GM’s Wagoner forced out
When things go sour, it is not uncommon for politicians (or anyone, for that matter) to demand a head. Actual culpability is not the issue - people want to feel like someone is paying for the consequences they are feeling.
If there is one positive to the Bernie Madoff scandal, it’s that it has a feeling of closure. We all know who is to blame, and he is now behind bars. People lost billions, but they can squarely place the blame on Bernie. There is something redemptive about that.
But look at GM. Here is a company that has largely been on the wrong side of history - yet I’d be hard pressed to say this is due to the actions of any single person. As a precondition to further bailiout financing, the White House has decided that CEO Rick Wagoner must step down:
The decision to ask G.M.’s chairman and chief executive, Rick Wagoner, to resign caught Detroit and Washington by surprise, and it underscored the Obama administration’s determination to keep a tight rein on the companies it is bailing out…
G.M., on the other hand, has made considerable progress in developing new energy-efficient cars and could survive if it can cut costs sharply, the task force reported. The administration is giving G.M. 60 days to present a cost-cutting plan and will provide taxpayer assistance to keep it afloat during that time.
Undoubtedly GM has received a huge chunk of taxpayer money. And to demand a head does not at first blush seem unreasonable. But what about Bank of America, which has received billions in taxpayer funding, and is still happily captained by Ken Lewis? Or how about the other banks receiving TARP funds such as Citi, JPMorgan, Wells Fargo and so on?
We absolutely need more accountability if we are to continue to bailout every struggling company. Yet this move gives the appearance of a double standard between main street and wall street, even if that perception is not justified by the facts.
