Monday, March 30, 2009
Time to back off Mr. President
In my last article, I expressed my anger and concern regarding Treasury Secretary Geithner’s proposal to assert control over additional financial sectors other than banking. If I was worried about excessive government intervention then; I am incensed now. The actions of the Obama administration over the past two days in regard to the auto industry are further evidence of this new hands-on approach. As stated in the previous article: Our capitalistic system has always been based on the laissez faire premise. Translated; this equates to hands-off. I feel it is necessary to warn you that the material I have read pertaining to these latest maneuvers have raised more questions for me than answers. I fear this article will do the same for you.
According to the New York Times, General Motors’ CEO Rick Wagoner resigned yesterday due to demands placed upon the auto giant by the White House. It appears that in order for G.M. to receive the additional $6 billion needed to stay afloat; certain contingencies must be met. The resignation of Wagoner was one of those contingencies. Chrysler is also being subjected to these borderline extortion tactics. They have been ordered to form a partnership with Fiat, an Italian based corporation, within 30 days or risk falling victim to the wrath of President Obama. Chrysler is also required to reduce their unsecured debts significantly and cut their health care financial obligations. Does anyone else see the paradox here? The government is demanding that a corporation reduce their debt while they are in the process of seeking aid in order to remain solvent. I am very confused, again!
President Obama has stated publicly that in order for these companies to receive additional aid, there must be a “willingness to make some pretty drastic changes.” It would be difficult to find anyone that would disagree with that but I’m not sure they would approve of the President, or his “task force”, being the ones that decide which changes must be made. Wouldn’t it be wonderful if we were able to demand personnel changes in Congress whenever we feel they haven’t performed up to our standards? Say goodbye to the Senate Banking Committee. Adios to the House Committee on Appropriations. It is important to note that Wagoner’s successor will be Frederick A. Henderson; General Motors’ very own president and chief operating officer. Apparently, he had nothing to do with the failure of G.M. Does anyone else smell a witch hunt?
A related article in the Los Angeles Times reports that President Obama has named Edward B. Montgomery to be director of auto recovery. His primary responsibility will be to provide support for laid-off workers and their families. Unfortunately, Dr. Phil was either unavailable or refused the offer. Considering that Montgomery may very well be strung up on Main St. in Detroit; Dr. Phil made a wise choice. How the hell is Montgomery expected to oversee the recovery process of an industry when he is dealing with people who are no longer a part of that industry? Don’t say I didn’t warn you! I have done a considerable amount of head scratching while researching the events of these last two days.
I could go on and on searching for rational explanations to these moves. The problem is that I continue to come back to the same conclusion. This is all a ploy to satisfy Obama’s desire to control still more facets of our lives. In the case of the auto industry; Obama has basically demanded that Chrysler and General Motors ignore their contractual obligations to the United Auto Workers Union regarding health care. He has given each company 60 days to cut their health care contributions to retirees in half. I certainly hope this is not his idea of health care reform. If in fact it is, all he needs to do is to order an across-the-board cut in corporate contributions to health care. Since he is determined to insinuate himself into arenas that the government has no right being involved in to begin with; this method of cutting health care costs would be rather significant. Though I was originally a proponent of the President and his plans; I am quickly realizing that these plans were also designed to force unprecedented government intervention.