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on Tuesday, March 31st, 2009 at 11:52 am by Radley Balko
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Man!!! Too strange. my mailman came in 5 minutes ago and we just had this discussion. He named 3 people that had done some pretty serious shit at the local post office and the quickest the govt could get rid of any of them was three years.
Never should be given public funds. Politicians LIVE on excusing one bad action because of a previous bad action. Government competing with private enterprise (just one of many things wrong with all the bailouts) is never a good thing.
Obama is smarter than firing him. He asked for his resignation. Splittin’ hairs while Rome burns.
I wonder if I’m reading thune’s comment different than some of you… I completely agree with the notion that a truly private company, as I understand it, should be self-sufficient. If you have to rely on funds from the federal government, then you’re at their mercy (just as states are when they rely on federal handouts). I think the real problem here is that this can of worms would never have been opened in the first place if Obama would have stuck with the title of Commander-In-Chief rather than C.E.O.-In-Chief. But aren’t all these companies at the very least quasi-public now?
I’m leaning toward Club Med’s reading of Thune’s comment. I hope Thune didn’t mean to imply that firing CEO’s an imposing a 90% tax rate is justified by companies accepting bailout funds. But it does at the very least make those companies welfare queens, and to call them private at this point is rather charitable.
Not to debate the meaning of Thune, but many people have the attitude of the literal reading of that comment.
If that attitude really, really sticks in the political system, someday all of us are going to be ordered into a job or city or whatever because we received a federally subsidied student loan or pell grant.
I can envision the letter now: “As per the Americans Who Love Children, Progress, and Goodness Act, your job has been moved to North Dakota (or wherever). You have two weeks to report.”
#8…I worked on a DoD-funded scholarship that required recipients to work in some capacity in “national security” either doing an internship in the government or getting a Federal job post-graduation or possibly working as a contractor for the Feds. If they failed this requirement within 5 years of having received the “scholarship”, they had to pay it back.
OK, I don’t know everything about which I speak (don’t have to, it’s the internets!) but my understanding of this deal is that certain terms regarding the reporting of how the money was used and how GM was going to adjust and adapt their business model were set forth as a condition of receiving the bailout money.
This CEO sat in front of the panel and agreed to those terms. As a condition of receiving public bailout funds he would track spending and develop and offer up an action plan for changing the company’s business to become viable.
His performance in meeting those conditions was unsatisfactory. Or near as I can tell, he took the money and did nothing to which he agreed. So he was told to leave.
I am as worried as the next person about the nationalization of these businesses. But at the same time, many of us said that if this bailout money was going to be handed out (and many of us disagreed that it should) there should at least be some accountability to go along with it.
This situation seems to be exactly what we asked for. He took the money, screwed the pooch and got canned. It is what should have happened to the heads of all the financial companies that took bailout funds.
If I am missing part of this story, please let me know.
Another thought. Will Obama void the union contracts at GM? Or just blame the next poor sap that gets inserted at the top. My guess is you answered that by the time you read it.
The union contracts are the albatross around the neck of GM. The numbers aren’t as guady as the AIG executive bonuses, but the numbers of UAW employees is so great its going to get ugly. 7,500 employees took $45,000 buyouts since the bail out.
That’s $330,000,000 of public monies if my back of the envelope math is right. And that’s only about 10% of UAW workers that are at GM. And those are just the guys we are paying NOT to work. Not the ones who will work though the contract.
The unions are renegotiating their contracts. In fact, this was a condition of GM receiving bailout money. GOP legislators demanded this. Nobody seemed to worry back then about the government meddling in private contacts.
When common workers get the shaft, it’s all part of the bailout process. When a CEO is booted, then it’s all “OMFG, the Preznit is taking over a private company”.
I guess I don’t understand the libertarian position on this. Obviously you don’t want a bailout to begin with, but assuming that you’re stuck with one, why is it better to just hand out cash without any conditions?
I think I see it just like you do. When you dance with the devil…
@#4 | Michael Pack #1,That means there are no private grain farms or pro sports teams in your view.
Well, yea, kinda. Avoiding handing out government money is by far the optimal solution.
Attaching strings to the government cash, as to make the cash more expensive and less desirable, is treating the symptoms, not the disease.
Sometimes you gotta’ work the system. This situation would be a lot worse if the government assumes a permanent position in the auto companies. I don’t think that’s the plan though…I’m under the impression we are loan-holders, not share holders. The loan came with strings attached, which may discourage more loan-seeking from the other auto companies.
I guess I don’t understand the libertarian position on this.
There is no libertarian position yet. That’s why we come here…to debate and hash it out. :)
And you are exactly right in stating the dilemma. Either we stick to our guns and get in bed with evil dudes at the auto company who are ripping us off, or we be pragmatic and get in bed with evil dudes in the government. Supporting our beliefs will put us in a worse position (more bailout requests), while bending them will promote the policies we want to see (less bailout requests). Giant douche and a turd sandwich, dude.
Personally, I wish Obama had never given out the cash. But when he did, I wish he had insisted on even tougher terms.
I can only explain my position, and though I consider myself
(l)ibertarian I don’t speak for the great unwashed masses of us, or them.
My view is that the strings attached to bailout monies are politically aimed. They do nothing to return the company to profitability (presumably the purpose of any company). The strings are pointless unless they are simple and only serve the end goal of profitability. Also I like conditions to be fully stated before hand, and not moving goalposts. An acceptable condition to me would be. “Return to profitability in 4 quarters, or we call our loans and can force you to liquidate assets.”
Just ask yourself, why would Geithner who’s never worked in any industry but government be better at running a for profit business?
I’m as appalled as anyone to see the federal government meddling in the affairs of the auto companies. I’m struck, however, by the fact that the auto companies approached washington on their knees, begging to be meddled with. Given that, I think the blame probably lies with the executives who mismanaged their companies into such a vulnerable state, not the President who happens to be in office when their silly schemes finally crash and burn.
I see a parallel between the AIG situation and the GM situation.
AIG sold insurance against an event that they didn’t have the resources to cover, making huge profit on the upside when their bets paid off, and leaving the taxpayer stuck holding the bag when their bets finally went bad. They’re thieves in this sense: Every dime of profit they collected in premiums on their bogus insurance properly belongs to the taxpayers who are now paying off their policyholders.
The key is that they privatized the upside, while sticking the treasury with the downside.
And now, GM.
Just like AIG, they took positions that in the long term spelled certain disaster, but in the near term boosted their profits. Simply put, they bargained for lower wages, and in return offered their workers more generous pension and health care benefits than they company could actually pay. In the short term, the company reaped the benefits of a cheaper workforce and higher profits. In the long term, their size ensures that when their bets go bad, as they inevitably must, the taxpayer is left covering their bets.
Much the same as AIG, GM collected the benefits in the short term, leaving the long-term costs as a mess for someone else to clean up.
I don’t think there can be a libertarian position, since the situation is completely unlibertarian from the get-go. It’s sort of like starting a hypothetical with the statement, “Let’s say Jesus never existed…” and then asking what the Christian position would be. We can debate which is the least crappy scenario given the circumstances we find ourselves in, but I don’t know if we can answer the debate based on libertarian principles.
“If you don’t want this sort of thing happening, don’t accept public money. Very, very, very simple.”
What a horrible situation our government creates!
Seriously, do your best to be profitable…then see your competition get a hand-out from the government.
The state has effectively taken money from us all (including Ford) and given it to Ford’s rival (because they sucked).
Honestly, it’d be very hard to refuse the money (even with the strings attached).
Dr. Kenneth Noisewater |
April 1st, 2009 at 9:06 am
Interestingly enough, Ford isn’t pissing and moaning about the situation — possibly because they know that if GM and Chrysler go down, the supply chain that provides all of the Big Three with their parts goes down with them.
Please point out which of the President’s ten enumerated powers grants him the authority to fire ANYONE.
There are questions in legal cases as to whether or not he can get rid of appointees without the approval of the Senate.
If it’s not in his delegated powers, maybe it can be pointed out in legislation but if it is in such legislation, please point out which of Congress 25 enumerated powers provides the authority to give the President such power.
Or maybe it;s just another violation of the Constitution, you know, that set of explicit, extremely limited rules for the operation of the government of our country that no one seems to understand and fewer want functioning. If it ain’t there in writing, it ain’t given and anyone exercising a power that is not delegated has violated the oath of office.
#33) Obama didn’t fire anyone. He resigned. He had the option of staying, but that would have meant no welfare for GM. The welfare people put conditions on poor people all the time – why do the rich think it’ll be any different for them? Welfare sucks, and it’s supposed to suck. You’re supposed to want off it asap. If any corporation on welfare is complaining, good. That means it’s working.