Hi DT:
The issues with the Administration's latest moves are
1) By what right does the federal government take it upon itself to fire the head of a private company? There's no statute that allows the President to do that. His aides were talking about remaking the board of GM. Again, even if Obama's team were competent enough to do that, what gives them the right? Who else is eligible to be fired by the President?
What gives the President the right to dictate mergers?
Lilo, surely you know the President did not fire the head of any private company. By virtue of the loans the federal government made to GM, the federal government is a GM creditor and lienholder. Given its position as such, the federal government has significant influence on GM. Any company or person who extends a significant amount of credit to a company can exercise such influence if its stake is large enough. The President exercised that influence by encouraging the GM head to step down.
