March 31, 2009
The Great Dictator, part Deux
In the Great Dictator -- which won the Watcher's Council award for non-members, only the second time we've ever managed that! -- we wrote:
But the Great Dictator of 2009 may turn out to be glib huckster from Hawaii by way of Chicago named Barack H. Obama; for the administration appears poised to enact rules that could end up completely controlling all executive compensation for every major company that has anything to do with financial matters, or is publicly held, or has any sort of requirement to report anything at all to the SEC -- even including companies that never took a dime of TARP or stimulus money.
Today, we read the following chilling report of our Childe President finding he has some new powers, hitherto unknown to be in the Constitution:
President Barack Obama asserted unprecedented government control over the auto industry Monday, rejecting turnaround plans from General Motors and Chrysler and raising the prospect of controlled bankruptcy for either ailing auto giant. Eager to reassure consumers, Obama also announced the federal government would immediately begin backing the warranties that new car buyers receive -- a step designed to signal that it is safe to purchase U.S.-made autos and trucks despite the distress of the industry.
In a statement read at the White House, Obama said he was "absolutely committed" to the survival of a domestic auto industry that can compete internationally. And yet, "our auto industry is not moving in the right direction fast enough," he added.
With his words, Obama underscored the extent to which the government is now dictating terms to two of the country's iconic corporations, much as it has already taken an ownership stake in banks, the insurance giant AIG and housing titans Fannie Mae and Freddie Mac.
In an extraordinary move, the administration forced the departure of Rick Wagoner as CEO of General Motors Corp. over the weekend, and implicit in Obama's remarks was that the government holds the ability to pull the plug on that company or Chrysler.
The New York Times gives a little more detail about the detailed level of the terms that Barack H. Obama is now "dictating" to a private company:
“And so today, I am announcing that my administration will offer G.M. and Chrysler a limited period of time to work with creditors, unions and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success,” Mr. Obama said.
Speaking a day after the White House pushed out the chairman of G.M., Mr. Obama said Chrysler has been instructed to form a partnership with the Italian automaker Fiat within 30 days as conditions for receiving more government aid.
Now it's certainly true that GM did, in fact, suckle from the federal teat; and that of course lends at least a little legitimacy to the White House's demand for some oversight. We all know that above everything, Obama is concerned about keeping a gimlet eye on expenditures of public funds... hence his repeated tongue-lashings of George W. Bush during the 2008 campaign for having run up deficits of $100 billion, $200 billion -- once even $400 billion!
But the new Obama plan goes far beyond ensuring that GM is using its corporate welfare wisely; Barack Obama evidently believes he knows how to build and sell cars better than do GM executives. He dictates not only how much they can pay their top brass, he wants to control who that top brass will be. What's next -- will the president assert the authority to select the next CEO directly? Does the government post of GM CEO require Senate confirmation?
(Perhaps he'll pick Chas Freeman; I understand he's between jobs right now. And realistically, Freeman is no more an ignoramus about the automobile industry than he is about intelligence, his previous and now withdrawn appointment.)
Will the president begin setting prices for various models? Choosing what color options will be available? Taking over the service contract? Oh, wait, he already did that.
The final step of a liberal fascist takeover of the industry would be to control the wages of all employees, to be able to set them however they want... thus funneling workers into favored industries or even particular companies and away from others: Imagine an earmark, inserted in the dead of night during the reconciliation phase of legislation, raising auto-worker wages at plants in one state and lowered them in an adjoining state. What effect might that have on the labor market and government control of the economy? (And what a fearsome weapon to wield against Obama's political enemies! But I'm certain that aspect of wage controls has never occurred to the One.)
By a bizarre coincidence, that scheme is exactly the subject of the Great Dictator, part (C). Stay tuned...
Hatched by Dafydd on this day, March 31, 2009, at the time of 5:44 PM
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If you want a picture of the future, imagine an iron fist clutching a smiley face -- forever. The first two posts of this miniseries were: The Great Dictator The Great Dictator, part Deux We ended the last segment with... [Read More]
Tracked on April 2, 2009 5:09 AM
The following hissed in response by: Dick E
This afternoon on PBS a woman interviewee in a brief quote said, “Barack Obama is such an intelligent businessman.”
Considering the source, I wasn’t sure whether the irony was intentional or not.
The following hissed in response by: Geoman
This from a guy who, arguably, has never even managed as much as a lemonade stand.
You know, I've always wondered. Why don't the big three build small cars in low wage countries and import them to the U.S.? This is what foreign car makers do all the time.
Oh...wait a minute. There is that pesky 1975 fuel economy law. Known as the "two fleets" rule, it forces Detroit to make its cheap small cars in high-wage domestic UAW factories, even if it means losing money on every car.
Obama will never allow GM to go bankrupt, because that would mean crap like the two fleets rule, UAW contracts, and other stuff would go out the window.
My expectation - The UAW ends up owning GM (by way of the federal government), and runs the whole mess into a tree.
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