March 31, 2008 [LINK / comment]

Obama "rescues" GM, Chrysler

Day after day, the news from Washington keeps getting more bizarre, and yet the American people seem to be accepting President Obama's agenda of "change," blissfully unaware that we are on a "highway to hell." The President held a press conference to announce his plan to "rescue" General Motors and Chrysler, preceded by the resignation of GM's CEO Richard Wagoner. Some sources say Obama essentially "fired" him, using the threat of withholding bailout money, while others characterize the decision in less coercive ways. It seems that Obama is sending a message that any corporation that does not bend to his will will pay a heavy price. In contrast to the relatively soft approach to the big banks, he is putting extreme pressure on the auto makers, declaring that bankruptcy laws may be used to facilitate corporate restructuring. See the Washington Post. There seems to be little doubt that the President's own ideas about what kind of cars should be made in Detroit will count for more than market demand.

Obama's tough stance is putting the heads of corporations in other industries that their heads may be next on the chopping block, if they don't bow to the President's will. This caused the stock market to drop sharply once again, after a rare interval of growth last week. If the Washington Post-ABC News polls are correct, nearly two-thirds of the American people still support Obama's performance and/or his agenda. Most people don't hold him responsible for the economic hardships, blaming corporate executives instead. Seldom has capitalism been held in such low esteem in this country.

In class today, I challenged my students to find the part of the U.S. Constitution where it grants the president the power to dismiss private sector business executives. No one could, of course. Most Americans are either so cynical about politics or so gullible that they just don't care whether the President's actions are constitutional or not. I suppose if an Obama supporter were pressed on the matter and asked to justify what Obama did in this case, they would probably say it is an "inherent" power that stems from the fact that we are presently in a national emergency. It is safe to say that President Obama's audacious power grab is exactly what the framers of the constitution were trying to prevent -- the excessive concentration of power in the hands of a single ... tyrant. There. I said it.