Chrysler as an Agent of Socialism.

by Little Miss Attila on May 2, 2009

What’s especially whack about the games Obama is playing with Chrysler (and GM, to some extent) is that the very people who are most likely to want to “buy American” if they possibly can are those who are most likely to be turned off by the Federal government seizing control of private concerns.

Joyner (I’m quoting extensively, here: I’m in a hurry):

King Banian persuasively argues that this statement by President Obama on Chrysler’s bankruptcy was “utterly contemptible.”

While many stakeholders made sacrifices and worked constructively, I have to tell you some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none. Some demanded twice the return that other lenders were getting. I don’t stand with them. I stand with Chrysler’s employees and their families and communities. I stand with Chrysler’s management, its dealers and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don’t stand with those who held out when everybody else is making sacrifices. And that’s why I’m supporting Chrysler’s plans to use our bankruptcy laws to clear away its remaining obligations so the company can get back on its feet and onto a path of success.

King points out that the holdouts that Obama was excoriating include Yale University’s endowment, the University of Kentucky’s endowment, and the Bill and Melinda Gates Foundation. Their crime? Investing in Chrysler when no one else would and insisting that they be treated as senior creditors under existing bankruptcy law.

They did so under the expectation that the rule of law would apply in America, that their place in line under bankruptcy law was purchased with that debt. President Obama’s ire over their unwillingness to give away that place in line — a place purchased by those endowments and foundations and pensions not for themselves but for students, pensioners and grant recipients — is an indication that the president thinks his noble ends are superior to theirs.

He points to a WSJ editorial arguing that “bankruptcy court, and not the political arena, is where Chrysler belongs.”

It’s especially rich for Mr. Obama to blast the creditors for seeking “an unjustified taxpayer-funded bailout” while offering the UAW a 55% majority stake in Chrysler. He also praised the large banks that hold most of the Chrysler debt and supported the government plan. But of course J.P. Morgan and the other big banks are also recipients of billions of dollars in taxpayer cash and have a strong interest in playing nice with their creditor, Uncle Sam Obama.

The Chrysler creditors at least represent teachers, pensioners and retirees, among others. The Administration is advancing its own social and political agenda through its ever-deeper entanglement with Chrysler and General Motors. That explains why the government is giving 55% of the new Chrysler to the UAW’s retiree-benefit trust, a junior creditor, while those ahead of the trust in line get a mere 30 cents on the dollar.

One hopes the bankruptcy judges follow the law rather than giving in to this nonsense.

Drew M., writing at Ace of Spades HQ, points out that at least one of Chrysler’s senior creditors was threatened with retaliation by the White House Press Corps and declares:

First, the administration is making Nixon look like Mr. Rogers when it comes to dealing with its enemies.

Second, the supposed White House press corps seems to be considered an adjunct arm of the administration. They’ve gone from the Enchanted Media ™ to The Enforcers in record time.

If movie were made about this administration, it would lack verisimillitude.

{ 1 comment… read it below or add one }

Richard Borys May 2, 2009 at 4:44 pm

I just thought of a solution, or resolve! A lightbulb, just went off in my head. You’re right to expect a punchline.

We’ve had the Chrysler Bailout (=rescue) in 1979. That worked didn’t it (see footnote) ?

Recently, the bailout of banks and others (e.g., AIG).

Stay with me!

Now Chrysler is going to bankruptcy (“BK”) court to get permission to reorganize.
When you read this, you’ll ask “why didn’t I think of that:” Let’s have a Corporate Bailout Court System. Da Da.

Footnote: Chrysler did pay back the US Treasury in 1983, 7 years early, or before it had to. It got a lot of good press for that; however, what you might not know, while it was in hock to the US, it was restricted in many activities. This, such that it’s rescue plan was like BK , in that, while in BK a company can’t do things like..hmm.. use corporate jets, and go to excesses in other ways. Some have asseted that Chrysler paid the US back faster so it could resume corporate jetting, etc.

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