GM and Chrysler

I agree.

The Obama administration has possibly done incredible harm to one of the key fundamentals of a market economy with this move. I’m really not too sure I’m a fan. Is it the lesser of two evils? Who knows.

So? The alternative is Michigan melting down.

Let’s eliminate the rights from a minority because we want to save Michigan.

It’s still going to meltdown. And a lot of people are now recalling a certain line from Empire Strikes Back.

It has nothing to do with Michigan. It’s not about letting the car companies fold or not, or protecting the workers and saving jobs. The government is controlling this process no matter what; if Chrysler or GM goes into bankruptsy, the government will be underwriting the bankruptsy. They just used the deadline and the threat of bankruptsy to get consessions from the union.

What it seems to be about is the credit default swaps, and protecting the big banks from having to pay up on the CDSs they sold. Which I personally don’t put as high a priority on as the former Goldman employees at the Fed and Treasury.

Oh, now bankruptcy claims are a right?

…which would tank the economy, no? We’re having enough banking system troubles.

“This bucket of bolts is never gonna get us past that blockade?”

Um, yes, that’s kind of how bankruptcy law works…

Big difference between a financial transaction and a right.

The right to be compensated for government takings is in the Constitution.

5th Amendment, Property rights - Bankruptcy Legislation.

I voted for Obama, but saving hundred of thousands of jobs doesn’t warrant tossing away our constitution.

Sorry, bankruptcy is not a constitutional right. For all the bitching from conservatives about liberals calling things “rights” when they aren’t…

Just popping in here to say that I think saying “the rights [to something]” usually means more in a general sense than immediately pull out your pocket Constitution. Contractual claims probably would’ve been a better way to say it.

On the other hand, quicksave and DRM-free are definitely God-given rights.

It’s the opposite that people are claiming is a right. Because it is.

I grew up in Vermont, and if I remember Vermont law correctly, I’m pretty sure you are statutorily obligated to own a Subaru. Perhaps you fall under the Volvo/Saab exception?

Article on Ford CEO: http://money.cnn.com/2009/05/11/news/companies/mulally_ford.fortune/index.htm?section=money_autos

I thought they were doomed like the rest and just got lucky with their loan timing, but his plan to integrate American and European vehicles is interesting. Certainly the best chance of surviving but not exactly a sure thing.

Per MikeSofaer’s comment, what’s happening here is that the US Gov’t has defined the bankruptcy so that creditors are effectively losing their assets to the government without due compensation, which is not only the opposite from the way a managed bankruptcy usually works, but appears to be in violation of your constitutional right to be compensated.

The gov’t has effectively seized creditor assets under eminent domain without compensating them.

Interesting twist, I hadn’t thought of that angle. Are we sure the creditors would have been better off (all other parties interests aside) if GM had been allowed to fall into liquidation bankruptcy months ago? It’s hard to value the debt of a company teetering on the edge of implosion, so to make the claim that the government isn’t compensating them fairly with a fistful of GM shares you’ve got to examine just how much that debt is worth in a worst case scenario where the government hadn’t intervened to keep GM afloat.

We are talking about Chrysler where government is allowing a company to go bankrupt, then reform under a new name, purchasing all their previous asset for much lower value without any competition.

The problem with Chrysler – if I understand correctly and am correct – is that the creditors are getting paid last, instead of first, under this particular bankruptcy.

By the way, that article on Ford’s Mulally is interesting.