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  • Meddling with Unacceptable Speculators

    “I want to disabuse people of this notion that somehow we enjoy, you know, meddling in the private sector.”President Barack Obama, April 29, 2009

    “After consulting with my auto task force, industry experts, and financial advisors, I decided to give Chrysler and Fiat 30 days to reach an agreement. The standard I set was high: I challenged them to design a plan that would protect American jobs, American taxpayers, and the future of a great American car company.”President Barack Obama, April 30, 2009

    It is quite audacious of President Obama to declare he does not enjoy meddling in the private sector one day, and then boast about personally saving “a great American car company” the next. But Obama did not stop there. He then went on to question the patriotism of those “speculators” who defied White House management of the auto industry:

    Now, 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.

    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. … it was unacceptable to let a small group of speculators endanger Chrysler’s future by refusing to sacrifice like everyone else.

    The most galling part of this statement, is Obama’s claim that it was the rebellious investors who wanted a taxpayer bailout. The only reason the investors that held out could hold out is because they were the only ones at the table who were not at the government trough. These investors underscored that point when they released a letter titled “Statement From Non-Tarp Lenders of Chrysler” reading in part:

    [W]e represent many of the country’s teachers unions, major pension and retirement plans and school endowments who have invested through us in senior secured loans to Chrysler. Combined, these loans total about $1 billion. None of us have taken a dime in TARP money.

    [T]o facilitate Chrysler’s rehabilitation, we offered to take a 40% haircut even though some groups lower down in the legal priority chain in Chrysler debt were being given recoveries of up to 50% or more and being allowed to take out billions of dollars. In contrast, over at General Motors, senior secured lenders are being left unimpaired with 100% recoveries, while even GM’s unsecured bondholders are receiving a far better recovery than we are as Chrysler’s first lien secured lenders.

    We have a fiduciary responsibility to all those teachers, pensioners, retirees and others who have entrusted their money to us. We are legally bound to protect their interests. Much as we empathize with Chrysler’s other stakeholders, the capital is just not ours to contribute to their cause by accepting a deal that is outside the well established legal framework and cannot be rationalized as being commercially reasonable.

    As we all appreciate, laws are the foundation of our economy and society. Despite recent travails, our country remains the economic envy of the world and the United States remains a vital engine of global growth. The rule of law made it that way. We urge that people remember this and not succumb to unproductive and unwarranted finger pointing.

    Posted in Economics [slideshow_deploy]

    16 Responses to Meddling with Unacceptable Speculators

    1. MAS1916 - Denver, CO says:

      The single most significant lie of Obama's Wednesday Press Conference was the note about not enjoying meddling.

      Liberals absolutely LOVE meddling in the private sector – especially when they can extort money or cause people to alter their behavior. Democrats live for these opportunities.

      Intervention at Chrysler and GM was a payback to the UAW. In bankuptcy, the UAW would have its contracts reworked. Obama and labor certainly didn't want that, so they invested a ton in an intervention action that will have zero impact. Chrysler is bankrupt anyway. At least now an experienced bankruptcy court is going to make the changes necessary and not the Obama administration. Chrysler now at least has a shot at recovery.

      All conservatives though, are still smoldering over the President's comment that He doesn't enjoy meddling. It was the single most outrageous lie of the evening and it went completely unchallenged by the lap dog media present.

      Ahh.. for a lighter look at the press conference 'highlights' you might hit:
      http://firstconservative.com/blog/top-ten/obamas-

    2. Steve -- Fort Myers, says:

      Americans continue to be sidetracked by our leadership. The concept of "too big to fail' is simply the ultimate quid pro quo for the corrupt government – bisiness alliance. This applies to banks, financial interest, the auto industry or any other recipient of the taxpayers money!

      We should recognize that the blame lies with both the Republicans and Democrats who refuse to do the business of the people, choosing instead to align themselves with the deep pockets of the special interest groups.

      Americans need to wake up, seize contriol of the government, throw out the corrupted politicians and begin a new legacy of leadership where officials work for the American people and are held accountable for their nefarious actions.

    3. Jesse Forgione, NYC says:

      “We can’t go back to an economy that’s built on a pile of sand, on inflated home prices and maxed-out credit cards, on overleveraged banks and outdated regulations that allow recklessness of a few to threaten the prospects of all,”

      All to true. Unfortunately Obama doesn't realize the significance of his own words. His reckless and ill-informed trampling of property rights is the biggest threat to our prospects that we now face.

      If this government fails to reverse it's policy of interference and outright expropriation, these “unique circumstances” will not be temporary, but will continue to worsen.

      The idea that government can "help" the economy has many times been exploded by both reason and history.

      We are now witnessing the consequences of a central bank (the Fed) distorting the market, causing capital to be misdirected. The government is responding like they do to all the problems they cause to the market, by increasing the destructive interference, and blaming a lack of regulation.

      But it's no surprise that violating property rights is destructive to an economy based on property rights.

    4. Barb -mn says:

      "We have a fiduciary responsibility to all those teachers, pensioners, retirees and others who have entrusted their money to us. We are legally bound to protect their interests. Much as we empathize with Chrysler’s other stakeholders, the capital is just not ours to contribute to their cause by accepting a deal that is outside the well established legal framework and cannot be rationalized as being commercially reasonable."

      By your own admission, you protect GOVERNMENT. As you mention your heroism to stand by the employees of Chrysler is a bald face LIE. You're not standing by the employees, you're STANDING WITH UNIONS.

      Had government been doing their job to begin with, this wouldn't have effected any private sector business or the people that work for them! Everyday GOVERNMENT EFFORTS is making ALL matters worse for the private sector. Everything in the name of corruption is you, Mr. President.

      What well established legal framework, Mr. President? You set the unknowing private sector up and then use the well established framework to shut them down? Many Americans appreciate your well established illusions, Mr. President. NOT ALL.

    5. Reg USA says:

      How in the world can we throw out corrupt politicians when the likes of Charlie Rangle are given a life time committee chairmanship by Pelosi even though there is acknowledged proof of income tax fraud?

    6. Bob in St. Louis, Mi says:

      To Barb-mn: Bravo! About time somebody tell it like it is! The only thing Obama stands for and with is his overflated ego! He'll eventually throw them all (Chrysler) under the bus when he grabs all the power. This man is a narcistic, megolamaniac and he needs to be put in his place! He is showing his true colors now and his popularity polls are starting to wane because the american people are seeing just how diabolical him and his administration is! When all those people that voted for him discover that he's going to do to them what he's going to do to everyone involved with this Chrysler debacle, they will literally be marching in the streets to throw him and his administration out of office!! By the way, spread the word to your Senators to vote no on HR1913!! It puts the lid on free speech!!

    7. John - NJ says:

      Obama's anger at the bondholders is laughable. It's little more than a tantrum over someone telling him NO! I had similar issues with my children in their terrible 2's.

      so let's see…First, we cut a terrific deal with the union. Then we "convince" the TARP funded banks to go along with our plan. Finally, we try to strong arm secured lenders into giving up their legal rights.

      I sincerely hope the bankruptcy judge appointed to this case gives significant scrutiny to the "deals" Obama and his task force made. I also hope the press pays close attention to any attempt by Obama or his minions to influence the court in any way. His statement that he expects this to be handled in a couple of months gave me pause. I have never heard of a Chapter 11 filing for any entity, let alone one the size and complexity of Chrysler, being disposed of in 60-90 days.

      But, then again, the courts may not be aware of the power of community organizing.

    8. okiejim Oklahoma says:

      At what point do we say enough. The Obama administration will stop at nothing to get what they want,i.e., total control of the states, education, business and industry, medicine, retirements, and the people of this great country.

      Do I believe that certain people opposing Obama and his gang of thieves have received death threats? Absolutely. Perhaps not from the president himself, but from his staff, certainly. They are capable of doing and saying anything to get total control of this country.

      Finally, someone is calling Acorn to task. This is a step in the right direction. Now, lets watch as Obama's stooges try to make the state prosecutors that have filed charges against Acorn, appear to be the the bad guys.

    9. Trent, ND says:

      John, you are right, I have read and heard from experienced bankruptcy lawyers that this will take more than 2 years, not 60 days…just an example of another lie from the big "O".

    10. Dennis A. Social Cir says:

      Liberals owe the unions, obama has to pay them as they elected him. The people that backed Chrysler with their money will get nothing and the comment by obama is selfish and self centered. He is after only one thing and it is not the welfare of this country.

    11. gentile- Philadelphi says:

      I think this administration will turn out to be the "straw that broke the camel's back"…

      Remember Mr. President, if people continue loosing their jobs because of your meddling and constant backdoor attempts at trying to control the economy- they will have a lot of time on their hands to think…

      You know what happens when people who have a lot of "free" time on their hands start to think and actually rationalize, right??

    12. morstar150, Palm Bea says:

      I'm disgusted with this over-reaching Federal Government. When business fails they are rewarded with government handouts. If they invest they are ridiculed and reviled. Investors, in fact, are the only ones who sacrificed anything in the GM government takeover. The result was Obama's tax cheats turning the company over to the Union bosses while the investors were given 10 cents on the dollar. Komrads the workers are in control now!!!

    13. Ghost 1 Lakeside,CA says:

      Ever why when Obama was busy staying out of the auto business by firing CEO's he didn't firee the UAW Leadedr. Hard to believe there were/are people not working yeet drawing 70 -90 percent of their wages and full medical benefits. I'm also waiting to seehow the folks who elected him handle the tax increase he has in store. Lets crank up the cost Fed tax on gas I mean all those young folks not making $40K per year will just have to suck it in and have some kool-aid. I'm afraid wer'e just starting to see the light from the on coming train. Leets see some of it: Obama celebrates earth day by using 9,000 gallons of jet fuel to fly to Iowa, uses anothe 15,000 flying to Colorado to sign a bill and chastizes auto company execs. for using the company plane. Don't hear about all the trips Pelosi is taking to Calif. either, and the list goes on and on and on.

    14. Orville, Texas says:

      THE MAINSTREAM MEDIA DO NOT EVEN HAVE AN IDEA, WHO THEY ARE IN BED WITH, OR MAYBE THEY DO. THIS ADMINISTRATION JUST NEEDS TO START WEARING A MASK IF THEY ARE GOING TO ROB THE USA OF IT'S FREEDOMS AND HERITAGE. THE CONSTITUTION IS UNDER ATTACK AND THE MEDIA IS ASKING SOME REAL HARD QUESTIONS, HAR HAR HAR! LOOK BACK IN HISTORY PEOPLE, BEFORE ITS TO LATE FOR THE USA. HOW MANY THINGS HAVE DO BE DONE BY THIS ADMINISTRATION, THAT ARE NOT SUPPORTED BY THE CONSTITUTION….I AM CAN NOT EVEN BELIEVE THAT MOST OF THE DEMOCRATS ARE GOING ALONG WITH THIS, BEFORE SOME OF THE DEMOCRATS NEED TO WAKE UP, THIS RIDE IS NOT FREE. MAYBE IT TIME FOR GOOD AMERICANS LEAVE THIS COUNTRY, IT IS ALMOST TO THE POINT I CAN NOT AFFORD TO BE AN AMERICAN, FREE, BECAUSE ALL I WILL BE DOING IS WORKING TO SUPPORT THE GOVERNMENT AND THE NATION OF FREE LOADERS! BOY THAT'S A THOUGHT THE WORKING PEOPLE LEAVE AND DEAD BEATS AND LIBERALS WOULD HAVE TO GET JOBS. THANKS, FOR THIS OPPORTUNITY TO SPEAK, AT LEAST RIGHT NOW WE STILL HAVE THAT CONSTITUTIONAL RIGHT BUT BEWARE MEDIA YOUR RIGHTS ARE UNDER ATTACK TOO…..VERTAS

    15. JRT, Detroit, MI says:

      It is no doubt that the direction and goal of the current President is a power grab and entrenchment of future power for the Democrat (socialist) party. Either the socialist policies of this President will succeed and we will all be happy OR they will fail miserably and there will be a rejection of this socialist idea by the people of the United States of America. This overreach by the Democrats will probably be their demise until the people forget what happened. Socialism WILL Fail! Do not loose hope.

    16. Pingback: Morning Bell: The End of Federalism | The Foundry: Conservative Policy News.

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