The CEO president

When first elected, George W. Bush aspired to be the "CEO president." The label referred only to his (overhyped) business sensibility. President Barack Obama has become the CEO president in fact, responsible for a swath of American industry and finance.

President Obama flexed his corporate muscles recently and fired General Motors CEO Rick Wagoner for failing to produce a credible reform plan for his company. President Obama said the next day that "GM is announcing that Rick Wagoner is stepping aside" — as if Mr. Wagoner hadn't reported to the Treasury Department to receive his order to self-defenestrate.

It used to be that what was good for GM was good for the country; now, the country is going to decide what's good for GM. It used to be that presidents only could fire chiefs of staff and Cabinet members; now, President Obama can fire any of the corporate officials who effectively work for him. It used to be that the country had clearly delineated public and private sectors; now, they are mashed together in an arrangement vastly increasing governmental power.

Two, if politicians and bureaucrats knew how to run car companies, they'd probably be working for Toyota or Ford. President Obama's automotive task force has almost no experience in automobiles and includes no fewer than three experts on climate change (presumably on the off chance that GM and Chrysler revive enough to begin despoiling the planet again).

Three, once a corporation is dependent on government, it makes business decisions not on the merits, but to please its political masters. GM has been heavily involved in developing the politically correct Chevy Volt, an electric car. As the Obama automotive task force concludes, "While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable." You don't say?

The American system has a proven method of restructuring salvageable but insolvent companies that avoid all of these pitfalls. It's called Chapter 11 bankruptcy, where a judge can rip up a company's obligations and launch it anew without the taint of politics. It's where GM and Chrysler should have gone last fall (perhaps with some minimal government support), before the Bush administration first bailed them out in a fit of political panic.

President Obama is raising the prospect of allowing the companies go into Chapter 11 if they can't soon find that elusive path to viability. He insists that he has no interest in running the auto companies, an assurance he can prove is sincere — by not running the auto companies.

— Rich Lowry is editor of the National Review.