Yesterday we made the case that Obama supporters are to blame for inflicting Obama on the nation. He’s all yours Obama Dimocratic Party, along with the looting of the American economy and the looting for bankers and GM. He’s all yours.
Today, we note that from now on without doubt Obama is personally accountable for all GM job losses and all GM plant closings.
Yesterday’s stinking B.O. deal gives the U.S. government more than 60% of controlling votes in General Motors. All decisions, all job losses, all dealership closings, all plant closings, all failed product lines, all thievery, all bonus payments, all corruption, all embezzlement, any and all mishaps, must be blamed on the owner who is now effectively Barack Obama. It’s called accountability.
The GM Board of Directors, the entire management can be replaced by Barack Obama at will because the U.S. government has an overwhelming controlling interest in GM. In the past, Obama thugged Rick Wagoner, the CEO of GM, into resignation. Now there is no need for talk. With the controlling votes at GM the ukase can now be a direct order equivalent to Vito Corleone “pushing a button” to get a Mafia “soldier” to “exterminate” an unwanted associate.
So from now on every job lost at GM is a direct result of Obama’s action or inaction.
Therein lies the danger to capitalism any student of the defunct Union of Soviet Socialist Republics, what is now Russia, will immediately recognize.
In the Soviet Union factory managers, there were no private owners, produced crap – unwanted items and outdated products with little variation because they were not accountable to the marketplace or what consumers desired. The factory managers only had to satisfy the bureaucrats and produce politically acceptable products. Therefore Soviet consumers had miles of Lenin busts and Lenin books and Lenin films, to purchase. But writers Soviet consumers actually wanted to read or products they actually wanted to purchase were unavailable. When the products were available they were in extremely limited quantities and in limited drab colors.
The Soviet consumers were victims to the reality that the factory managers no longer had to care what the Soviet consumer wanted but rather what the government bosses wanted – which was usually politically safe and ideologically pure – crap.
Wendy’s, the fast food franchise mocked the Soviet consumers’ plight in an infamous commercial which foreshadows the new Obama GM.
An argument can be made that the old GM did not produce products consumers wanted either so the Soviet comparisons fail. But, the old GM was dependent on the marketplace and on the dollars of the consumer. No longer. Obama enabler and former cheerleader David Brooks, is waking up and partially getting the meaning of the new Obama GM:
First, the Obama plan will reduce the influence of commercial outsiders. The best place for fresh thinking could come from outside private investors. But the Obama plan rides roughshod over the current private investors and so discourages future investors. G.M. is now a pariah on Wall Street. Say farewell to a potentially powerful source of external commercial pressure.
The corporate factory managers at the new Obama GM will not be accountable to “external commercial pressure” because the only person they have to please is B.O.
Second, the Obama plan entrenches the ancien régime. The old C.E.O. is gone, but he’s been replaced by a veteran insider and similar executive coterie. Meanwhile, the U.A.W. has been given a bigger leadership role. This is the union that fought for job banks, where employees get paid for doing nothing. This is the organization that championed retirement with full benefits at around age 50. This is not an organization that represents fundamental cultural change.
The “creative destruction” theory of Joseph Schumpeter we have written about previously will no longer operate. Instead, the rot will continue and American taxpayers will pay for products produced they do not want to purchase because now it is the new Obama GM which will only produce B.O. stink.
Third, the Obama approach reduces the fear that impels change. The U.S. government will own most of G.M. It would be politically suicidal for the Democrats, or whoever is in power, to pull the plug on the company — now or ever. Therefore, the current managers can rest assured that they never need to fear liquidation again. There will always be federal subsidies for their own mediocrity.
Our point exactly. Welcome to the Soviet. PINO Big Blogs and Big Media will deride our “welcome to the Soviet” comment as some sort of outdated fearmongering and “pinko” red-baiting from days gone by. But our point stands, the Soviet factory managers are now in charge at the new Obama GM and as Obama enabler Brooks notes, there will always be federal money for mediocrity so that the factory managers need not fear the marketplace, just the government bureaucrats.
Fourth, the Obama plan dilutes the company’s focus. Instead of thinking obsessively about profitability and quality, G.M. will also have to meet the administration’s environmental goals. There is no evidence G.M. is good at building the sort of small cars the administration demands. There is no evidence that there is a large American market for these cars. But G.M. now has to serve two masters, the market and the administration’s policy goals.
Brooks proves once again he is a dunce. No, the new Obama GM will not serve two masters. The new Obama GM will serve one master – government bureaucrats who will demand politically safe and acceptable products which consumers will not want. Again, welcome to the Soviet.
Fifth, G.M.’s executives and unions now have an incentive to see Washington as a prime revenue center. Already, the union has successfully lobbied to move production centers back from overseas. Already, the company has successfully sought to restrict the import of cars that might compete with G.M. brands. In the years ahead, G.M.’s management will have a strong incentive to spend time in Washington, urging the company’s owner, the federal government, to issue laws to help it against Ford and Honda.
Brooks the dunce strikes again. The new Obama GM does not have to worry about Ford or Honda or rivals or consumers. The new Obama GM only has to worry about sugar daddy – the drab government bureaucrats from the Obama Soviet.
Sixth, the new plan will create an ever-thickening set of relationships between G.M.’s new owners — in government, management and unions. These thickening bonds between public and private bureaucrats will fundamentally alter the corporate culture, and not for the better. Members of Congress are also getting more involved in the company they own, and will have their own quaint impact.
The end result is that G.M. will not become more like successful car companies. It will become less like them. The federal merger will not accelerate the company’s viability. It will impede it. We’ve seen this before, albeit in different context: An overconfident government throws itself into a dysfunctional culture it doesn’t really understand. The result is quagmire. The costs escalate. There is no exit strategy.
Brooks the dunce strikes again. Brooks fails to understand the full horror of what has occurred. It is not GM that has changed – it is the U.S. Government that has changed. There is no GM quagmire. The quagmire is the U.S. Government has willingly become the new Soviet.
For the catastrophes to come, including all job losses, at the new Obama GM – blame Barack Obama.
For the new Soviet regime – blame Barack Obama.