Comments on: The End of Capitalism as We Know It

By: Masson’s Blog - A Citizen’s Guide to Indiana » Indiana and the Chrysler Bankruptcy

Wed, 03 Jun 2009 17:52:57 +0000

[...] Indiana and the Chrysler Bankruptcy By Doug Some of my fellow Hoosier bloggers (h/t Abdul and Josh Claybourn) have been following the Chrysler bankruptcy, particularly with respect to Indiana’s unexpectedly prominent role in the matter. Josh, in particular, has strong feelings on the issue, calling the proposed reorganization (presumably with some degree of hyperbole “The End of Capitalism as We Know It.”) [...]

By: A Big Win for Indiana - In The Agora

A Big Win for Indiana - In The Agora — Wed, 03 Jun 2009 14:19:05 +0000

[...] week in a post titled “The End of Capitalism as We Know It,” I wrote about Chrysler’s bankruptcy and its implications for the rule of law and our [...]

By: Cory

Cory — Wed, 27 May 2009 12:07:53 +0000

One could say that our economic system is a by product of our legal system.

If the legal system is fundamentally changed (contract law) at the whim of any branch of the government, the division of labor which we depend upon for our entire economic well being is affected.

Most notably the US has always been a safe haven for capital. This may not continue to the be the case with more actions such as the one just taken by the Obama Administration in the case of Chrysler.

Also I doubt very much that Chrysler will be able to raise further capital from the markets based on this precedent or as previously mentioned they will pay a premium for such debt.

Also if this had just been handed over to the bankruptcy courts this matter would have been handled differently and perhaps the company would have been able to finally start fresh without the UAW contracts and start competing again instead of being hampered by union contracts which state details about every level of production that are so backward it boggles the mind the company has even made it this far.

Cory

By: Blagnet.net » The Chrysler takeover and the rule of law

Blagnet.net » The Chrysler takeover and the rule of law — Tue, 26 May 2009 03:34:44 +0000

[...] Joshua Claybourn summarizes why the Obama regime’s management of the Chrysler bankruptcy is wo… It violates the most important aspects of a sound legal system: the sanctity of contracts and the rule of law. Under these long standing bankruptcy laws – enacted and enforced by the federal government under the Constitution&38212a secured creditor is entitled to first priority under the “absolute priority rule.” Other nonsecured creditors have “junior” priority. The purpose of this rule should seem clear. When you offer credit to some one or some thing, and do so on the condition that it is secured by an asset, you should be first in line to collect before those providing credit without such security. Unfortunately President Obama’s actions throughout the Chrysler bankruptcy have trampled over these well worn bankruptcy laws, contract rights, and even the rule of law. [...]

By: uncle jim

uncle jim — Fri, 22 May 2009 19:21:45 +0000

In other words, Justice will no longer be “blind”?

Will we have to remove the blindfolds and scales from all the statues, etc of Lady Justice?

Sad, sad, sad.

Of course, most Americans have no clue what the constitution is, much less what it says about justice or about the powers and duties of the Chief Executive.

By: Spartan

Spartan — Fri, 22 May 2009 16:40:10 +0000

Doesn’t the fact that the federal govt gave Chrysler billions in bailout money change the equation at all? I understand and agree with the concerns the post raises, but is it really legitimate to say that the govt can give them this amount of money but has no say in how it is used? It’s not like this is a good investment on our govt’s part and ‘bailout’ is probably a more accurate term. Is the issue that since this is an unusual situation and there are no laws specifically addressing it then we should default to the existing bankruptcy laws? Or am I just way offbase, which is probable, in mistakenly thinking that the assets that are being fought over is partly the money handed out by the govt?

By: The Plundering Continues - In The Agora

The Plundering Continues - In The Agora — Fri, 22 May 2009 16:14:52 +0000

[...] I’ve alluded to already, the ramifications of these lawless policies are enormous, but one short term consequence is that investors will refuse to invest in companies owned (in [...]

By: The Agitator » Blog Archive » Morning-ish Links

The Agitator » Blog Archive » Morning-ish Links — Fri, 22 May 2009 15:37:16 +0000

[...] Joshua Claybourn summarizes why the Chrysler deal brokered by the Obama administration is much, much scarier than you think. (Link fixed!) [...]

By: The Agitator » Blog Archive » Morning-ish Links

The Agitator » Blog Archive » Morning-ish Links — Fri, 22 May 2009 15:37:15 +0000

[...] Joshua Claybourn summarizes why the Chrysler deal brokered by the Obama administration is much, much scarier than you think. (Link fixed!) [...]

By: Jerry Doodle

Jerry Doodle — Fri, 22 May 2009 15:21:14 +0000

Then take it up with the Bankruptcy Litigation Blog that Josh linked to, Paul:

When does the “absolute priority rule” (compare FRB-Cleveland’s strict construction of the rule back in 1996 here with the Administration’s position today), which establishes a hierarchy of recovery rights among creditor classes, take a back seat to the “fresh start,” rehabilitative policy of chapter 11?

I’m not a lawyer, so I’m at a bit of a disadvantage here. My understanding is that lawyers for the Indiana pension funds have mounted a legal challenge claiming, as Josh has written here, that the government has exceeded its authority and is using the bankruptcy process to advance its own agenda, and that the District Court will take the issue up some time next week. If lawyers for the Indiana pension funds are correct, I would expect that would be reflected in the judgement in District Court.