What is the Policy?

Yesterday President Obama fired GM CEO Rick Wagoner. Rick, who has lead GM since 2000, will receive a $23 million severance package. This for running a company that has lost $82 billion in the last decade, and is now on government life support just to stay afloat.

So I get it, Rick did a terrible job, or was unlucky enough to be at the helm during a terrible time, or both. He should go. And I wouldn't pay him $23 million just for finding the exit. But should the White House be the ones to tell him he has to leave?

What about the bank CEOs? What about the Wall Street CEOs? What about Chrysler and Ford? What is the policy that allows us to know when Washington can step in and change the management of a company?

I ask these questions because I am severely bothered by the idea of Washington running businesses. They can't balance their own budget, the SEC can barely read financial statements, and many of them were born with silver spoons in their mouths. So what makes us think they can fun businesses?

Firing management is the responsibility of the Board of Directors, which are elected by shareholders. The process is tried and true. If GM shareholders couldn't bring enough pressure to bear on Wagoner, then what decision making process did the White House use when it decided to step in and fire him? It's a HUGE question. We need to know, as shareholders, when the government has the right to step in and change key management positions in a company.

I don't like Wagoner, or GM. But the White House was out of line. And such a move will not restore confidence from the business community, who seem to have more reason to fear the White House every day.