Tuesday, May 05, 2009

Understand The Meaning of The Chrysler Deal

Neal Boortz cuts through the BS...

"Thomas Lauria, a lawyer for top creditors, has officially filed a motion to stop the Chrysler bankruptcy. Lauria claims that the Obama administration has violated the Constitution by trying to devalue the senior creditors' holdings on behalf of junior creditors. What does Lauria base this on? Something called the 5th Amendment. Maybe you have heard of it. Just in case, here is a little reminder:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

But wait ... as they say ... there's more! Lauria, who represents the group referred to as the non-TARP lenders, is going to ask that the bankruptcy court keep the names of his client confidential. Why would that be? Because they have been receiving threats. You can bet that some of the threats are coming from union members. These union goons like the idea of their pension debts being given priority to Chrysler's secured lenders, and I think we all know what union goons do when something happens they don't like. There was a time not too long ago when the Bureau of Alcohol, Tobacco and Firearms noted that the number one illegal use of explosives in the United States came at the hands of union members engaged in work actions.

But there's another group threatening the secured non-TARP creditors. That would be the White House. Lauria and others have claimed that people within the Obama administration have made it clear that if any of these secured lenders get in the way of Obama's gift to the unions the White House will work to destroy their reputation. Now the White House denies this. What would you expect? But listen to the language ... Obama has attacked these people in public as being "vultures" and has painted them as evil capitalists who don't want to stand by the families of Chrysler workers. If he'll do this in public, what do you think his attack dogs will do in private?

Even if you think Obama hung the moon; even if you're now calling him the best president this country ever had; you just have to recognize the danger in the precedent that's been set here. The United Auto Workers are getting priority for their unsecured Chrysler debt simply because they are political powerful. Now just how is that going to work out for us in the future? Do you want to live in a financial world where lenders base lending decision in part on the political prominence of the borrower?

Giving unsecured creditors priority over secured lenders in bankruptcy proceedings .. now that's change you can believe in."

I await the outcry...the disgust...the revolt against Obama's blatant disregard for the rule of law.....I am not holding my breath.