The federal government took a policy turn this week that should concern every American.
By forcing out General Motors Chief Executive Richard Wagoner, the federal government has signaled to business owners and the American people a willingness to seize the reins of private companies that aren’t meeting its expectations. The unprecedented power grab establishes an unsettling precedent that should be met with skepticism among the American public, and I urge the president and other federal officials to tread lightly as they consider tightening government control over private companies. Federal dictates can be blunt instruments that often run the risk of creating careful-what-you-wish-for scenarios.
The message coming from federal officials is that they must push GM toward restructuring to make sure the billions of taxpayer dollars loaned to the beleaguered auto manufacturer aren’t wasted. It goes without saying that I applaud any responsible efforts to ensure that the American people get results for their tax dollars. But the principles of individual liberty and limited government form the bedrock upon which we’ve built our democracy, and we can’t allow any economic crisis – no matter how severe – to override those fundamental ideals. We can’t allow government to intrude too deeply into the affairs of private citizens and private companies.
I’m not defending the leadership or the business practices that brought some of these companies and financial institutions to their knees. Those executives deserve to face the music, but the boards and stockholders of those companies – not the government – are best equipped to handle that task. The federal government’s mandate to oust GM’s chief came to light the same week that a disturbingly overbroad proposal was approved by the House Financial Services Committee that would impose government controls on compensation for all workers at companies that have received federal capital. This legislation would allow the federal government to dictate the salaries of custodians, cashiers, secretaries and receptionists along with senior-level employees at these private companies. We’re seeing a pattern emerge of a far overreaching federal government
If the goal truly is to protect the taxpayers, then it was a mistake to ever allow the automakers and Wall Street access to the taxpayers’ checkbook in the first place. I voted against the Wall Street bailout last fall and the stimulus bill in February because they lacked any mechanism to cut off federal support if they didn’t get results, and I opposed federal support of the Big Three automakers for the same reason. The outrage over the executive bonuses at AIG a few weeks ago bears out my contention that these risky bailouts can only result in waste. Now we’re finding that these bailouts also have created the potential for the federal government to overstep its authority in the private sector.
We must remain vigilant as the president and other federal policymakers seek expanded power over private companies. The decision to fire the head of GM opens up the possibility that federal officials may seek such authority over any number of other private companies and institutions, leaving the American people to wonder where the federal government will draw the line when determining how far to reach into the workings of private industry. As I continue to monitor this troubling development, I’m reminded of the words of President Ford, who in 1974 cautioned that, “A government big enough to give you everything you want is a government big enough to take from you everything you have.”
Written by Iowa Congressman Tom Latham
blog comments powered by Disqus