Government Now Firing Private Company Executives

While GM’s Chief Executive Officer Rick Wagoner probably deserved to be fired it is still alarming to know that the US government has further expanded its role and now is in the hiring and firing business at private sector firms. Who knows how far this will eventually go?

Two things are for sure. If you have accepted bailout money from Uncle Sam you had better ask how high when your generous Uncle demands that you jump. In addition, you should note that it is also a risky thing to fly to Washington in your corporate jet to beg for bailout money from congress. Wagoner received a very public toasting for that expensive jet trip.

“On Friday I was in Washington for a meeting with administration officials,” Wagoner said in a statement. “In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have.” I guess that the message to Wagoner was no money for GM unless you fall on your sword. Wagoner was probably sick at being at the end of the administration’s string anyhow. Taking early retirement funded by multi millions stashed away from happier days at GM should help to reduce the embarrassment of a public sacking.

The Obama administration’s efforts to bailout GM is yet another example of how trying to sustain the unsustainable is a suckers game. And it is the American taxpayer who is being suckered. Almost certainly GM will end up in bankruptcy. That will be after additional billions have been wasted trying to avoid the unavoidable.

Obama and his government can not overcome the destructive forces of capitalism that have been unleashed. That is how capitalism is supposed to work. When you make bad decisions and bad investments your business is supposed to fail. The government may be able to slow the process down but that only extends the pain.

2009 will be the year of reckoning for the Obama administration. Bailouts will be out and bankruptcies will be in.