Blurring the Line Between Business and Government

President Obama grabbed the proverbial steering wheel on Monday, shaking up the American auto industry by stating tougher conditions for receiving federal subsidies and forcing GM’s CEO to step down. But critics are wrong to suggest that this represents an unprecedented use of executive power.

Los Angeles Times:

The notion that it was the president, not car company executives, who would pick such a course drew immediate criticism, especially from conservatives.

“When did the president become an expert in strategic corporate management?” said Rep. Tom Price (R-Ga.), chairman of the conservative Republican Study Committee. “The federal government is famous for its mismanagement, yet this administration continues to demonstrate its certainty that Washington always knows best.”

Sen. Bob Corker, a Tennessee Republican, called it a “power grab” that “should send a chill through those who believe in free enterprise.”

And Rush Limbaugh declared in his daily radio broadcast, “There’s always been a line, ladies and gentlemen, over which no president would cross with respect to the distinction between the public and private sectors. Obama has now crossed that line where there is no limit to government’s destruction of private activity or control over it.”

Rep. Jane Harman (D-Venice) defended the administration, suggesting that Detroit had had its chance. “My feeling is that we were too tolerant for too long and this is the tough medicine the taxpayer wants. And we have to reinvent our auto industry, or it will die.”

Other Obama defenders pointed to historic precedents for intervening in the auto industry.

Obama’s actions are “consistent with the pattern of presidents acting during economic crises,” said Allan Lichtman, a professor at American University and an expert on the presidency. “And it’s absolutely consistent with patterns of presidents intervening to make sure major components of the economy don’t fail.”

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