LA Times, Dobbs uncritically forward McCain's false claim that Wagoner's departure was "unprecedented"
SUMMARY: The L.A. Times and Lou Dobbs uncritically repeated Sen. John McCain's false claim that the government's decision to ask for Rick Wagoner's resignation is "unprecedented." In fact, similar actions occurred at AIG, Fannie Mae, and Freddie Mac in September 2008.
In a March 31 article, the Los Angeles Times uncritically quoted Sen. John McCain saying of Rick Wagoner's resignation as General Motors CEO: "This is a remarkable move by the federal government -- I think unprecedented in the history of this country. ... What does this signal send to other corporations and financial institutions about whether the federal government will fire them as well?" Similarly, on the March 30 edition of CNN's Lou Dobbs Tonight, host Lou Dobbs stated that "[s]everal leading Republicans immediately criticized the president's plan and blasted his decision to fire GM's CEO Rick Wagoner. Senator John McCain said Wagoner's dismissal is a remarkable and unprecedented act." In fact, the government did not fire Wagoner as Dobbs claimed. Rather, the government told GM that Wagoner had to step down as a condition of GM receiving further government aid. Moreover, contrary to the characterization of the government's action as "unprecedented," similar actions occurred at AIG and at Fannie Mae and Freddie Mac, where chief executives were removed in September 2008 as part of agreements to accept government aid.
As Media Matters for America has noted, in announcing his resignation, Wagoner stated, "On Friday I was in Washington for a meeting with Administration officials. In the course of that meeting, they requested that I 'step aside' as CEO of GM, and so I have." Indeed, The New York Times reported on March 30, "The White House on Sunday pushed out the chairman of General motors and instructed Chrysler to form a partnership with the Italian automaker Fiat within 30 days as conditions for receiving another much-needed round of government aid" [emphasis added].
Moreover, contrary to McCain's claim that the decision to ask for Wagoner's resignation as a condition for further government aid was "unprecedented," since September, several executives have been asked to resign as a condition for receiving government aid:
- In a September 7, 2008, jointly released statement, then-Treasury Secretary Henry Paulson and then-Federal Housing Finance Agency director Jim Lockhart announced that as part of the government's decision to take Fannie and Freddie into conservatorship, "New CEOs supported by new non-executive Chairmen have taken over management of the enterprises."
- A September 17, 2008, Washington Post article reported of the Bush administration's decision to bail out AIG, "The terms of the rescue package allow the government to replace [chief executive Robert] Willumstad, and a source familiar with the matter said last night that Willumstad would be succeded [sic] by Edward Liddy, former chief executive of Allstate." On September 17, 2008, the Associated Press likewise reported Willumstad's removal as a part of the bailout deal.
From the March 30 edition of CNN's Lou Dobbs Tonight:
DOBBS: Chrysler reacting quickly to the president's demand for action on forming an alliance with Fiat. Chrysler today said it has reached agreement on what it called a framework for a partnership with Fiat. No details were given, however.
President Obama gave Chrysler 30 days to complete work on such an alliance with Fiat or face losing as much as $6 billion in additional money from the federal government.
Several leading Republicans immediately criticized the president's plan and blasted his decision to fire GM's CEO Rick Wagoner. Senator John McCain said Wagoner's dismissal is a remarkable and unprecedented act.
Another leading Republican, Senator Bob Corker [TN], said, quote, "Firing Rick Wagoner is a side show to distract us from the fact that the administration has no progress to announce today." Senator Corker added, "With sweeping new power, the White House will be deciding which plants will survive and which won't, so, in essence, this administration has decided they know better than our courts and our free-market process how to deal with these companies."
From the Los Angeles Times article by reporter Jim Puzzanghera:
In a message to GM employees Monday, Wagoner said he agreed to the administration's request Friday to step aside and called his replacement as CEO, longtime GM executive Fritz Henderson, "an excellent choice."
"GM is a great company with a storied history. Ignore the doubters, because I know it is also a company with a great future," Wagoner told them.
Obama said the decision was "not meant as a condemnation" of Wagoner, but was done because the company needs a "new vision and new direction."
Some Republicans, however, were alarmed at the decision to oust the head of a private company, even one that has received government bailout money. GM and its financing arm have received a total of about $19.3 billion. Chrysler and its financing arm have received about $5.5 billion.
"This is a remarkable move by the federal government -- I think unprecedented in the history of this country," said Sen. John McCain (R-Ariz.). "What does this signal send to other corporations and financial institutions about whether the federal government will fire them as well?"
Love it-- can we get this in poster size?
Maybe. You could make it a t-shirt if we still had Velva-Sheen stores.
These are the same guys on the right who wanted all of these guys fired when they came begging for money on a private jet right?
Look, these companies made a deal with the devil so to speak. They asked for taxpayer money to stay afloat. They opened the doors to government intervention into their daily workings. That's the way it is. If you don't want to give the government this kind of power over your company then don't ask them for billions of dollars.
This is a prime example of how conservatives are willing to abandon their core ideology in matters such as this just so they can be on the opposite side of the President. My guess is that if Obama came out and talked about his unwillingness to do this, these same guys would be saying that he should fire these CEO's. It's a no win for Obama when it comes to these people. The good thing about that is "these people" in this instance are a clear minority.
"it is proper to sup with the devil as long as you use a long spoon"
name the man who said that!
Fred Thompson?
These are the same guys on the right who wanted all of these guys fired when they came begging for money on a private jet right?
Exactly. First they say they want these businesses to fail, then ten seconds later they get outraged at the idea of firing the bosses.
It's called schizophrenia.
funny thing is that this whole takeover and remove the management thing that is happening........while it has been happening recently....the idea is kinda old.
prime example when WWII broke out for the US FDR threatened to take over Ford Motor Co. from Henry Ford unless Ford agreed to end his labor disputes. FDR threated nationalization and removing Ford forever. Ford quickly changed his tune.
Oh my! That photo is too funny
"The Mexicans are coming, the Mexicans are coming..." Lou Dobbs rewrites the saying.
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The LA Times [writer] should be ashamed. Is it any wonder people are ditching newspapers all over the country? Research would be an excellent department for them to "beef up"
Ah, MM. Once again you convolute a simple distinction for political opportunism by mixing the bananas with the grapes.
Fannie & Freddie are GSEs - gub'mint sponsored entities. In effect, nationalized loan companies directly answerable to congress and the impotent regulators allowed by congress. Freddie and Fannie are not private corporations.
AIG is a private corp. directly answerable to its board and the share holders. The biggest mistake AIG did was insuring the gub'mint mandated toxic assests of Freddie & Fannie.
Freddie, Fannie, & AIG bailouts were all under the perview of the FEDERAL RESERVE; not congress; not the white house. The FEDERAL RESERVE is a private entity distinct from the rest of the gub'mint. The FED made the negotiations and terms with Freddie, Fannie, & AIG.
GM also recieved a bailout, but not from the FED. Congress authorized that money at the president's insistence. The president also insisted that GM's CEO Wagoner resign as a condition of further gub'mint help. THAT IS UNPRECEDENTED - a president taking direct authority over the administration of a private company.
Class dismissed. You're welcome.
Do you just reply with out knowing any facts?
"Fannie & Freddie are GSEs - gub'mint sponsored entities. In effect, nationalized loan companies directly answerable to congress and the impotent regulators allowed by congress. Freddie and Fannie are not private corporations" Fannie & Freddie are publicy traded corporations that were implicitly backed by the gov. Aig is a publicly traded company that is answerable to its board in the same way that Fannie & Freddie are.
The Federal reserve is a part of the US Gov. They are not a private entity. It is splitting hairs to distinguish between one part of the Gov. versuses another, it is all tax payer money. They all say that the gov has the right to dictate terms if they receive tax payer money.
BTW the Presiodent did not take direct authority over a company. He simply stated that if you take any more money you need to step down.
Do you expect the President to give them money and not put any demands on them? Do you feel that Wagoner has done an effective job? What is your point? I get the idea that no matter what Obama did, he would have been critisized. You all can't have it both ways, blame Obama and his administration for the AIG bonuses and say that he has no right to step in and ask the CEO to step aside.
The borrower is always subservient to the lender. That is not in dispute as you wrongly rant.
I stand by my post, the de facto implications, and its point:
The FED made the negotiations and terms with Freddie, Fannie, & AIG.
vs
Congress authorized (GM's bailout) money at the president's insistence. The president also insisted that GM's CEO Wagoner resign as a condition of further gub'mint help. THAT IS UNPRECEDENTED.
And a distinction with a HUGE difference. Unless you're a proponent of gargantuan monolithic federal government, and unable to distinguish between the various branches and entities of government. Then, I can understand your confusion.