For anyone in the oil and gas industry, the spectacle of an American president sacking the head of General Motors should be chilling. The episode says much about Barack Obama and the radicalism he brings to the presidency. He believes in governmental control of free enterprise. He acts eager to test at least the political limits of executive authority. And, as the federal budget he proposed to Congress shows, he dislikes the oil and gas business.
Whether Rick Wagoner needed to be ousted as GM’s chief executive is not the question here. The question is whether the president of the United States, and not the owners of the company, should make and execute the decision. The answer is no.
Who owns GM?
Obama leads a government to which GM is disastrously indebted. But neither he nor his government owns the company. The president used the government’s status as emergency creditor to arrogate prerogatives of corporate ownership. This is supremely alarming.
For the oil and gas business, politicization of GM is not just some other industry’s misfortune. In his Mar. 30 announcement of plans for GM and Chrysler, Obama said: “I am absolutely committed to working with Congress and the auto companies to meet one goal: The United States of America will lead the world in building the next generation of clean cars.”
GM thus is to become the instrument by which the government will try to override markets and steer US fuel consumption away from petroleum. In perfect harmony with that strategy on the demand side of the market is Obama’s Mar. 31 signing of a lands bill that forecloses oil and gas supply from 2 million acres. Except for the early rejection of windfall profit taxation, every policy initiative on energy from the Obama administration aligns with the off-oil manifesto of environmental extremism.
Obama has made this veer toward btu bankruptcy part of a risky, state-centered makeover of the economy, the prospective debt from which has alarmed even members of his own political party. And he predicates this liberal blitz on beliefs made clear by pronouncements like this one, from a Mar. 24 press conference: “If we don’t tackle energy, if we don’t improve our education system, if we don’t drive down the costs of health care, if we’re not making serious investments in science and technology and our infrastructure, then we won’t grow 2.6%; we won’t grow 2.2%. We won’t grow.”
Like so many from the new president, that statement bejewels vacuity with elegant rhetoric. It is, in fact, indefensible.
Energy, education, health, science, technology, and infrastructure are vital national concerns. They always have been and always will be. That each of them has problems also is nothing new. Some of those problems do need prompt attention.
But the economy can grow in spite of them, and to suggest otherwise is exaggeration. The US had the same problems during the 1980s and 1990s yet experienced unprecedented growth. Indeed, the current economic crisis relates more to financial dysfunction and global imbalance than to anything in the formula of problems against which Obama seeks to leverage socioeconomic overhaul.
Other misdirection
This isn’t the only misdirection at work in Obama’s power move. The president continually holds up the unpopular presidency of George W. Bush as the source of everything needing repair. Yet what he’s really attacking is the market-centered, limited-government orientation of Ronald Reagan’s presidency of 1981-89. It was Reagan’s turn away from high taxation and government activism that made possible an historic cycle of growth. If anything, Bush helped weaken the foundation of Reaganite prosperity with fiscal irresponsibility and market intrusion.
The US government has become a liberal juggernaut threatening harm not only to the oil and gas industry but also to the national economy. The only way to stop it is to discredit a flawed ideological core: the belief that government officials know better than owners do how to run the machinery of wealth creation. Obama has pushed oil and gas into the center of an intellectual fight. The industry must respond.
