On the one hand, it's pretty clear that there needs to be a profound shakeup at General Motors. Rick Waggoner has run the company into the ground -- perhaps he was overtaken by forces much larger than the company, but on the other hand, things started going very badly for GM long before the financial crisis precipitated the general recession. And for whatever reason, the stockholders of GM failed to take appropriate actions to remove Waggoner from his position of authority, something that needed to be done.
But on the other hand, I really don't like that it's the government doing it. I have less of a problem with that if it's happening by way of a court order in a Chapter 11 bankruptcy proceeding, but I do have a problem with the government throwing billions of dollars at GM* and then saying who gets to run the show there and who gets canned.
I've found the spectacle of conservatives crying "Oh noes! Beware the creeping socialism!" very distasteful. But I find the small truths beneath that panic equally distasteful.
* You could put a period right there and it would be an equally true statement.
Yeah, but would you feel weird about it if it were some big private company?
ReplyDeleteWhen bigger or more stable companies rescue small or weaker ones, they routinely demand conditions. Sometimes those conditions are, and should be, a change of management. That's prudent. Sometimes the management sucks and that's part of the reason the company needs rescuing. If the government is going to be rescuing companies (and I don't think it should), then I think it ought to use the same fiscally prudent measures that a private rescuer would use.
It makes us feel strange. But I think that points to a underlying justified discomfort with the government bailing out in the first place, not with the particular condition.
I'm waiting for someone to point out that GM and Chrysler have choices. They don't have to take government's money (our money) and thus don't have to take orders from the government.
ReplyDeletePrivate companies are ajsking for money and accepting various conditions in return.
No one is holding a gun to their heads.