So far the U.S. has committed $12.8 trillion to bailing out Wall Street. Does this mean that Wall Street CEOs made mistakes? Apparently not. Because if it did, the Wall Streeters who cost taxpayers all that loot would be out of their jobs.

A few have moved on -- consider Merrill Lynch's former CEO Stan O'Neal, who, after leaving the investment bank with a then-record $2.24 billion loss, received a "kick in the rear" amounting to a $161 million retirement package. (O'Neal is just one of the Harvard MBAs whose destruction of the global economy is prompting some navel gazing at HBS.)

Most, though, are still at their desks, gamely calling the shots. Yesterday, Treasury Secretary Tim Geithner suggested it could be time for that to change.

Plenty of investors have been calling for General Motors Corporation (NYSE: GM) to be removed from the Dow Jones Industrial Average (DJIA) as the automaker hovers on the brink of bankruptcy. But, like it or not, GM's rock-bottom share price isn't justification enough to oust the stock. GM still represents a major chunk of our industrial economy.

However, GM's nationalization would more than justify its removal from the Dow. After all, that's why American International Group (NYSE: AIG) got the boot last fall -- once the government took a controlling stake in the insurance giant, Dow Jones wasted no time adjusting its blue-chip lineup.

Last fall, I suggested that General Motors Corp. (NYSE: GM) ought to follow a six point restructuring plan. One of those steps was to can GM's CEO Rick Wagoner. Under his tenure, which began in 2000, GM's stock has lost 95% of its value and GM has posted $30 billion in 2008 losses while presiding over a North American market share slide from 33% to 19%. What amazes me is that GM's board did not step in years ago. So Monday, President Obama will officially ask Wagoner to step aside.

In 1945, when President Truman first proposed national health insurance, they [union leaders] cheered. In 1947, when Ford offered its workers a pension, the union voted it down. The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible. Walter Reuther [the national president of the U.A.W at the time]...believed that risk ought to be broadly collectivized. Charlie Wilson [president of G.M.], on the other hand, felt the way the business leaders of Toledo did: that collectivization was a threat to the free market and to the autonomy of business owners. In his view, companies themselves ought to assume the risks of providing insurance.

The New York Times reports that General Motors (NYSE: GM) wants a $50 billion bailout due to the credit crunch. It says it can't get the money it needs to build fuel efficient cars. But during the decade, when it was minting money from SUVs and trucks sales, GM could have invested those profits in fuel efficient products. Now that those profits have evaporated, it wants taxpayers to step in.

What kind of bailout does GM want? The Times reports it seeks $50 billion in government-backed loans to retool its plants to build fuel efficient cars. GM is not alone -- Detroit's automakers and the United Auto Workers (UAW) already requested Congress to "appropriate $3.75 billion to back the $25 billion in loans authorized last year." Now they want to double that amount and are "urging Congress to act by the end of September so that the money can be available next year." No doubt the industry is in trouble. The Times reports that "total sales for [August are forecast to be] 14.4 percent lower than a year ago and that G.M.'s sales [will drop] 27.5 percent."

But the economic logic for this taxpayer-funded bailout is tenuous. GM wants the government to leave it alone when it comes to fuel efficiency and it made huge profits on gas guzzlers before the price of oil shot up from $24 a barrel to $117. Thanks to GM's lack of investment in fuel efficient vehicles, its losses are soaring. Most recently it lost $4.4 billion and its revenues plunged 33% from $29.7 billion to $19.8 billion. It wants our money to make up for its bad management. Since its current CEO, Rick Wagoner, has taken over, GM's stock price has fallen 83%. But he still has the support of GM's board.

General Motors (NYSE: GM) posted a $15.5 billion loss in its second quarter. This was much worse than analysts had expected. With its stock opening 8% lower, GM stock has lost 84% of its market value since CEO Rick Wagoner began that job on June 1, 2000. His failure to prepare GM for high gasoline prices, as Toyota Motors (NYSE: TM) has done, makes me wonder whether GM's board is asleep at the switch.

GM's North American results were really bad. The New York Times reports it lost $4.4 billion and its revenues plunged 33% from $29.7 billion to $19.8 billion. But Wagoner has promoted cost reduction plans. In June, Wagoner announced that GM would close four assembly plants making pickups and SUVs by 2010 and cut vehicle production by 500,000. Then, on July 15, he detailed a 20% cut in "salaried personnel costs, the elimination of health-care coverage for white-collar retirees past the age of 65, and cuts in advertising and marketing budgets and capital expenditures," according to the Times.

Some Administration officials have been touting the wonders of a cheap dollar as if that will save our industries from a collapsing domestic economy. They should think again. Meanwhile, it is a testament to Wagoner's board relationships that there have not been calls for a new CEO. There is absolutely no way that GM can cut its way to prosperity. He has led GM into a situation where his choices are to cut costs or to file for bankruptcy. During the booming SUV and truck years, Wagoner could have invested the profits in energy efficient vehicles.

His failure to do so has jeopardized GM and should end his role as its CEO.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

MAJOR PAPERS:

• Rick Wagoner, the CEO of General Motors Corporation (NYSE: GM), hit out against allegations that the auto maker may soon file for bankruptcy and said he believes the company's financial position will "remain robust" for the rest of the year. Wagoner also said, the Wall Street Journal reported, that the company has no plans to sell or reduce more of its brands.
• An independent Yahoo! Inc (NASDAQ: YHOO) would be better for the world, Google Inc (NASDAQ: GOOG) CEO Eric Schmidt said and the Financial Times reported. Yahoo! will be able to create more competition in the search market and other advertising markets if it stays independent, Schmidt contended.

• According to people briefed on the plan, the New York Times reported that senior Bush administration officials are weighing a plan to have the government take over either Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, or Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac -- or both -- and place them in a conservatorship if their problems continue or worsen.
• The New York Times also reported that people briefed on the matter said Anheuser-Busch Companies Inc (NYSE: BUD) is in active talks to sell itself to InBev in a friendly deal, despite previous hostility to the idea. One person said InBev indicated it may be willing to pay more than the $65 per share originally offered.