Monday, March 30, 2009

Oh my, Obama

Obama has demanded that the head of GM resign. The New York Times doesn't like it, but misses the main point: it is unheard of that a President have the power to dismiss the head of a private corporation. This is rank statism. Under Obama, the federal government is trying to take over as much of the private realm as possible. This should outrage and frighten all principled Americans.


Anonymous said...

RC Sproul's article is on spot, as was Schaeffer on these matters. I was just talking with Jim Means yesterday about "The Great Evangelical Disaster," by Schaeffer and how incredibly perceptive he was not only about our nation, but about the church as well. Sadly, Schaeffer's thoughts are still dismissed out of hand by the church. Schaeffer was a prophet without honor and in most circles is yet to be listened to.

Jon said...

Thank you, Dr. G. I thought the exact same thing when I heard the news. I'm glad I'm not the only one who sees this.

Anonymous said...

Wait just a minute. Obama can say what he wants to, last time I checked. I could demand that the head of GM resign, as could you.

Obama is trying to help the American economy and the head at GM stands in the way in Obama's mind. Obama is putting some pressure on him to resign. That's how politics work. If GM wants the bailout money they have their choices. He can resign, or GM can fire him, or he can bow to Obama's demands. What do think will happen?

But I'm not concerned about this demand of Obama's at all, although I too am concerned about statism.

Sarah Geis said...

Don't worry comrade, the reeducation squad will be with you shortly.

In all seriousness, what will it take for us to learn when we as a nation ignore the lessons of history?

Brian said...

I don't quite understand why you think that Obama (1) has the power to dismiss the head of a private corporation, and (2) demanded that the head of GM resign. From what I have read, it seems that both of those claims are false, or at best misleading.

Obama has demanded that the head of GM resign if GM wishes to receive taxpayer-funded bailout funds. He does not have the power to dismiss the head of a private corporation, but only to enforce the following conditional: if GM wants public funds for a bailout, then it must dismiss its CEO. Surely the power to demand that certain conditions be met if public funds are to be given is nothing like the categorical power to demand that those conditions simply be met, as you suggest.

After all, GM retains its freedom to reject the dismissal of its CEO by rejecting corporate welfare, no? This may not be something GM wants to do, but then that's their decision - they get to decide which outcome they prefer. And if the federal government is the one offering billions of dollars in aid, it seems at least somewhat reasonable that such assistance be given with conditions.

Indeed, giving such assistance without any conditions strikes me as deeply irresponsible. (Banks routinely give people money on the condition that they use it only for a certain purpose, repay the money on a certain schedule, with a certain amount of interest, etc., etc.)

Of course, this does not mean that the conditions Obama has laid down are optimal, good, or even reasonable. (And that seems to be the source of the NYT objections.) But unless I'm missing something (which is possible), the situation is not at all one that is accurately or fairly described as a case of a President having "the power to dismiss the head of a private corporation." Could you help me understand why you thought the categorical, rather than conditional, claim is defensible?

Peter Malik said...

wait a second.. why not call things by their proper name? This to me is a sign of a dictator. no need to say more. horrible horrible horrible.

Lisa said...


In response to the definition of statism, I am sharing my post to a friend’s bible study from back in January this year. I wrote the following:

"I noticed while watching the news tonight an add for a new DVD that
seemed to be a canonizing piece depicting the rise of our new President as if he were a 'savior' for the United States. Wow, only Jesus is the savior. When you go to 1 Samuel 8:7-8 were God says '...But they have rejected Me from being king over them....they have forsaken Me and served other gods...' It is taking what should be our single focus on our Lord as our provider and looking for other worldly sources to supply our needs. We start 'leaning on our own understanding'...It may
seem like it's a good idea but it will only lead us farther and farther away from God. Proverbs 14:12 says 'There is a way which seems right to a man, but its end is the way of death.' We all need to remember to choose life!"

Is anyone in the Body of Christ willing to plead on behalf of the United States, to intercede to prevent God from doing to this nation what He did to the nation of Israel when they put other gods before Him? Within the Body of Christ who faithfully serve the Lord; Isaiah 65:13-14 is clear how God will take care of those who serve Him…Behold, My servants shall eat, but you shall be hungry. Behold, My servants shall drink, but you shall be thirsty. Behold , My servants shall shout joyfully with a glad heart, but you shall cry out with a heavy heart, and you shall wail with a broken spirit.

The prophet is standing at the public gate crying out…is anyone listening?

Jon said...

I was thinking about this, and for what it's worth, the reason I think Obama has the power in this instance is due to the nature of the choice. GM could have either received a $6,000,000,000 life-line in federal aid--an amount of money that is unfathomable to most--or they could have retained their CEO. From a corporate perspective, there is no choice here: Either the CEO goes, or the company potentially folds (i.e., everyone goes). No company (or good CEO) would keep one person on the payroll to the detriment of the whole like that.

This is akin to paying taxes, in my mind. I have the following choice: I can either pay my taxes or go to jail. I technically have a choice, but it is such a lopsided one that in effect the gov't has the power to exact taxes from me.

In the case of taxes, it's warranted--the gov't is given the responsibility to collect taxes. I don't recall the Constitution giving the gov't the right to intervene in private corporations and make management decisions, however.

Marcus McElhaney said...

When the government bails out a "private" company, is that company still "private"? I don't think so. The argument has been applied more to banks but if GM wants government money than it's beholden to the government. Can't have it both ways. However, the question if that government is looking out for the best interest of the people it serves is a different thing.

Tim said...

When is the last time that a sitting President asked for, and received, the resignation of a CEO of a private corporation? Has this ever happened before?

Sure, the entanglement of government with erstwhile private enterprise is a function of the bailout money. That makes it more scary, not less.

Doug Groothuis said...


Thank you. These are my sentiments exactly and distilled perfectly.

Brian said...

How many times has the government given billions of dollars of taxpayers' money to a private corporation as some kind of bailout? I don't know, but I'd guess that it isn't a large number. Of these previous bailouts, how many have come with conditions - demands about what a corporation must do (or not do) in order to qualify for public funds? I don't know, but I'd guess (I'd certainly HOPE) that the number is quite large, e.g. nearly all of the bailouts.

Do you (Prof. Groothuis and others) think that all previous bailouts that came with government-mandated conditions on when a private corporation could qualify to receive public funds on the order of billions of dollars were an alarming "entanglement" of government with private enterprise that amounts to - or signals a significant step in the direction of - a "dictatorship" or "statism" or "communism," as several comments here suggest?

Perhaps so: and if so, then fair enough, I suppose. (I imagine, then, that this blog repeatedly echoed these dire warnings about Bush having "gone statist" and "taking over the private realm" several months ago during his administration's condition-laden bailouts.)

But if there isn't a general concern about governments "entangling" themselves e.g. in the form of bailouts, with private enterprise under dire and unusual economic circumstances, then why the alarmist pronouncements about this particular one? Is it just the fact that this time, one of the conditions is that a CEO step down? Are other conditions (such as the conditions the Bush administration laid down, e.g. massive corporate restructuring) considered just fine - but once there's talk of a CEO stepping down, then we've got dictatorship around the corner?

Again, I don't understand (1) why Prof. Groothuis characterizes what Obama has done as evidence of him having the "power to dismiss the head of a private corporation" - is there any actual evidence of this?, and (2) why this particular set of conditions on giving a corporation billions of dollars in bailout money (as opposed to other sets of conditions) is indicative of "statism" in a way that other conditional bailouts have not been. I agree that if Obama had (and used) the power to unilaterally dismiss a private corporation's CEO - as Groothuis suggests he did - there would be great cause for concern and alarm. But since the antecedent is false, I'm left puzzled about the motivation for believing the consequent. Does it just boil down to the first option I mentioned: a principled aversion to any kind of bailout?

Brian said...

Jon - sorry, I didn't see your (helpful and interesting) comment before I posted again.

I agree that we could look at this matter as a case of unjustified coercion. But if we do, then it seems that if any corporation faces the prospect of going bankrupt, then if the government offers a bailout containing absolutely any conditions, it will turn out that the corporation is "coerced" to accept those conditions, even if those conditions strike us as perfectly reasonable (e.g. "you may not use these billions of dollars to stuff your faces full of caviar.") But is that kind of coercion really unjustified (assuming, as we are, that a bailout is being offered at all)? Seems not at all.

If you're right that the problem in this case stems from the fact that the Constitution doesn't give the government the right to "make management decisions" for private corporations, then either (a) the government should never offer any bailouts, or (b) the government should never offer any bailouts that have conditions whose satisfaction would require (or make it difficult to avoid) changes in management.

It seems to me that one could be a principled proponent of a highly unrestricted free market economics and therefore endorse (a). But then one's objection shouldn't stem from anything concerning CEO's, but from the general objection to bailouts of any kind.

I don't see the rationale, however, for endorsing (b). If one permits governments sometimes to give bailouts (under exigent circumstances, say), it strikes me as highly irresponsible and unreasonable to require the government to give these bailouts without strings attached - or at least without any strings that may have consequences for "management." Indeed, corporations that need bailouts are more likely to suffer from management problems anyway, no?

Seems to me it is more consistent either to reject the propriety of bailouts altogether, or to accept that conditional bailouts can be justified, even if they are in some sense coercive, and even if the conditions they stipulate have consequences for "internal workings" of corporations.

Tim said...

Jon and Brian,

The alternative was for GM to declare chapter 11, which would terminate all union contracts -- a major part of the financial woes of the big auto makers in Detroit. Then they could restructure with sanity.

Which would, IMHO, make a lot more sense than silently allowing themselves to be nationalized.