First, David Brooks' Car Dealer in Chief:
Today, G.M. and Chrysler have once again come up with restructuring plans. By an amazing coincidence, the plans are again insufficient. In an extremely precedented move, the Obama administration has decided that the best time for possible bankruptcy is — a few months from now. The restructuring will continue.
But this, President Obama declares, is G.M.’s last chance. Honestly. Really.
Could this really be true? Could the Harvard Business Review’s longest-running soap opera possibly be coming to an end? Could President Obama really scare the restructural recidivists in Detroit into coming up with changes big enough to do the job?
Well, the president certainly acted tough on Monday. In a show of force, he released plans from his Office of People Who Are Much Smarter Than You Are. These plans insert the government into the car business in all sorts of ways. They pick winners (new C.E.O. Fritz Henderson) and losers (Rick Wagoner). They basically send Chrysler off into the sunset. Joe Biden will be doing car commercials within weeks.
"Firing a CEO is usually what a board does," says Peter Henning, a law professor at Wayne State University who worked in the enforcement division of the Securities and Exchange Commission. "We now have a CEO-in-chief ... overseeing large sectors of the economy. We are certainly in a brave new world."
The issue is principle and the lengthening arm of government into commerce. How can corporate governance and the fiduciary responsibility of directors to shareholders be so easily usurped to satisfy the political exigencies of the day? Stunning is too mild a word to describe the precedent set here.