Business Insider reports that more than one Chrysler senior creditor has corroborated Thomas Lauria’s allegation that the Obama administration threatened them with public attacks if they didn’t surrender their contractual rights. One of their sources says that the Obama team comprises some of the worst “ends justify the means” people he’s ever encountered ...
...One participant in negotiations said that the administration’s tactic was to present what one described as a “madman theory of the presidency” in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm.
Well, that’s certainly reassuring. The man at the helm during one of the biggest economic crises in decades is a madman who will act in an unpredictable and irrational manner if he doesn’t get his way. It sounds like they paint Obama as either a lunatic or a petulant child....(more)
More on this from Business Insider:
The President and his team sought to avoid having Chrysler go through this process, proposing their own plan for re-organizing the company and partially paying off Chrysler’s creditors. Some bond holders thought this plan unfair. Specifically, they thought it unfairly favored the United Auto Workers, and unfairly paid bondholders less than they would get in bankruptcy court. So, they said no to the plan and decided, as is their right, to take their chances in the bankruptcy process. But, as his quotes above show, the President thought they were being unpatriotic or worse.
Let’s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients’ money to share in the “sacrifice”, they are stealing. Clients of hedge funds include, among others, pension funds of all kinds of workers, unionized and not. The managers have a fiduciary obligation to look after their clients’ money as best they can, not to support the President, nor to oppose him, nor otherwise advance their personal political views. That’s how the system works. If you hired an investment professional and he could preserve more of your money in a financial disaster, but instead he decided to spend it on the UAW so you could “share in the sacrifice”, you would not be happy.
Let’s quickly review a few side issues.
The President's attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. Why is he not calling on his party to "sacrifice" some campaign contributions, and votes, for the greater good? Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power.(more)
Finally from Bloomberg:
...Writers who are not pro-Barack Obama are suffering character assassination as well. George Will of the Washington Post, the nation’s senior conservative columnist, has been so assaulted by bloggers that his editor, Fred Hiatt, recently wrote, “I would think folks would be eager to engage in the debate, given how sure they are of their case, rather than trying to shut him down.”
The disconcerting thing isn’t that the bloggers or their guests did this slamming. We’re used to such vitriol in campaign time. What is surprising is that the attacks are continuing after an election.
In the past, politicians and policy thinkers tended to be magnanimous in victory. They and their friends focused, post- victory, on policy and strategy -- not on trashing individuals.
It ought to be especially true this time, given what wonders are befalling the Democrats. Between Arlen Specter in Pennsylvania and Al Franken in Minnesota, it looks like the Democrats are in the process of making their Senate majority filibuster-proof. Then there’s the president’s new opportunity to mold the Supreme Court, with the resignation of David Souter.
Still, somehow, the magnanimity isn’t there. Indeed, the closer the Democrats get to total power, the nastier the commentators friendly to them have become. (more)