When the Godfather helps you out, you owe the Godfather. And you’d better comply when the favor is called in. That appears to be the model the Obama administration is following when it comes to companies that accept federal bailout money — and, in one case, the “favors” owed are being called in.
General Motors accepted $9.4 billion dollars in bailout money, and has a request pending for another $16.6 billion. The latter hasn’t been granted, but we now see some indication of the unwritten price for those loans.
First up, the obligatory human sacrifice.
Rick Wagoner was not a great CEO for General Motors. Indeed, it’s arguable that he should have been forced out a long time ago. But it should not have been done by the federal government. That is simply too much power for the government to exert over private industry.
In this case, though, it’s being justified by the government loaning the troubled giant so much money. As the old saying goes, when you take the king’s gold, you play the king’s tune.
Traditionally, such “favors” would include the hiring of various politicians’ and supporters’ relatives, channeling contracts to preferred companies and vendors, and the like. But that’s “old” politics. The Obama administration is all about “new” politics. That means that simple greed takes a back seat to ideology.
Wagoner’s head is most likely the first demand from the Obama administration. It’s not hard to see future demands GM may face:
• The death of SUVs.
• More development resources into hybrid, electric, hydrogen, and other alternative-fuel vehicles.
• More concessions to the UAW and other unions.
• GM changing its tune on a host of issues, such as fuel efficiency standards, tightening emissions, and safety regulations.
In other words, GM will be used to pay off various Democratic interests and constituencies.
This should come as no surprise. As Obama himself said in justifying his actions, “I won.” To the victor belong the spoils.
The treatment of GM should stand as a stark reminder that all things from the federal government come at a very hefty price. There is no way to calculate that price before you sign away your independence.
