Originally Posted By: olivant
Originally Posted By: Lilo
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.


Hi Olivant:
I think that the difference between "firing" and "asking someone to resign" is pretty small in most cases and in this instance I don't see a difference.

The Federal government does not have ownership of GM or Chrysler. It does have ownership of AIG and significant equity interest in Citigroup. It also has a host of regulatory and legal mechanisms by which to force banks or bank holding companies to modify behavior. So far it has not seen fit to exercise the same power on the financial sector that it is bringing to bear on GM, although in my opinion the financial sector is both more at fault and more dangerous to everyone's economic future.

"When the snows fall and the white winds blow, the lone wolf dies but the pack survives."
Winter is Coming

Now this is the Law of the Jungle—as old and as true as the sky; And the wolf that shall keep it may prosper, but the wolf that shall break it must die.
As the creeper that girdles the tree-trunk, the Law runneth forward and back; For the strength of the Pack is the Wolf, and the strength of the Wolf is the Pack.