Obama Forces Private Businessman Out of Job

The headlines today are shocking- our should be shocking to a country raised on freedom and liberty- a President, one person, acting as a tyrant, is forcing a major business- one of the biggest privately held companies in the world- to fire their CEO in order to gain more power and control over this company. What happened to America?

I'm too stunned, shocked, and saddened to write more, although read these editorials if you want to read some good analysis- the story Obama forces Wagoner out at GM which talks about the situation, this editorial Rick Wagoner's ousting had more to do with politics than his ability to revive GM which provides interesting perspective, and this one by Daniel Howes about Wagoner takes the fall for GM.

By the way, inspired by a comment in General Motors Situation Boils Over, I am going to try to call GM Federal Motors to convey the sense that our government is now the true master of this corporation.

UPDATE: Daniel Howes had a great column in today's Detroit News. Link to it here. Here are some of the better parts of it:

But what the president didn't say Monday, as he detailed his administration's prescription for Detroit's two sickest automakers, is what he actually did -- oust a sitting CEO, GM's Rick Wagoner, and begin the process of remaking a board of directors...

In one swift act, the president effectively overruled the oversight and fiduciary responsibilities of GM's directors, duly elected by the automaker's shareholders, because he could -- and the federal government, officially a lender of $13.4 billion to GM, doesn't own a single share of the automaker.

A chilling message?

"Firing a CEO is usually what a board does," says Peter Henning, a law professor at Wayne State University who worked in the enforcement division of the Securities and Exchange Commission. "We now have a CEO-in-chief ... overseeing large sectors of the economy. We are certainly in a brave new world."

And it looks like this: the federal government, in a bid to "save" companies determined crucial to the economy, is prepared to use whatever thin financial connections it has to them to broom management, void employment contracts, reload boards of directors and, if necessary, force bankruptcies.

The issue is principle and the lengthening arm of government into commerce. How can corporate governance and the fiduciary responsibility of directors to shareholders be so easily usurped to satisfy the political exigencies of the day? Stunning is too mild a word to describe the precedent set here.