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The fall of General Motors Chairman and Chief Executive Officer Rick Wagoner was unavoidable. There is no way President Obama could hand out more billions to a management with a practically unblemished record of failure.

Yes, it's certainly good news; the Wagoner management was never going to turn around General Motors (nyse: GM - news - people ). Never. After all, Wagoner has been chief executive since 2000 and head of North American auto operations six more years before that. His predecessor and mentor, Jack Smith, became chief in 1992. GM lost market share in the U.S. in all but a couple of those years. The losses in Wagoner's last four years topped $80 billion.

Worse, GM seemed adrift in this crisis. Its European operations--and they are key to saving GM--seem to be without serious direction. In the U.S. we hear mostly of program cancellations, and the Vice Chairman Robert Lutz, the only real "car guy" in top management, is giving up and retiring at the end of the year.

But it might be a mistake to cheer Wagoner's leaving, because we don't know if his replacement will be any better. The second in command, the president and chief operating officer, is Fritz Henderson, and he is expected to succeed Wagoner, at least for now. Frankly, it is difficult to see what he did to become president of the once largest automaker in the world. Like Wagoner, he is a fairly colorless financial officer. But it's unfair to knock him before he's had a chance to do something.

What GM needs in this crisis, of course, is a spirited leader, a fighter, who can speak to the American people and convince us that GM is coming back. He's got to have a feel for the business, for the product, for the car buyer, and not just for the balance sheet. And he's got to be willing to wave the flag too in these desperate times. We're talking about the likes of Lee Iacocca, who brought Chrysler back, and George Romney, who saved American Motors. Finance men can be heroes too: Sergio Marchionne, who is leading the recovery of Fiat (nyse: FIA - news - people ), is a good example.

Rick Wagoner had some successes. The 0% financing offers after Sept. 11 might have kept the country out of a recession. He always pushed China. And hiring Robert Lutz, the retired president of Chrysler, to lead a GM product renaissance was an excellent move, although it showed how weak GM had become in products, so weak it needed an outsider to fix its cars.

But these strokes are overshadowed by the constant failures. Wagoner took over as chief of North American auto operations back in 1994. He was given the job by Jack Smith, although Wagoner knew nothing about the American auto business. He had been chief financial officer. At that time GM's U.S market share was 33%. The last month counted, February, the share was 18% and sinking.

And GM under Wagoner missed trend after trend: GM was late into crossovers, meaning sport utility vehicles built on car platforms, which are big thing now. GM was late into small SUVs, like Ford Motor's (nyse: F - news - people ) Escape or Honda's (nyse: HMC - news - people ) CR-V. GM was not only late in hybrids--it doesn't seem to understand that the lure is high miles per gallon, 40 to 50 miles per gallon. It's bringing out a Camaro now, years after Ford redid its Mustang and after Chrysler redid its Dodge Challenger. If anything represents GM vehicles under Wagoner, it might be the failed Pontiac Aztek, which was considered the ugliest American vehicle in modern days.

But Wagner's worst sin was to allow his company to build boring cars with outmoded engines and transmissions, just awful interiors and poor fits and finish. His administration showed disrespect for the product, the engineers who created it and the customers who bought it.

His administration allowed Toyota (nyse: TM - news - people ) to overtake GM and become the world's largest automaker, and next year it's likely that Toyota will become the No. 1 seller in the U.S. too. He not only lost the low and middle market to the Japanese, but he lost the luxury end to the Germans. GM's trucks and big SUVs were a success, but it was madness for a car company to ignore cars--and that was Wagoner's responsibility. By the time he realized that GM needed someone at the top who understood cars and hired Lutz it was too late.

To be fair, the latest collapse was caused by that $4 a gallon gasoline and then the recession, neither of which were of Wagoner's doing. But all those years of failure were.

He created the vanishing auto company. Oldsmobile closed; Saturn, Hummer, Saab and Pontiac to go.

How did he manage to stay on despite all the failures? First, the GM board of directors are pet rocks. Second, Rick Wagoner seemed to be a decent man. He didn't seem to pay himself grotesquely or live an obscene style. He had a pleasing personality. He just didn't understand the American car business. The Detroit and auto press were amazingly uncritical.

But he and his predecessor Jack Smith had created a management system that cut "car people" from top positions. And as GM suffered market share losses every year, the answer wasn't to create exciting cars to win back share but to go to the balance sheet to cut costs and sell off pieces of the company, like GMAC (nyse: GJM - news - people ), for cash.

Auto companies can be saved: In recent years Carlos Ghosn turned around Nissan (nasdaq: NSANY - news - people ) and Marchionne turned around Fiat. But the new billions from the government won't save GM, and all the recovery plans are meaningless. It will take leadership.

In a stunning rebuke, the Securities and Exchange Commission chairman blames his career regulators for a decade-long failure to investigate Wall Street money manager Bernard L. Madoff, now accused of running one of the largest Ponzi schemes ever.

On Tuesday night, SEC Chairman Christopher Cox ordered an internal investigation of what went wrong and offered a scathing critique of the conduct of his staff attorneys. He said they never bothered to seek a formal commission-approved investigation that would have forced Madoff to surrender vital information under subpoena. Instead, the staff relied on information voluntarily produced by Madoff and his firm.

Credible and specific allegations regarding Madoff's financial wrongdoing going back to at least 1999 were repeatedly brought to the attention of SEC staff, said Cox.

A former SEC attorney, Eric Swanson, married Madoff's niece, Shana, last year, The Wall Street Journal reported. The SEC's compliance office issued a statement Wednesday saying that Swanson was part of a team that looked into Madoff's securities brokerage operation in 1999 and 2004. The SEC cited its "strict rules" prohibiting employees from participating in cases involving firms where they have a personal interest.

The SEC's inspector general, David Kotz, told the Journal that he intends to examine the relationship between Madoff's niece and Swanson.

Madoff remains free on $10 million bail. A hearing is scheduled in federal court in New York on Wednesday afternoon to iron out the terms of his bail package.

Shock waves from the Madoff affair have radiated around the globe as a growing number of prestigious charitable foundations, big international banks and individual investors acknowledge falling victim to an unprecedented fraud.

The U.S. government may start guaranteeing the mortgages of some homeowners who are heading for default, in hopes of convincing lenders to renegotiate the terms of troubled loans and avoid more foreclosures, Federal Deposit Insurance Corp. chairman Sheila C. Bair said today.

Bair told the Senate Banking Committee that the recently approved economic bailout package included authority for the Treasury Department to offer government loan guarantees and other incentives as a way to encourage banks and mortgage lenders "to prevent avoidable foreclosures."

There has been a "failure to effectively deal with" the mortgage foreclosure problem, Blair said.

The FDIC chairman has argued that the extensive set of financial rescue strategies deployed in recent weeks needs to do more to get at what she called the "root cause" of the crisis -- millions of households heading for default on their mortgages and potentially foreclosure on their homes.

Falling home values have been a key part of the dynamic. Some families took out loans with adjustable or low introductory rates, convinced that rising home values would let them refinance or sell before higher interest rates kicked in. When home values fell and credit markets froze, those same homeowners found themselves owing more on the property than it was worth, unable to refinance or cover their loan through a sale.

Bair said new efforts to stem foreclosure are needed, even if it means the Treasury offering to absorb losses on some soured mortgages.

"Loan guarantees could be used as an incentive for servicers to modify loans," Bair said. "Specifically, the government could establish standards for loan modifications and provide guarantees for loans meeting those standards."

Questioned by Sen. Chris Dodd (D-Conn.) as to whether the FDIC has the capacity to handle such a program, Blair said the Treasury Department would be in charge, and the FDIC would act as a contractor to help guarantee loans.

One big hurdle for private mortgage companies looking to restructure loans is that no industry-wide framework has been established to guide the process. "They've been doing it ad-hoc," Blair said.

Neel Kashkari, the interim head of the government's $700 billion rescue effort, said the Treasury Department is still in the "policy process" of figuring out how the program would work.

Bair said the program would be short-term, with federal assistance ending June 30. The temporary nature of the program, she said, is the key to preventing private banks from depending on federal help for all of loans.

Kashkari said the restructured loans would be handled by the banks themselves, but with "very specific instructions consistent with our objectives."

Although the program is first focusing on the residential housing market, there is a possibility it could be extended to the commercial real estate market as well, officials said.

Dodd emphasized a sense of urgency. "There are more than 10,000 foreclosures a day," he said. "I hope there's a deep appreciation that we need to get this moving."

Also today, RealtyTrac reported that U.S. foreclosure filings increased 71 percent in the third quarter from a year earlier, reaching the highest on record. A total of 765,558 U.S. properties got a default notice, were warned of a pending auction or were foreclosed on in the quarter, the most since records began in January 2005.