So GM CEO Rick Wagoner is gone. I don’t have a personal dog in that fight — while I drive a GM vehicle (which I like very much, thank you), I don’t own any GM stock and can always buy from the multitude of other auto manufacturers if I want. However, I don’t believe that at any time in the history of our country has the forced retirement of a CEO of a publicly traded company been demanded and announced by the President of the United States.
GM (and Chrysler) have received ~$17 billion in bailout money and are asking for another $21 billion. This amount is 1/20th of the original TARP funds. Why hasn’t President Obama fired the head of any of the banks who’ve received far more money than this without any oversight or transparency? Because Tim Geithner and his Goldman Sachs buddies are calling those shots and these bank leaders are friends. And Congress can always pass after-the-fact retribution legislation to target anyone who is deemed “a friend no longer” (aka AIG retention bonus recipients).
In other words, if you are a friend of the Administration you receive billions & billions in aid with no oversight or transparency, but if you are not a friend, you will be fired and replaced with a friend. That is crony capitalism and is a quick elevator ride to economic ruin. Who will invest in the Public-Private Partnership for toxic assets if the President & Congress will change the rules after the fact?
Give… the… money… back….
During World War II we forced the auto makers to stop making cars and start building tanks and planes. American capitalism is agile enough to weather the storms. GM has been around for 100 years, been the number 1 car maker for most of that time up till 2008 now it’s neck and neck for number 1. With 4% of the world’s population, it is quite a feat that our car companies control such a disproportionate market share. When was capitalism not crony capitalism? I don’t consider the term pejorative – that business and government are tied together by who you know, what connections you have – that is capitalism.
Bill, Bill, Bill. This is getting to be quite a bad habit for you. I do wish that you would post something factual. We didn’t force them, we issued contracts with them and paid them. GM has not been around for 100 years (just check your local history to know the role that Pierre du Pont played in its development — its a really good story — he’s the one with Kettering and Sloan that got them profitable and passed Ford).
Charlie, Charlie, Charlie. You must love breaking my chops.
You keep issuing corrections on things that are already correct. GM was started in 1908. Is that not 100 or so years or is this more complicated than I think it is?
If Ford stops making cars tomorrow and starts making guns at the behest of Uncle Sam, I would say they are being forced, coerced, arm twisted, taken over, managed, whatever. My poing was that during World War II capitalism was pretty much suspended and we came back strong.
Now the “getting to be a bad habit” snarkiness needs to be answered. The last time you mistakenly corrected my post was in response to me saying the Delaware state treasury was flush during the real estate boom. You jumped at the chance to point out the state does not benefit from real estate transfer tax. Not sure why you needed to mention that, I never said we did. Problem now is, I have to be really really careful about what stats I use. I prefer to wing it.
Bill:
I stand corrected. From GM’s website: “General Motors was founded by William “Billy” Durant on September 16, 1908… At its inception GM held only the Buick Motor Company, but in a matter of years would acquire more than 20 companies including Oldsmobile, Cadillac, and Oakland, today known as Pontiac.” (Note: From Wikipedia – Durant almost bankrupted GM by 1910 and was forced out. He started Chevrolet and made enough money to buy back control of GM in ~1916, which he controlled until 1920, when again he was forced out due to financial issues, this time by Pierre du Pont, who finally made it profitable.)
So, yes the corporate shell existed. Oldsmobile actually started in 1897, which is where the GM website timeline starts.
Another note of clarification: the State does benefit from the real estate transfer tax. I simply showed that it is a small portion of the budget and that the State’s coffers were not “flush” in 2002. All snarkiness aside.
At least I have the intellectual honesty to admit my errors.
Charlie, I appreciate your honesty, intellectually and otherwise. I knew there was some connection with DuPont and GM – it’s an interesting history. I notice GM was world number one again in recent sales. My point was and is “crony capitalism” is an oxymoron. Hard to be a really powerhouse of a capitalist without having cronies all over the place.
Now here is one for you – no snarkiness intended. With all the talk about Depression and FDR I was using the Google and came across material claiming DuPonts and other industrialist of the age tried to recruit a decorated war hero ( Gen. Smedley Butler) to stage a coup to unseat FDR because of fears that wealth was being redistributed? I thought for sure it was an urban legend but appears to be real history?
“Crony Capitalism” doesn’t mean that one doesn’t have cronies. It means that the ruler’s cronies run the economy. When the President starts to choose who runs what company, that is, by definition, crony capitalism.
I’ve never really looked into the Gen. Butler story, but have heard about it. Given that one of FDR’s kids was married off to a du Pont, I guess that they decided to make love and not war.