Inhabited Chair: The Bailout Gets Personal
Earlier this week, President Obama’s administration forced Rick Wagoner out of his position as Chairman and CEO of General Motors. Mr. Wagoner has presided over GM during some of the worst times in company history. Therefore, it comes as no surprise that the poor performance of the company cost him his job. The timing of this move, however, is curious. It comes shortly after the administration announced that GM needed to come up with a new business plan for cutting costs and staying afloat within 60 days or they would not receive any more money from the Federal Government. That is a difficult task in itself, but now GM must attempt to manage that with new leadership. I want to be clear that even though I have said this will not be easy for GM, I do not necessarily think that President Obama was wrong. This may well turn out to be the best thing to do. I honestly don’t know.
The story of Rick Wagoner is probably not news to anyone. What I really want to talk about is how the role of government in business is changing. If things were up to me, the government’s only role in business would be to enforce contracts and protect private property. This stems from my experience with economics and the fundamental belief that people make rational decisions. I prefer the market to be gently guided by what Adam Smith called the “Invisible Hand.” Instead, the market is being shoved by the all too visible hand of President Obama and his administration. He comes from the school of thought that the government’s role is to help moderate the economy. This stems from the Aggregate Demand theory put forth by John Maynard Keynes shortly after the Great Depression began. Now that we find ourselves in dire straights once again , it comes as no surprise that we look to Keynes for a solution. Even though I don’t necessarily agree with it, under the circumstances it may be what’s best. This belief is predicated on the idea that an increase in government spending or a decrease in taxes will stimulate the economy. Conversely, a decrease in government spending or an increase in taxes will stagnate the economy. The role of the government is to counter-act the natural forces of the market to make sure we don’t climb too high or dip too low. The question of “will the market moderate itself in the long run or do we need the government to moderate the economy?” has long been asked. What happens to GM will help us to answer that question.
Shoe Thoughts: This week, in honor of GM, I am going to highlight driving shoes.
The Piloti DTM is THE driving shoe. They allow your heel to roll smoothly on the floor of the car as you push the pedals. The strategic padding that differs from the prototypical shoes allows you to drive in comfort while really feeling the pedals. The Puma Wheelspin is a fashion shoe inspired by racing tradition. It features a quilted upper material to remind you of Formula 1 driver’s suits. For a classy refined look, try out the David Spencer Bit Driver. They combine the ultimate in comfort and style for a great look and great performance.
Non-Shoe Thoughts:
- LOST thoughts:
- I know this is nothing new but Hurley really is the voice of the people, his talk with Miles was exactly what was on everyone’s mind
- So now we know why Ben doesn’t remember any of the 815 survivors, Richard takes him and heals him in some way that erases his memory and makes him part native. Richard takes Ben to the temple which I believe is where the smoke monster resides which has been an agent of judgment before. Mr. Echo was judged not worthy and now according to the previews for next week, 30 years after being saved by the natives, its Ben’s turn to be judged. We do know that at some point things go badly between Ben and his father Roger despite Roger’s apparent concern for his son. My guess is it has something to do with Annie.
- We learned why Kate went back to the island and what she did with Aaron, which was mildly interesting.
- No matter how many times he tries, Ben just cannot kill Locke, well at least not permanently.
- The Office Thoughts: Due to the series finale of ER, there was no new office this week.
And now I would like to say a few words about myself and my posts. My name is Zachary Wolfson, I’m a student at Northeastern doing my internship at Shoebuy.com. I will be writing weekly blog entries, which I modeled after “Monday Morning Quarterback” by Peter King who is a great sports writer and always gives some love to my Philadelphia Eagles. Every week, there will be a main story where I discuss something that is happening in the world at that time, my shoe thoughts of the week, where I share my thoughts on a couple of styles and my non-shoe thoughts of the week where I just share random thoughts for your enjoyment.
Thanks for reading. I always enjoy hearing from my readers so leave lots of comments on anything I’ve said. Please subscribe to the Shoebuyblog.com RSS feed and tell all your friends.
April 4th, 2009 at 8:43 am
GM is being treated differently than other companies so I’m not sure GM is the litmus test you make it on Keysian economics. Other Obama policies will likely have larger impacts such as the 785 billion dollar (so called) stimulus bill.
I’ve always heard of driving shoes but never really knew what they were – now I know….thanks