Next thing you know, Obama will dictate that they build an affordable car for everyone, and they will call it, 'The People's Car.'
Posted on 05/01/2009 9:08:34 AM PDT by curiosity
Obama’s first 100 days have occasioned a number of dispiriting moments, but yesterday’s attack on Chrysler’s bondholders represented a new low. In a speech announcing the company’s bankruptcy filing, President Obama blasted “a group of investment firms and hedge funds [that] decided to hold out for the prospect of an unjustified taxpayer-funded bailout.” That is nothing short of a lie. The consortium wasn’t holding out for a bailout. It was holding out for a bankruptcy.
The administration tried desperately to keep Chrysler out of bankruptcy court; in the process, it demonstrated exactly why that institution is so valuable. Obama’s auto task force attempted to browbeat Chrysler’s creditors into taking a terrible deal in order to spare the United Auto Workers union as much pain as possible. The large banks, which owe their continued existence to the $700 billion Troubled Asset Relief Program (TARP), caved and agreed to take a massive haircut on their secured Chrysler debt. But a group of smaller firms, calling themselves “The Committee of Chrysler Non-TARP lenders,” refused to play ball.
In a statement released yesterday, the firms pointed out that they would be shirking their fiduciary duty to their investors if they did not hold out for the best possible deal. For them, the best deal is bankruptcy. In bankruptcy court, secured debtholders take priority over other creditors. The administration’s plan called for secured lenders to get in line behind the UAW. For resisting this expropriation and following the law, the non-TARP lenders were publicly denounced as vicious Benedict Arnolds by a sitting American president. “I stand with Chrysler’s employees and their families and communities,” Obama said — not “those who held out when everybody else is making sacrifices.” He stands, he said, “with the millions of Americans who own and want to buy Chrysler cars.” If millions of Americans wanted to buy Chrysler cars, the company wouldn’t need the president of the United States to be its pitchman.
Liberals took their cue from the president and immediately denounced the holdouts as “vultures,” too consumed with greed to think of the national interest. But the law compels these firms to act in their shareholders’ interest. Bank of America’s Ken Lewis ignored this responsibility and paid the price. Henry Paulson and Ben Bernanke all but forced Lewis to go ahead with the acquisition of Merrill Lynch even after he learned that the firm was in deep trouble. Lewis finally broke his silence this month, and Bank of America’s shareholders promptly stripped him of his chairmanship.
There is also a double standard at work. The rule of law was extremely important to these industrial-policy Jacobins when the telecoms were in the dock for cooperating with the Bush administration’s terrorist surveillance program. They wrongly argued that the telecoms broke the law, and they weren't impressed by arguments that the program had yielded valuable intelligence. Apparently, the law is more flexible when bending it might yield a marginally better economic outcome for an interest group that worked very hard to get the president elected. National interest, indeed.
From the beginning, we’ve argued that GM and Chrysler should land in bankruptcy court. Instead, the Bush administration gave them a temporary crutch and sent them hobbling into the Obama administration. With their powerful unions and poor prospects, the automakers posed a thorny problem for Obama; he solved it by making the bondholders an offer they had to refuse. Now Obama has his scapegoat, and investors have another reason to mistrust the U.S. as a destination for capital.
The law is for thee, not for me - typical ‘rat approach to life.
I do not own a Chrysler car, and I will never own one. If I won one in a raffle, I'd sell it immediately or give it to charity. I will not through my actions imply that I approve of the massive theft of taxpayer dollars to bail out a private company or to bail out the union that bankrupted that company.
It may cost an extra trillion in taxpayer dollars before Obama and Pelosi accept reality, but Chrysler is going to die (GM too). Ford is still on my list of companies I'll deal with, but that will change if they take bailout money.
Obama and the UAW may try to fight the global free market but he will lose and drag America down with him.
Chrysler and GM will never make it. I will not buy one.
These actions will drive capital away from America. See Argentina, Zimbabwe and other places where capital flees or avoids countries.
The lawyer (Lauria) for the bondholders was on WJR this morning. He said that Pirella Weinberg dropped out of the lawsuit because they have received threats from the WH to trash them in the media. Trying to find verification on the net.
Liberals took their cue from the president and immediately denounced the holdouts as “vultures,” too consumed with greed to think of the national interest.
bambi, believe me, no one would touch a stinkin Chrysler right now. you have made it a welfare car
Wait until the dealers who gey forced out find foreign manufacturers to sell. Tata or Chery come to mind.
There are some smaller makers of trucks around the world who might want some of that action, too.
My brother owns a Breeze, which gets worse mileage than my Lincoln Town car.
I've owned 5 or 6 Crysler products in my lifefime, also couple of GM products. Never again for either Mfg. Let the cars rust on the lot.
And there you have the other side of the story. Sorry to say though, that the Obama followers will not understand this, and hear his empty rhetoric.
Until fearless journalists stand up and ask the tough questions this guy will continue to get a pass....
Our 12 year old Dodge van in the driveway is the last Chrysler vehicle we’ll ever own. Here’s hoping we’ll be able to get the parts for it until it’s time for the scrap heap. It’s a good runner, and we normally keep cars until the wheels fall off. What a mess.
I believe the term is "Fascism", not "Socialism". In a socialist economy, there AREN'T any private businesses to meddle with; they're all owned by the government.
It's right there for all to see but still many refuse to see it.
Now that Obama is railing against the speculators for interfering with his New Economic Program, I am waiting for him to start attacking the Kulaks.
Next thing you know, Obama will dictate that they build an affordable car for everyone, and they will call it, 'The People's Car.'
Good point!
People are simply not going to buy GM or Chrysler cars. This administration can go pound sand. They CANNOT force you do anything folks, people will just buy used cars from private sellers which is what I’m going to do.
My first car boat after I got married was a Mercury Cougar. The car virtually fell apart when it approached 60,000 miles. It had minor flaws right out of the gate...The Service dept never seemed to repair things right, and after the warranty was up I had it serviced at local shops. It was 1978.
I vowed never to buy an American car again, and I haven’t.
I started by buying second hand Mercedes 18 to 20 months old still under warranty. I quickly learned what the word Automotive Service really mean’t. The Mercedes delearship was like a breath of fresh air.
I didn’t know that there were dealerships out there that “picked up your car for servicing, or drove you to your job when you dropped it off.”
When it came time to trade the car in “just before the warranty was up”... guess what happened? The car retained almost it’s entire purchase price.
Since then, I’ve bought nothing but Lexus and in the same fashion. I’ve never been disappointed. NEVER.
I advise young people starting out, to find a high mileage one owner Lexus or Mercedes and pay cash for it, or put down as much as you can. You’ll have a car that is tens times better than anything new, will still look great and not American made, and the car will last you well into 200,000 miles and beyond. By then, if you’ve saved and are in a better paying job, you can afford a used but warranted one.
nikos
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