two Dangerous Precedents

The reaction from the right has been appropriately visceral. It has been as strong as to be expected. So far though, it's been self contained. In other words there is not yet a groundswell of opposition to the Presidential over-reach in forcing GM CEO Rick Wagoner to resign. There have not been million man marches protesting this lunacy.

What this amounts to is one dangerous precedent for America. The United States is supposed to be a democracy. It is supposed to be a free market-based system. It is beelining away from that very, very quickly - on both counts. The government should not be dictating operating conditions to companies. That's called fascism.

Wikipedia contains the following definition of fascism;

Fascism is a radical, authoritarian nationalist ideology that aims to create a
single-party state with a government led by a dictator who seeks national unity
and development by requiring individuals to subordinate self-interest to the
collective interest
of the nation or race. Fascist movements promote violence
between nations, political factions, and races as part of a social Darwinist and
militarist stance that views violence between these groups as a natural and
positive part of evolution.

He may eschew the violent portion of this definition but certainly the ACORNs of the world prove there's an adherence to the class warfare side of the definition as well. Socialist goals, fascist methodologies. Sounds like some bad egg historical figure.

The government does not own GM (not yet anyway), the provided bailout money to GM. They have a right to tie conditions to the bailout money as far as things like re-payment schedules, and changing the conditions to the current environment that led to the problem. Doing that as part of the conditions to the opening of purse strings, is reasonable. So is the company choosing to forgo the bailout money. And so is the company being left to it's own devices to meet the agreed upon conditions.

Otherwise the government is by proxy, assuming ownership of a private company. Do I think the US government can run an automobile company better than the private sector? Of course not - they couldn't run a lemonade stand as well as a village idiot.

The point is that this is meddlesome, it is autocratic and it treads on ground that is anathema to free markets, individualism and freedom itself. Some may feel that Wagoner was not the right man for the job. Some may feel that the conditions imposed for further bailout money are justifiably harsh and Wagoner is paying the price because he wasn't strict enough. Regardless, would you want the government coming into your business and telling you to resign? Or into your place of work and telling them to fire you?

It's just not right. What's worse, is it's going unopposed. Which brings us to dangerous precedent number two. Why did Wagoner acquiesce?

If I were Wagoner I think I would have called the administration's bluff. That power to intimidate and coerce did not exist before yesterday. If Wagoner had said no, then what?

GM would have been denied bailout money. And they would have had to file for bankruptcy protection and then the union would be forced to capitulate on it's positions. And that flies in the face of the Obama constituency. Then you would have seen the Obama administration either really ramp up it's bullying or else, more likely capitulate themselves.

They have already deemed GM too important to fail. And then they tried to blackmail the CEO into quitting for pure political reasons they would have had to back down and paid GM anyway.

It's a messed up situation no matter how it played out, but by standing firm, Wagoner could have exposed the administration for what it really is - bullies and/or acting without thinking and not really in control of that which they claim to be in control. That would have been a news day worth seeing.


  1. If Wagoner had refused...Are you also thinking of the Hank Rearden trial?

  2. I wasn't actually, but it's an intresting comparison, and there are some similarities.

    "I could say to you that you do not serve the public good - that nobody's good can be achieved at the price of human sacrifices - that when you violate the rights of one man, you have violated the right of all, and a public of rightless creatures is doomed to destruction." Hank Rearden

  3. Actually, I believe the power did exist as evidenced by some of the AIG excutives returning their bonuses after pressure from the White House and Congress.

    I agree. Wagoner should not have resigned. And now I have to go Google Hank Rearden.

  4. Paula - Good point about the AIG bonuses. As a correction I should say that the power didn't exist before this month.

  5. Dean-I was struck by how Obama needs Wagoner's cooperation to hide the gun to his head. "The president asked Wagoner to step down and he agreed" sounds better than "The president ordered Wagoner to leave." It would be a great joke if it weren't so serious: the things the government are doing are almost word for word out of "Atlas Shrugged."

  6. Austin - Funny, I was just reading a quote from John Galt.

    In either case, no matter if Obama requested it or ordered it, it's undue influence and just plain wrong.

  7. Well of course it's wrong, but the sheeple will buy it, thinking there really is a difference between a strong suggestion and an order--just like they were okay with the government overthrowing valid contracts to collect the AIG bonuses.

  8. The thing is complacency among Americans is a bigger threat to freedom than Obama is. If the people wouldn't let him get away with the things he's doing, he wouldn't do them. Eveentually he'd even stop trying because he'd know people wouldn't stand for it. If they do stand for it, or embrace it, they deserve the monicker sheeple.

    I still have hope that Obama's socialist efforts can be brought to a grinding halt and after 2010 or 2012 begun to be reversed. I'm a glass half full kind of guy.


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