Puppet masters

With billions of dollars invested in U.S. automakers in 2009, some are saying the federal government missed a golden opportunity to clean up the industry.

One of those is consumer advocate Ralph Nader, The Washington Post reported Friday.

At the crux of the matter is the decidedly odd arrangement of the U.S. government owning, at one point, a 61 percent of General Motors, but declaring it would maintain a hands-off approach and allow the company to run itself.

Granted this was after Barack Obama's auto industry team plucked Chief Executive Officer Rick Wagoner out of his chair and replaced him with Chief Operating Officer Fritz Henderson, who was, in turn replaced by the headstrong Chairman of the Board Edward Whitacre Jr. But let's not quibble over particulars.

In the main, the federal government kept its promise. And while it did, according to some, the company splurged on lobbying, spending $6.6 million in 2010 to persuade Washington lawmakers to ease back on a push to increase fuel efficiency standards, among other things.

GM last year also pushed lawmakers to resist a bill that would put operation recording devices in all cars, like black boxes in planes, so investigators could track a car's behavior before an accident. The bill would have also increased fines for automakers that ignored data about defects, given the increased amount of information on accidents that would have been available.

Joan Claybrook, the former head of the National Highway Transportation Safety Administration, called GM's lobbying against federal initiatives while the government was the company's largest shareholder "unethical."

GM spokesman Greg Martin, in turn, said: "GM still retains the same First Amendment rights its competitors do. When you consider we are a global company that sells a machine that weighs several thousand pounds with an equal number of parts, there are very few policy issues that don't affect us."

Put that way, it seems far more ethical to ask a U.S. company to speak up than to shut up, especially when the majority is owned by the government. A company's board is there in part to protect the interests of its shareholders.

In that sense, bailing out a company could eliminate a neat trick called checks and balances in which adversarial points of view are allowed their day in court. The only way to protect this was for the Obama administration to stay as far away from the board room as possible. If GM made some serious blunder while the government was telling it what to do, who would sue whom? Would the Justice Department sue the White House had GM's board hidden a defect that resulted in costly accidents? In that light, grabbing complete control of GM might have been a bigger mistake.

In international markets Friday, the Nikkei 225 index in Japan lost 0.86 percent while the Shanghai composite index in China fell 1.29 percent. The Hang Seng index in Hong Kong rose slightly, up 0.18 percent, while the Sensex in India fell 1.68 percent.

The S&P/ASX 200 in Australia rose 0.13 percent.

In midday trading in Europe, the FTSE 100 index lost 0.95 percent while the DAX 30 in Germany dropped 0.51 percent. The CAC 40 in France lost 0.41 percent while the Stoxx Europe 600 dropped 0.81 percent.