Will President Obama succeed in firing his second CEO? Having ousted Rick Wagoner from the top job at General Motors two years ago last month, the chief executive has now set his sights on the obscure, 80-year-old head of drugmaker Forest Laboratories. Obama fired Wagoner even before the decision was made (without a vote of Congress) for the U.S. government to take majority ownership of GM. Not to say that Wagoner deserved to stay, but was it ever Obama’s choice to make? And if so, how many CEOs will he have to fire before we start calling our nation’s chief executive the chief executioner instead?
The situation at Forest Labs, as reported Tuesday by the Wall Street Journal, is more complicated. The company recently settled charges of illegal marketing practices with the Justice Department, paying fines and a civil settlement worth a combined $313 million.
Howard Solomon, the company’s president and CEO of 34 years, was not accused of wrongdoing in the case, nor did the settlement agreement include a change of management as one of its terms.
But when the Obama administration settles with you, its terms are not necessarily final. The Department of Health and Human Services has since come to the table invoking a seldom-used power. It will cut off the company’s business with Medicare and Medicaid unless Solomon steps down.
Obama’s ambition to have his way with business, and his willingness to flex government muscles in ways rarely seen, includes but does not end with tinkering in the area of management. It also includes decisions about where and how companies will operate, and with what kind of workers.
Last week, Obama’s National Labor Relations Board initiated a dispute with Boeing Corp. over its decision to expand its airplane manufacturing operation at a location in South Carolina, a right-to-work state.
The NLRB, which is dominated by Obama appointees, is interfering because it wants to make the company add as much work as possible to its existing unionized facilities in Washington state. This is a shot across the bow not only of Boeing, but of all firms heading South in an effort to control costs. And it comes under the influence of a labor union lobby that is all-powerful in the current White House.
Government is using whatever leverage it can muster to insinuate itself into an ever-expanding number of business decisions. In many cases, one government overreach becomes an argument for another.
The taxpayers’ stake in the congressionally unauthorized bailout of the automakers became grounds for government control of many business decisions, including the mistreatment of Chrysler Corp.’s secured creditors and even whether GM headquarters would be allowed to remain in its current Detroit building.
The taxpayers’ hegemony over the buyers’ market for pharmaceuticals, soon to grow thanks to an Obamacare law that may not survive constitutional scrutiny, now justifies greater government involvement in the drugmakers’ management.
And then there is the stimulus package, much of whose $800 billion price tag was intended to move industry and investment in directions (“clean energy,” union construction labor) that are dictated not by market demand, but by Obama’s ideological vision of what the “jobs of the 21st century” ought to be.
A properly limited government is a force for good. It arbitrates disputes, punishes wrongdoers, and facilitates the day-to-day economic activities of its citizens. But the Obama administration seems to view American economic activity as something regrettably necessary and subordinate to government priorities.
Jared Bernstein, Vice President Biden’s soon-to-depart economic adviser, probably put it best: “You don’t want to kill the golden goose,” he said, “but you don’t want it to crap all over you either.”
If Obama shares this excremental vision of the commercial activity that supplies Americans with their livelihood, that explains why he thinks so many businesses need his cleansing intervention.
David Freddoso is The Examiner’s online opinion editor. He can be reached at [email protected].
