Will the media—and the people—get the message on Chrysler and Obama?
Sometimes I think I’ve been writing too many posts on Obama’s handling of the Chrysler crisis. But the tale seems especially important because this is one of those times when Obama’s mask of affable reasonableness has slipped most dramatically, exposing the ruthless pol beneath—the former Con Law instructor with utter contempt for the rule of law.
I don’t know how many people who voted for Obama now see what’s going on, because you have to be paying attention to perceive it. But I have noticed one thing: suddenly, I’m reading criticism of Obama in some of the mainstream media, and/or from publications that supported him in the election.
Take the Economist. Pre-election, it was utterly in the tank for Obama. But this unsigned editorial appeared there yesterday. It certainly isn’t the most hard-hitting of all the pieces I’ve read on the subject, but it lands a few quiet punches:
The collapse of Detroit’s giants is a tragedy, affecting tens of thousands of current and former workers. But the best way to offer them support is directly, not by gerrymandering the rules. The investors in these firms are easily portrayed as vultures, but many are entrusted with the savings of ordinary people, and in any case all have a legal claim that entitles them to due process. In a crisis it is easy to put politics first, but if lenders fear their rights will be abused, other firms will find it more expensive to borrow, especially if they have unionised workforces that are seen to be friendly with the government.
“Easy” to put politics first? You betcha. Also wrong—and particularly galling from one who promised to be above such petty partisan posturings. Some of those who believed Obama when he said he wouldn’t do this sort of thing might actually be shocked right about now. Others don’t care; they applaud him sticking it to the evil creditors (never mind that they’re doing their jobs protecting the money of ordinary investors) and rewarding the noble autoworkers (never mind that their unions have grown into powerful political forces winning them huge benefits that have helped to cripple the auto industry as they simultaneously give tons of money to Obama and his party).
And then there’s CBS, which has posted a sharper piece by Declan McCullagh. He doesn’t shy away from calling Obama’s actions “dirty politics” (that’s in the headline), nor does he leave out the allegations by lawyer Thomas Lauria of government threats to his Chrysler creditor clients.
Could this be the faint stirrings of a sea change in press coverage—and public attitudes—about Obama? I don’t know, although one can hope. But if it is, it wouldn’t be the first time that a politician, drunk with his own success, has overplayed his hand. Let’s just hope people start noticing.
In my opinion not enough has been said about this. If you put this in another time…say ninety years ago we would have to assume that the president learned these tactics on the southside of Chicago.
Or maybe he did.
Neo,
I think that most of the media will not ‘get it’. I’ll even go so far as to say, they will become even more over the top in support for him as his facade dissolves before our very eyes.
The reason that I think this will happen is because thay can not admit their error because it would confirm how ‘in the tank’ they were for this clown. It would confirm all of our worst assumptions of media bias, etc.
Though some may come out and speak the truth, I suspect that most will quietly acquiese and many will tacitly support what is going on. The media model is obsolete and they are riding the dinosaur into the grave. Only (gasp) government intervention will save them. Even though Obama says it won’t happen. How much of what he says can we take at face value?
I don’t think you’re writing too many posts about the Chrysler crisis. We are at a very dangerous place in the life of our nation, and the more we discuss it online, the better will be our understanding.
I just watched Dr. Sanity’s link to a short video showing just how clueless some college students are about Obama’s redistribution plans. Sure it seems easy to rob the superrich out of a few millions “that they won’t miss,” but the implications are horrendous.
Already people are refusing to buy U.S. bonds. U.S. bonds have always been considered the safest investment in the world. Now they are just as iffy as any other investment–that’s a major drop in the value of a brand name. If a small investor like me thinks that U.S. bonds are risky, then we can expect to see some big disasters ahead.
Argentina anyone?
The more outrageous Obama is the more the typical liberal says to himself…”Wow, Bush musta really screwed things up to warrant all this”.
I heard that on Hannity’s show by a liberal Steve.
The authority to do this comes from Chrysler coming hat in hand asking for taxpayer money to liquefy their bankruptcy. If the government is not providing the money, the investors would be losers anyway.
So the question for critics would be what policy would you do differently? Would you support paying more taxpayer money in order to make the investors whole? Or would you support letting Chrysler discontinue operations as a going concern with the attendant job losses and damage to the economy?
I agree with the approach of the Obama administration that there is a government policy stake in bailing out the operations of Chrysler — if it can be done as a temporary bridge to a stable future — but no government stake in bailing out the investors.
It will take a while longer but more people will “get it” (at east I hope they will). I am starting to see more panic in the eyes of the liberal pundits who continue to parrot, “Obama inherited this from bush”. They know it’s sounding trite and not playing that well anymore, but they don’t really have much else to say.
Foolish people trying to force all this in the early going with the economic situation. I am not surprised that Obama overreached because he overreached himself right into the white house. However I am bit surprised at his advisers. But then again – may be they share his hubris or are just being overruled.
“Could this be the faint stirrings of a sea change in press coverage–and public attitudes–about Obama?”
Could be a trend of moderate dems taking a few steps back… but not all dems in the media are only moderate dems…
copithorne Says:
” If the government is not providing the money, the investors would be losers anyway.
So the question for critics would be what policy would you do differently? ”
The investors’ gripe is they’re being ripped off by the government. That they could have done better without the government providing money… in a court liquidating the assets.
a socialist promise isnt worth anything.
they have end justifies the means basis for action.
therefore, ipso facto, you can NEVER trust any of them.
what keeps them from breaking it?
their morals are situational and change to whatever is needed to give them advantage.
everything is justified, including everything completely evil, nasty and immoral
they are making utopia after all and NOTHING will stand in their way. Especially something so small and unthreatening as a nyah nyah you didnt keep your promise.
imagine trying to change the future by chastixing hitler, stalin, lenin, mao, pol pot, castro… for lying.
sheesh
“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly – it must confine itself to a few points and repeat them over and over”
“Think of the press as a great keyboard on which the government can play.”
“Faith moves mountains, but only knowledge moves them to the right place”
Whoever can conquer the street will one day conquer the state, for every form of power politics and any dictatorship-run state has its roots in the street.”
“So the question for critics would be what policy would you do differently? Would you support paying more taxpayer money in order to make the investors whole? Or would you support letting Chrysler discontinue operations as a going concern with the attendant job losses and damage to the economy?”
Various things – I wouldn’t have sold them to the UAW nor would I be trying to force them to keep their highest loss cars (and add a new one) simply for being a “green” car.
Secondly, yes I would have let them go chapter 11 – there are larger companies in the past that have done that, it is what it is for. Nor is this going to stop it (indeed, it seems to me that it will most likely force chapter 7 at a later point and then we get to double loose). You will also note the “11” part – you do realize what the difference is there from chapter 7 do you not (from your post you do not seem to know the difference, however I more assume that is intentional for political reasons)?
The credit industry has to be saved at nearly any cost, I may not like it but it is so. Chrysler, Ford, and Chevy? Nope. If the credit industry folds then there is no where else to go, Detroit folds and we just are not going to suddenly quit buying/selling cars. Those companies that are profitable (say Nissan, Toyota, etc) will step in and if our big three can not restructure into a profitable company they are better off gone anyway (the govt would get a better return for the money just giving all the taxpayers back that money). This is especially true in the US – we aren’t simply going to go back to one care per household and keeping it 20 years because Chrysler has to restructure.
While yes those are “Japanese” companies, they are more so for now historical reasons than reality. Indeed, the Toyota you purchase here probably has more parts, more assembly, and more money stay here than a Chrysler or Chevy.
Those nuts, bolts, steel, and all those tertiary concerns being raised will be filled there, any one who thinks otherwise hasn’t really thought it out very much. That market isn’t loosing money because of a bad market – the demand is there for fairly large profits. They are loosing money because of bad management, putting even worse management in there with more money isn’t going to solve a thing. That is what chapter 11 is designed for, let it happen.
So Thomas would liquidate Chrysler to satisfy the creditors. I guess, you would skip any bailout in that case.
I actually doubt the creditors would recover much in that case. But in any case I come down on the side of saving Chrysler for the sake of the workers and the suppliers and the economy versus liquidate Chrysler for the sake of the creditors. I’m confident that is a political winner.
And strcpy I struggle to understand what you are saying. Chrysler did file for Chapter 11 bankruptcy. That’s where they are now.
I don’t know that any part of Chrysler was ‘sold.’ Chrysler had no value. Fiat got there share for nothing. UAW got their share for labor concessions. Nobody else was offering anything. So the UAW part of the deal doesn’t impinge on the creditors. It actually seems pretty inspired to have the union and the Board and the management all on the same side as they go through this transition. If you could share more of what you see as the problem, I could understand better.
Eff ‘em. Eff ‘em all. The workers, through the UAW, caused this problem, and they should suffer from it. Wipe out all contractual obligations to them. Save their jobs? Hell no — I want them on the bread lines, because that’s where they deserve to be, because of their unbridled greed. Union members need to know that it is possible to push for too much, and that if they do, they will share in the pain.
I’d say the same thing will Wall Street, for that matter, although I appreciate that the entire country needs a functioning credit system, and so for that reason — and that reason alone – I would reluctantly accede to bailing out banks. But we don’t need a functioning Chrysler (or GM). So they should go the way of the passenger pigeon.
copithorne Says:
“So Thomas would liquidate Chrysler to satisfy the creditors. I guess, you would skip any bailout in that case.
I actually doubt the creditors would recover much in that case.”
They don’t seem to agree, otherwise they’d just give in without the arm twisting.
Also, you could do the same bailout type things via bankruptcy (re: you don’t just jump straight to liquidation… and even if you did, the factories might be bought up by another car maker… to make cars…). Some of the bank bailouts and the auto bail outs are show (to prevent the look of there being problems). They’ve been huge wastes of money in return for nothing… Many banks were only insolvent on paper due to mark to market rules (re: an administrative / regulatory decision)… and the automakers did not do well despite the cash infusions…
Chrysler needs to go bankrupt. They are no different than a lemonade stand paying more in overhead than the lemonade can be sold for.
How it “helps the economy” to continue this farce defies logic. Unless temporarily postponing job losses is somehow more important than the long term viability of an industry.
Chrysler is bankrupt. That’s what’s happening now.
I gather that political mood here is hostile to American workers. Chrysler should be liquidated, the workers fired and forced into poverty. If we throw the midwest into a depression, that will teach unions a lesson.
No wonder the Republican Party is as popular as it is now. With a platform like that, people will flock to the banner.
And all this is a little afield from neocon’s original topic. Hurting the workers does not itself secure the creditors. The real question at stake is should the taxpayers bail out the creditors?
I did look into the UAW stake in Chrysler. As I understand it the stake is owned by the UAW Pension Fund Trust and is meant to compensate for the underfunded pension plan. Currently the stake has no value. If the stake rises in value beyond what is necessary to fund the pension plan, the excess value goes back to the US government to repay for the bailout. And the UAW only gets one seat on the board out of nine. So, it isn’t what it appears.
The issue, copithorne, is not that Republicans are “hostile to workers”, it’s that secured creditors were screwed in favor of the UAW, in direct violation of bankruptcy law. What that does is ensure that any secured creditors with a position in a UAW-related business will sell their stake as soon as possible, thereby making the UAW less able to fund further pension benefits. Since Chrysler is “bankrupt anyway”, the workers probably will not have the jobs they so eagerly plundered to force the company out of business in the first place. Lose-lose, see?
Not American workers. American unionized workers. American unionized workers who bled their employers white for decades, always grasping for more money in return for less work (surely we can agree that union work rules do not promote productivity, yes?). And now their chickens have come home to roost, in Jeremiah Wright’s immortal phrase. As the UAW has sown, so should it reap.
Big difference.
I didn’t say it would be popular. Stupid people flock to stupid banners all the time (vapid exhortations to Hope! Change! leap to mind in this connection). But it’s what should be done. We need union members to realize that they have a stake in the welfare of their employers, apart from just trying to screw them, as do employers to their employees.
Sorry, but you’re consistently missing the point. You’re framing this as workers vs. creditors. I wouldn’t bail out anybody. I wouldn’t give the creditors a dime — but neither would I give the UAW a dime. Put Chrysler in Chapter 11, recast all of its obligations, including its union contracts. Scrub ‘em clean, and start over again, if anyone is so inclined.
The present situation screws taxpayers and creditors to the benefit of a union that is largely responsible for the problem. Creditors loaned money to Chrysler based upon agreements specifying that they would be repaid first. Now the government — not originally a party to any of the agreements — fundamentally changes their nature to reward the union — a major Democratic constituency — by moving them to the front of the line (for no earthly reason other than garden-variety corruption and cronyism).
Further bear in mind who the creditors are. Liberals think of lenders/creditors as greedy capitalists smoking cigars, such as the hedge funds Obama recently denounced. But where do hedge funds get the money they invest? From pension funds. From university endowments. From insurance companies. (And yes, some from wealthy individuals, but few individuals have as much money to invest as the institutions listed above.) So the people getting screwed are…other workers, through hits to their pension funds.
Think about this: who in his right mind would ever loan Chrysler money after this moronic Obama plan? Not even liberals are that stupid.
Yeah, that’s gonna happen. Because that’s the agreement, right? Secured senior creditors thought that they had an agreement too, but it was abrogated with a stroke of the pen. Do you see the problem with what Obama has done? Because of his actions, nobody knows what’s going to happen in the future. An agreement today may not mean a thing tomorrow. What do people do when faced with this kind of uncertainty? Hunker down, and avoid risks…such as lending money. That’s the problem.
Put it this way: would you invest in a new Chrysler bond issue? Of course not. No one would. And no one will.
“”No wonder the Republican Party is as popular as it is now. With a platform like that, people will flock to the banner.
Copithorne””
The right thing to do is often unpopular. Too many children in grownup bodies never figured this out. So reality will figure it out for them.
Yes. The position of Barack Obama and his supporters is that the US government has an interest in bailing out the operations of Chrysler in order to protect jobs and the economy. We don’t have a stake in bailing out the creditors. US tax dollars should not go to bailing out Chrysler creditors.
The wrinkle to normal bankruptcy proceedings is this government bailout. Barack Obama is demonstrating leadership by saying that the bailout is not intended to bailout the secured creditors. Secured creditors do not have a claim on the assets provided by taxpayers. The creditors are good people and we’re sorry for their loss. But its their loss, not the taxpayer’s loss.
So I can understand if you want no bailout. Let Chrysler fold. Close the plants and sell the parts for scrap. Fire the workers and send them to the bread lines. It would have to be demonstrated to me that the creditors would come out ahead under that approach. I bet they don’t. We’ve already demonstrated that no one was paying cash for Chrysler’s ‘assets.’
And I have to presume that neocon and others did not intend for the obligations of the tax payer to be expanded to cover the losses of the creditors. Nobody has been willing to answer that question, so I’m left just guessing. If I’m wrong and you believe that the secured creditors should be made whole by the taxpayer, let me know.
So, the creditors are screwed in any event and neocon’s focus on the creditors is an empty complaint. The question is do you bail out Chrysler or do you not? You guys say no. Duly noted.
Here are some suggestions about government action that could help the auto industry:
Discontinue regulating automobile mileage so the American companies can focus on vehicles that are in demand by customers instead of government planners. At least get rid of the two fleet rule that prevents them from just importing and reselling the small cars they need to meet CAFE.
Change the auto dealer franchise laws that compel companies to keep feeding the dealer networks that were designed for the market of the 1950s. (Good to be a company that created a distribution channel more recently.)
Let’s be precise: to protect unproductive jobs, because those workers are producing automobiles that Chrysler can’t sell.
Quite right. To hell with the pension funds that are among the creditors. Those workers can get stuffed.
No. Barack Obama is demonstrating corrupt cronyism of the first water by buttering the bread of a major Democratic constituency. That’s the sole reason for abrogating bankruptcy law in the UAW’s favor.
But why should the union benefit? They caused the problem in the first place. Manufacturing cars is profitable for non-unionized companies, but not for unionized ones. It’s as simple as that.
I don’t care about the creditors, particularly. I wouldn’t go to any lengths to help them. They’re big boys and girls. They took a chance lending money to a crappy union-infested company. If they make money, fine. If they lose money, fine. But don’t move the goal posts on them now. Chrysler and the creditors had a deal. The terms of that deal should be honored. How it turns out is how it turns out. It’s not fair to invoke “King’s X” at this juncture.
Put it another way. If the creditors had appreciated that a future government might interfere in the deal to their detriment, would they have done the deal? No — certainly not on the same terms. They would have insisted on much more lucrative terms to compensate them for the additional risk.
For God’s sake, would you get off this bleating about paying off the creditors? No one here has ever said anything about covering the losses of the creditors. No one. Ever. So guess no more. Put the company in bankruptcy, reorganize or liquidate it, whatever, but do it in conformity with the law and equity. Putting creditors at the back of the queue in a Chrysler bankruptcy — when the lending agreements called for them to be at the head of the queue — is just wrong.
Put it another way: suppose your mortgage lender decided tomorrow that they needed more capital, and so they were raising your mortgage payments to $20 K/ month. You’d be honked, right? Why? Because that wasn’t the deal. You entered into the deal with expectations and assurances, based upon which you decided the deal worked for you, and they decided it also worked for them. Now the deal has been recast to your detriment. That’s why it’s unfair.
Make sense?
“Occam’s Beard”, your 6:19 post was the most intelligent explanation of this issue and I applaud you.
Check out this post How Do I Know That the Chrysler Bailouts are About the Unions?, with which I fully agree.
S. Graham, thank you. You’re too kind. /g
I agree that Occam’s Beard’s post describes the situation well. The crux of the matter is that most of us here prefer the rule of law. There are others who prefer the rule of men.
Will the media and the public get the message? I’d have thought quadrupling the national debt would have done it. Obama is taking ownership of the Chrysler crisis, perhaps to counter the campaign criticism that he lacks executive experience. Come to find out his executive style is that of a Chicago machine politician. I think some Americans will be surprised and displeased. I doubt the media will backpedal, though. Their investment is too great.
stumbley Says:
May 8th, 2009 at 6:01 pm
Free markets require the rule of law to function, and they also hate uncertainty. Obama has thrown the rule of law out the window (or under the bus, if you prefer). This also ramps up uncertainty. No one will want to invest or lend in an environment in which they don’t know what the government will do next. Obama is systematically knocking the props out from under capitalism.
This is why I believe his actions are deliberate.
Wow! I am new here but I really appreciate the politeness of the discourse.
It has been stated repeatedly by the “holdout” non-tarp lenders that they offered to take 50 cents on the dollar for their secured debt. For a secured creditor conceivably entitled to first dibs on their secured debt, this appears reasonable…and not a failure to negotiate or expectation of “bailout”. It may be that Chrysler has no assets from which these creditors can seek reimbursement, but that will be sorted out in bankruptcy court proceedings.
The most disturbing element of the Obama administration’s proposal is the blatant favoritism shown to the union over secured creditors with solid legal rights. The fact that the president excoriated these entities despite the fact that they had the law on their side is even more scary.
http://www.fff.org/freedom/fd0703a.asp
In fact, there is a remarkable similarity between the economic policies that Hitler implemented and those that Franklin Roosevelt enacted. Keep in mind, first of all, that the German National Socialists were strong believers in Social Security, which Roosevelt introduced to the United States as part of his New Deal. Keep in mind also that the Nazis were strong believers in such other socialist schemes as public (i.e., government) schooling and national health care. In fact, my hunch is that very few Americans realize that Social Security, public schooling, Medicare, and Medicaid have their ideological roots in German socialism.
Hitler and Roosevelt also shared a common commitment to such programs as government-business partnerships. In fact, until the Supreme Court declared it unconstitutional, Roosevelt’s National Industrial Recovery Act (NIRA), which cartelized American industry, along with his “Blue Eagle” propaganda campaign, was the type of economic fascism that Hitler himself was embracing in Germany (as fascist ruler Benito Mussolini was also doing in Italy).
As John Toland points out in his book Adolf Hitler, “Hitler had genuine admiration for the decisive manner in which the President had taken over the reins of government. ‘I have sympathy for Mr. Roosevelt,’ he told a correspondent of the New York Times two months later, ‘because he marches straight toward his objectives over Congress, lobbies and bureaucracy.’ Hitler went on to note that he was the sole leader in Europe who expressed ‘understanding of the methods and motives of President Roosevelt.’”
But in any case I come down on the side of saving Chrysler for the sake of the workers and the suppliers and the economy versus liquidate Chrysler for the sake of the creditors.
Thief!
Secured creditors do not have a claim on the assets provided by taxpayers. The creditors are good people and we’re sorry for their loss. But its their loss, not the taxpayer’s loss.
If Chrysler goes bankrupt and the unions and pensioners get screwed, that’s bad. When secured creditors get screwed, the economy gets screwed, that’s worse.
the economy vs a company…. How can you not understand?
Or is this just one of those dirty leftist “workers unite!” things?
Could this be the faint stirrings of a sea change in press coverage–and public attitudes–about Obama?
No. Never.
I don’t know, although one can hope. But if it is, it wouldn’t be the first time that a politician, drunk with his own success, has overplayed his hand. Let’s just hope people start noticing.
They like it. 2/3rds of the American Population like what he is doing. We are the yammering oddballs.
Gray: It is uncomfortable being in the minority but I an not sure the polls reflect reality. I have never been polled…nor have any of my friends, family or co-workers….90% of whom still identify republican though we were frustrated with Bush at times. I believe that 1/3 of the people thiink Obama is going to address their individual problems and deficits. When that lofty goal is not realized, poll numbers will change. When the other 1/3 of the “intelligentsia” (sp?) realize what Obama really has in mind for the country, the winds will change. I hope we can unite and survive…but I am fearful and lose much sleep.
Has anyone else thought how easy it would be to wake up and simply declare yourself a liberal and be suddenly happy with everything going on at present. But that would be a denial of everything I believe…but it sure would be easier to put my head on the pillow at night.
Bottom line: would Obama have done this to save a company when doing so didn’t involve deep Democratic interests? Would he have bailed out, say, talk radio?
Would he hell. There’s no way. It’s payola, straight up, and corrupt.
Yes, and 1/2 of the people believe in the Easter Bunny. That’s the problem.
Seriously, how stupid does one have to be to believe that the President of the United States could address one’s personal problems and deficits, even if he wanted to?
Sorry, one last point. Obamanauts love to gush about his “brilliance,” which to my mind only prove their intellectual poverty.
Consider Obama’s decision here. It’s the beginning of his term (probably his only term at that). He bails out Chrysler, but doesn’t insist on any meaningful (i.e., anti-UAW) reform in company operations. In the next four years, the Messiah will now face one of two alternatives: 1) either continue pouring taxpayers’ money into the sieve that is Chrysler, or 2) personally cut Chrysler’s air hose after pissing away billions of taxpayers’ dollars.
This is the policy of a “brilliant” man? It bears a striking resemblance to the policy of a nitwit, if you ask me. One of my favorite aphorisms: the wise man does immediately what the fool does eventually. In this case, that would be pull the plug on Chrysler, as currently constituted, and do it now.
Occam’s Beard: Well said. Are you sleeping well?
JThoits, as well as one could hope. Brutal workouts and Scotch help…/g
JThoits, as well as one could hope. Brutal workouts and Scotch help…/g
Hey, that’s what I do.
Occam’s Beard:
I have been partial to Chardonnay lately. Need to work on the brutal workouts. Probably would help.
Funny story: my husband found my stash of canned goods that I bought with my Cosco refund. Just a bunch of canned goods we use frequently. He is not as worried as me…just a hard working guy with his head in the optimist sand. Was very concerned that I had been stocking up to prepare for world financial market meltdown. But maybe…….
(accidentally deleted)
My man!
Occam’s Beard,
Let me add my praise to some very well written responses. Also some of the clearer explanations of the situation Chrysler is presently in.
Unfortunately folks like copithorne can only parrot ‘talking points’ and fail to see that the dangerous precedent here, which is Obama’s negating of the law, for political purposes. Or else he’s just trolling.
As always, when confronted with facts that counter their assertions, the fall back is ad hominem attacks.
The administration’s motives have not one iota of concern for the ‘workers.’ Their only concern is with political power. This is nothing more than a payback to a powerful union’s support. As will be the so called “employee free choice act.”
copithorne Says:
“No wonder the Republican Party is as popular as it is now. With a platform like that, people will flock to the banner.”
Michigan is a one party state and they (the workers / unions) created a hostile environment for business and put their employer/s out of business. How sorry should we be for them for making [unreasonably] great salaries with great benefits and then asking us to bail them out? booo hoo… Anyway, go back to point A above / its a one party state. They’d never not vote dem anyway. Good times or bad.
“And strcpy I struggle to understand what you are saying. Chrysler did file for Chapter 11 bankruptcy. That’s where they are now.”
Chrysler is not in a real chapter 11, because of Obama and their own greed they chose to do something else. Normally when one files chapter 11 you get to do a real restructuring – that would include dropping many of the things Obama is requiring them to do.
As such they are in a position of a longer crawl to true insolvency or liquidating their assets. In this case it will more than likely not even be a true liquidation as someone else will swallow them up and do the restructuring that *should* have occured under chapter 11.
However, Obama is trying everything he can to stop that from occurring. You can insert your reason why, I do not think there is any one single reason and many good ones are given here.
I can’t truly blame Obama for this either – he was fairly up front about it and they simply figured he wasn’t telling the truth. I also do not think it will have near as far reaching consequences as many think either – I think more companies will simply shy away from the bail-out money and choose to make a go for it. There are creditors there that I do feel sorry for, that didn’t want any of this to occur, but for the most part they dug their bed. The part I am mostly irritated over is its our tax dollars at work, it never should have gotten to this point. I also find it amusing how many of these were Obama supporters and are, as the phrase goes, being mugged by reality.
If it goes through I will also laugh (and in this case truly laugh out loud) the first time the union members go to get concessions from the AUW and find out how much they truly are out for the worker 🙂
And lastly, to go with the quote “No wonder the Republican Party is as popular as it is now. With a platform like that, people will flock to the banner.”. Sadly there is another quote that is 100% applicable to that one: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on, the majority always votes for the candidate promising the most benefits from the Public Treasury with the result that a democracy always collapses over loose fiscal policy always followed by dictatorship.”
Yup, pretty much – I think we have nearly crossed into that line whole heartedly. My main hope is that they try too much too fast and some third party can come about (or, about the time hell freezes over, Republicans take their thumbs out of their rectum and do what is right).
“Putting creditors at the back of the queue in a Chrysler bankruptcy — when the lending agreements called for them to be at the head of the queue — is just wrong”.
Exactly. Sanctity of contracts is one of the major reasons that the U.S.–and the Western world writ large–developed over several centuries the economic might that they did. In places where contracts are subject to the whims of governments or powerful individuals, economic growth over time tends to be erratic and uneven. Where contracts can be relied upon by all parties to it, there’s more confidence in taking risks. (For a good overview of the importance of contracts to economic development and a comparison of how they work in the West versus the rest of the world, read the works of Hernando de Soto). That’s what this is about. The particulars of Chrysler matter less than the long-term ramifications of government’s unilateral abrogation of a valid contract to which it is not a party. I’ve lived in the U.S., Australia, and other developed countries where contracts are routinely honored. And I’ve lived in the Third World, where they often aren’t. In fact, I live there now. Trust me, no American, Republican, Democrat, Independent or Other, should want our government to adopt the Third-World habit of violating contracts. The potential impact on our economy would be devastating.
We have elected a man who doesn’t get America; not its laws, not its economic system, not its values. Unfortunately, plenty of Americans don’t get their country either. As somebody said above, the people here are the crackpot fringe.
Will people eventually wise up about our gangsta in chief? One sign to look for is whether anybody buys his cars. Or perhaps that’s old-timey thinking: Let’s give all those visionary green cars rolling off the lines to the poor! Happy unions, check. Happy plantation-voters, check. Happy Sierra Club, check.
I pretty much think the American experiment is concluded. Rational and prudent self-government is too difficult for human nature to handle. Sooner or later we hand over our liberty to a Dear Leader. This one seems a charming sort–Stalin held that mask well too. So maybe we can look forward to huge parades every Earth Day where formations of state-of-the-art environmentally correct unicycles and solar-powered skateboards pass the reviewing stand.
Well, the bad news is that Obama got a good bump in the Rasmussen polls this week.
We’ve seen this before. People seem to like it when Obama bitch slaps executives and money men.
Occam — Great posts!
I think it was walking with Michelle on their date.
God helps us.
Thanks to all for the kind comments upthread. I appreciate them. The muse was bellowing in my ear because I’m very concerned about the long-term implications of Obama’s actions.
Here’s my conjecture: America succeeded in large part because it was populated by the Europeans (and to a lesser extent, Asians) who had enough oomph to upstakes and emigrate to here. That decantation tended to select for the most able, the most ambitious, the most adventurous, and the most industrious (along with a smaller proportion of the worst, who were being run off), all of whom were frustrated by the sclerosis of their native countries. Losers stayed home with the aristocrats; winners split.
Now, however, many generations later, the population has regressed to the mean. (Much like the original population of Australia, originally heavily male because of the convict population, is once again 50/50.) That means that we have regenerated the left half of the bell curve for the traits listed above, and we now have our full complement of home-grown losers (fifty-two percent of the population, to be precise) who are too weak and stupid to see what needs to be done and then do it, especially if it’s unpleasant.
Instead they see life in soft focus, as though they are living in a Disney movie where the lions and gazelles are best buddies, totally unaware of reality (that lions typically seize smaller prey by the throat, or attack larger, more dangerous prey by ripping out their entrails). They think that by pretending things are different than the way they are, they can make it so, and that there will be no unpleasantness, no sorrow, no suffering — those only exist because those evil grownups create them. Once we dispense with grownup policies, those grownup ailments will be banished.
To return to the original topic after this long digression (for which I apologize), magical thinkers believe that pretending that Chrysler is a viable entity will make it so. It is profoundly irrational, because we already have data speaking to this question: Chrysler has been on death watch for years, long before this financial crisis hit. They were in trouble in boom times. Since the company will be essentially unchanged, why should its fortunes in 2010 or 2011 be any different than those in 2000 or 2001? Repeating the identical experiment and expecting different outcomes is the height of irrationality. All Obama is doing is wasting taxpayers’ money, and undermining aspects of contract law critical to a sound economy, to butter the bread of political cronies. Apart from that, it’s a wise decision.
If some Mafia Don and his crew, all full of bluster and menace, had walked into a Chrysler board meeting and told the board members that, henceforward, their company was his company, stock and bond holder’s investments and interests no longer mattered, that if they made any objections “bad things” would happen to them, and that he was going to put one of his under bosses i.e. the union–in charge, the Feds would be all over this, but that is basically what Obama, his financial thugs and the UAW just did.
What this means for investors is that they can no longer trust that their investments are safe, that, as demonstrated by the facts on the ground, contract, financial and bankruptcy law has been negated and no longer gives them any real protection, because Obama & Co. have very concretely shown that they can and will ignore the law, nationalize any industry, fire any chief executive, effectively loot any business at will, and give that business to whoever they want, all in the name of fixing our “economic emergency”; this is Economic Fascism at work.
If I were an investor, I would yank my money out of the market, invest overseas, buy gold or some other investment vehicle less likely to be within Obama’s reach. I would certainly not buy the heretofore rock-sold Treasuries–because who knows when Obama & Co., in their efforts to destroy evil old Capitalism and usher in Socialism–might decide that in this “economic emergency” the U.S., mired in the astronomical debt that they have just created, just has to decrease the stated interest rate on its financial obligations, or even default in order to survive.
I’d adopt whatever strategy their was avaialble to preserve my money, not investing another penny of my money in stocks or bonds until Obama & Co. are gone and the rule of law is restored, if that will even be fully possible after Obama and his wrecking crew are done with the economy and our country.
Someone made a comment on the web recently that they could not understand how Obama–trained in the law–could possibly be unaware of the law, or go against it. My response is that Obama trained in the law so as to understand how best to get around it and effectively destroy it.
Wolla Dalbo: Speaking of Chrysler and Mafia Dons and crew—have you seen this?
The Most important challenge GM faces is to win back the trust of the tax payers. Giving away billions of tax payer money is not going to go under good sights of the consumers