Doing the Jobs Americans Won't Do

Lots of noise being made over the governement's firing of Rick Waggoner as a condition of further bailouts to GM. Theoretically, it is disquieting that the gov't is now deciding who should or should not managing major multi-national corporations like GM. but I am not feeling disquieted now. GM's board should have done this four years ago. GM's shareholders should have done it 2 years ago. GM's dealers should have been jumping up and down over this one year ago. But none of these supposed stakeholders lifted a finger.

I like to think I'm a hip free market kind of person, but the last few months have been positively embarassing. The behavior of the so-called capitalists at the banks, AIG, the Wall Street investment houses, and now the auto companies does not give one any hope that these firms can be turned around. They demand their profits and perquisites in good times, but when the economic tide inevitably turns (and it always does. Do they still teach this at B-School?) they came running to the government for help. It's almost like it was part of their business plan. It should have been a pre-condition for all of these guys that the boards and officers all resign before acceptin any bailout money. Instead, they have been clinging to their planes, golf tournaments, and bonuses. Talk about moral hazard.

Is Caterpiller doing this? No, it's gritting its teeth and laying people off. Is Harley-Davidson doing this? No, they are running defiant "red, white, and blue" ads. Is Ford doing this? No, they brought in a new CEO who took names, looked for inefficiencies, and rationalized the product line. God forbid Waggoner do this 4 years ago when GM was already buckling under the pressures of its legacy costs, union rules, and dealer networks.

I still think that there will be a GM in five years with a reduced product line, smaller work force, and deservedly smaller set of dealers. You can talk about the free market all you want, but the Bailed Out haven't been participants in one for a long time. Now, we have the distasteful spectable of the president demanding the resignation of a corporate cheiftain. and offering guarantees for every GM warranty. Hopefully, the gov't will get out of this as quickly as it got in, but if it doesn't Obama will not be the only one to share the blame. The big league capitalists have failed spectacularly, and the political reality is that they cannot try to save their seats in the Executive Washroom with a bankruptcy. Rather than cry for the Death of the Free Market, let's make sure this "public-private" partnership is as short and forgettable as a Las Vegas wedding.