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The chief executive
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03/30/09 01:56 PM ET
If you’re looking for a token of Washington’s new power and the draining-away of private-sector autonomy, you need look no further than the ouster on Sunday of Rick Wagoner, chief executive of General Motors.
President Obama, chief executive of America, was dissatisfied with the restructuring plan Wagoner put together for the automaker. The president wanted Wagoner out, asked him to go, and he was gone.
If you’d prefer another example, try this one: Legislation is being crafted on Capitol Hill to control (chief) executive (and other) pay at companies taking big sums of bailout money from the federal government.
So Washington is deciding who should run some of the country’s biggest corporations and also how much they should be paid to do it.
He who pays the piper has always called the tune. Corporations coming cap in hand for billions of dollars of government largesse (as GM, Chrysler and many others have done) cannot demand that Washington abjure interference.
Indeed, Washington’s client corporations are not making such a demand. It is as obvious to them as it is to lawmakers that you cannot both be a client of the government and enjoy autonomy from it. But that’s the point. They can’t be autonomous from it.
They can’t — not now at least — but eventually they must. Obama said on Monday: “These companies and this industry must ultimately stand on their own, not as wards of the state.”
It was right (and a relief) that he spoke these words. For there are millions of people across the country looking askance at Washington’s unprecedented involvement in the day-to-day running of businesses. They are wondering when and where it will end.
Saying the right things is only a token of hope that doing the right things will follow. That will mean allowing capital again to be allocated by the agglomerated wisdom of markets, by individuals rather than their elected representatives, by successful entrepreneurs and judicious venture capitalists.
For the moment, power has drained out of Detroit to Washington, out of Wall Street to Washington and, yes, out of Main Street to Washington. The country is apparently in the mood for active central government, and Obama is certainly delivering it.
But just as a drowning man will clutch at anything to stay afloat, so failing corporations naturally cling to what saves them from going under. By the same token, the country needs to know that when the drowning man is again able to reach the shore unaided, he will not be held back by a helping hand with a vise-like grip.
President Obama, chief executive of America, was dissatisfied with the restructuring plan Wagoner put together for the automaker. The president wanted Wagoner out, asked him to go, and he was gone.
So Washington is deciding who should run some of the country’s biggest corporations and also how much they should be paid to do it.
He who pays the piper has always called the tune. Corporations coming cap in hand for billions of dollars of government largesse (as GM, Chrysler and many others have done) cannot demand that Washington abjure interference.
Indeed, Washington’s client corporations are not making such a demand. It is as obvious to them as it is to lawmakers that you cannot both be a client of the government and enjoy autonomy from it. But that’s the point. They can’t be autonomous from it.
They can’t — not now at least — but eventually they must. Obama said on Monday: “These companies and this industry must ultimately stand on their own, not as wards of the state.”
It was right (and a relief) that he spoke these words. For there are millions of people across the country looking askance at Washington’s unprecedented involvement in the day-to-day running of businesses. They are wondering when and where it will end.
Saying the right things is only a token of hope that doing the right things will follow. That will mean allowing capital again to be allocated by the agglomerated wisdom of markets, by individuals rather than their elected representatives, by successful entrepreneurs and judicious venture capitalists.
For the moment, power has drained out of Detroit to Washington, out of Wall Street to Washington and, yes, out of Main Street to Washington. The country is apparently in the mood for active central government, and Obama is certainly delivering it.
But just as a drowning man will clutch at anything to stay afloat, so failing corporations naturally cling to what saves them from going under. By the same token, the country needs to know that when the drowning man is again able to reach the shore unaided, he will not be held back by a helping hand with a vise-like grip.
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