Gangster Government & Crony Capitalism
Michael Barone, in the Detroit News, May 11, quoted bankruptcy lawyer Tom Lauria on a WJR talk show, "One of my clients," Lauria told host Frank Beckmann, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight."
“Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the President Barack Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.
“This, of course, is a violation of one of the basic principles of bankruptcy law, which is that secured creditors -- those who lent money only on the contractual promise that if the debt was unpaid they'd get specific property back -- get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.
“After that came a denunciation of the objecting bondholders as "speculators" by Obama in his press conference on Chrysler. And then death threats to bondholders from parties unknown [UAW thugs?].
“...The firm issued a statement saying it decided to accept the settlement, but it pointedly did not deny that it had been threatened by the White House. Which is to say, the threat worked.
“The same goes for big banks that have received billions in government TARP money. Many of them want to give back the money, but the government won't let them. They also voted to accept the Chrysler settlement. Nice little bank ya got there, wouldn't want anything to happen to it.
“...Lauria is a reputable lawyer and a contributor to Democratic candidates. He has no motive to lie. The White House does.
“Think carefully about what's happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, sought to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party.
“Obama's attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants "someone who understands justice is not just about some abstract legal theory," he said, but someone who has "empathy." In other words, judges should decide cases so the right people win, not according to the rule of law.
“...The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism [I noted other favors given unions by Obama in my March 30 post] and crony capitalism.
“There's a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of "Gangster Government." It is likely to be part of a continuing series.
So much for capitalism. In an interview on the Dennis Prager show May 7, Barone noted that the secure bondholders ended up getting 28 cents on the dollar, vs the union nonsecure bondholders who got 82 cents on the dollar. This should make your blood boil, as it does mine & Dennis Prager’s. Obama is certainly living up to his statement to Joe the Plumber. I suspect the Obama administration’s “Prince of Darkness” (Rahm Emanuel) is behind these threats, as he was behind the orchestrated attack on Rush Limbaugh’s reputation (my March 9 post). And he is certainly living up to his credo of not letting a crisis go to waste, but taking full advantage to implement their socialistic vision. I also note a distressing similarity in the cronyism with the FDR era (my Feb. 22 post).
“Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the President Barack Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.
“This, of course, is a violation of one of the basic principles of bankruptcy law, which is that secured creditors -- those who lent money only on the contractual promise that if the debt was unpaid they'd get specific property back -- get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.
“After that came a denunciation of the objecting bondholders as "speculators" by Obama in his press conference on Chrysler. And then death threats to bondholders from parties unknown [UAW thugs?].
“...The firm issued a statement saying it decided to accept the settlement, but it pointedly did not deny that it had been threatened by the White House. Which is to say, the threat worked.
“The same goes for big banks that have received billions in government TARP money. Many of them want to give back the money, but the government won't let them. They also voted to accept the Chrysler settlement. Nice little bank ya got there, wouldn't want anything to happen to it.
“...Lauria is a reputable lawyer and a contributor to Democratic candidates. He has no motive to lie. The White House does.
“Think carefully about what's happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, sought to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party.
“Obama's attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants "someone who understands justice is not just about some abstract legal theory," he said, but someone who has "empathy." In other words, judges should decide cases so the right people win, not according to the rule of law.
“...The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism [I noted other favors given unions by Obama in my March 30 post] and crony capitalism.
“There's a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of "Gangster Government." It is likely to be part of a continuing series.
So much for capitalism. In an interview on the Dennis Prager show May 7, Barone noted that the secure bondholders ended up getting 28 cents on the dollar, vs the union nonsecure bondholders who got 82 cents on the dollar. This should make your blood boil, as it does mine & Dennis Prager’s. Obama is certainly living up to his statement to Joe the Plumber. I suspect the Obama administration’s “Prince of Darkness” (Rahm Emanuel) is behind these threats, as he was behind the orchestrated attack on Rush Limbaugh’s reputation (my March 9 post). And he is certainly living up to his credo of not letting a crisis go to waste, but taking full advantage to implement their socialistic vision. I also note a distressing similarity in the cronyism with the FDR era (my Feb. 22 post).
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