Come for the Politics, Stay for the Pathologies

Wednesday, May 6, 2009

The Soprano’s of Pennsylvania Ave.

Michael Barone’s piece today in the Washington Examiner underscores the concerns many of us have with BHO’s apparent contempt for the law.

It’s not just that he waved aside the rights of Chrysler’s bond holders by offering them, the secured creditors, 33 cents on the dollar while giving the UAW, unsecured creditors, 55 cents on the dollar. No, it was the arrogance with which be brushed them aside with a dismissive, even derisive comment about them being greedy speculators, implying they had no business objecting to the Obama Grand Plan.

Barone points out that the attempt to subordinate the rights of the senior creditors …

… of course is a violation of one of the basic principles of bankruptcy law, which is that secured creditors — those who lended 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.

The White House denies using coercion tactics, but frankly it’s hard to dismiss that assertion for a number of reasons - starting with the fact that Tom Lauria is a highly respected attorney from a highly respected firm who has no reason to lie. The White House on the other hand has every reason to lie about using illegal tactics - known as standard operating procedures in the realm of Chicago politics.

Think carefully about what’s happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, is seeking 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. The only possible limit on the White House’s power is the bankruptcy judge, who might not go along.

The administration thugs are just getting warmed up for GM, and anyone else that was stupid enough to take TARP funds.

Barone exposes us to more “transformative” thinking:

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 that the right people win, not according to the rule of law.

At the risk of repeating myself from an earlier post, the judicial arm of government is about abstract legal theory. That’s all it’s about. If you don’t like the laws, that- theoretically – can be addressed through the legislative branch; but it decidedly falls outside the realm of the judicial.

Once the highest level of government begins to act in contempt of the law, you approach the Chinese model in which the rule of law is only the rule of law if they say it is. I wonder if the Chinese would have invested all those billions of dollars in US Treasuries if they ever thought the USA would treat their bondholders like, well, like the Chinese might treat theirs?

Update: Hot Air had a similar take.