Shareholder Interest?

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According to the morning news, General Motors CEO Rick Wagoner has been asked to resign by Obama and his administration as a condition of accepting more of your tax money to "rescue" the automobile maker.

I for one would not argue that Wagoner has managed GM so well he should stay. Nor would I argue against the idea that he should have long ago been dismissed from his position with GM.

But isn't that the job of the company's directors? For that matter, why doesn't Obama fire the board of directors as well. After all, they have oversight responsibility of the actions of the CEO.

For that matter, isn't the resignation of a CEO the expected outcome of a bankruptcy reorganization? Could we not have saved a great deal of taxpayer money by simply letting GM endure the usual course of free market action -- a bankruptcy?

If any readers thought for one minute we have not de facto nationalized the auto industry, the fact that the president can, by whim or design, terminate the employment of the CEO of an ostensibly private corporation should change your mind. The action further has to lead us to the conclusion that every banking and insurance CEO now serves at the pleasure of the president of the United States rather than for the benefit of the shareholder.

While we desperately need regulations and oversight to ensure that boards of directors really act in the best interest of the holder of common shares, instead we get a powerplay to nationalize heavy industry.

Oh, this doesn't affect you? If you participate in a union pension plan it probably does. If you own a 401K with a broad stock mutual fund, it likely does. Basically, the chances are high that this action affects you both in your retirement prospects and in future much higher taxes to pay for this nationalization.

In fact, this action casts the specter of government interference and control of any business which employs you, if not now then sometime in the future. Consequently, we need to conclude that we are now a socialist nation if not by law, then by the fact of the actions we so meekly let this president take.

By the way, the Obama administration has also discovered that Chrysler is not a viable stand-alone corporation. Odd this should be discovered after handing it tons of your money. But not to worry, the administration says it 'stands behind' Chrysler warranties. So I guess if you have problems with your Charger, or 300M, you should drive it over to the Post Office for repairs.

It is hard to be enthusiastic about these events.
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