Obama To Chrysler: I Will Make Them An Offer They Can’t Refuse

What would happen if one branch of the government tries to interfere in an area that is the province of another branch? In a normal world the interfering branch is slapped back; but this is not a normal world, this is Obamaland.

The interview below features attorney Tom Lauria detailing how the Executive Branch of the United States government is serving as the negotiator, arbitrator, and judge, in the dismantling of Chrysler. This is clearly a violation of the separation of powers, and a dishonest attempt by the Obama administration to reward those that supported him.

The Obama administration has gone so far as to change the “pecking order” on who will be receiving money that is owed to them, and how much these companies will receive. It appears that the Obama administration has determined that entities (such as the unions) that had a lower financial commitment within Chrysler have been moved to the top of the monetary heap, receiving a higher percentage than companies who had been keeping Chrysler afloat before the government stepped in.

Fasicism, socialism…tomato, toemoto…let’s call the whole thing off!

Zero Hedge summarizes and surmises (from hotair.com):

In an interview of momentous importance, WJR’s Frank Beckmann interviews Tom Lauria, the Head of Restructuring at top five law firm White & Case, in which the lawyer, who represents Chrysler hold-out hedge funds Stairway Capital and Oppenheimer Funds, discusses on the record the amazing treatment by the White House of Perella Weinberg, which initially had been a transaction hold out but after threats by the White House (not my words) was forced to drop their objection and go with the administration. Says Lauria:

“One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight…That was Perella Weinberg.”

…The full interview with Tom Lauria below is a must hear for everyone as it discloses not only the administration’s strong arming tactics in black and white, but also discloses some other critical facts that the president on his regular TV appearances has failed to mention such as:

- First lien holders were willing to accept a 50% discount on their positions, however the 71% demanded by the administration was seen as too much.
- The cash going to Junior claims (creditors below the first liens) will be between $10 and $20 billion, a number which in practice should satisfy a par recovery for the 1st liens if the Absolute Priority Rule was actually withheld.
- Among the creditors are not just vulturous hedge funds but “pensioners, teachers, credit unions, college endowments, retirement plans, and personal retirement accounts.”

In conclusion, Lauria summarizes the developing Chrysler mess best:

“The President is trying to abrogate contractual rights; if he will attack that contractual right, what right will he not attack?”

President Obama: The New Mr. Goodwrench

America is in the car business now; expect an American version of the Yugo on a GM lot near you.

What we witnessed on March 30, 2009, was frightening, but not completely unexpected. Even more frightening was President Obama’s belief that American’s would feel reassured by the fact that the full force of the US Government is now backing GM warranties. Makes me glad I own a Honda.

I also have no sympathy for either Chrysler or General Motors. When you dance with the devil, you shouldn’t be surprised when he leads.

The Obama administration's auto industry plan

Obama’s Rescue Plan “A Road To Hell”

Up is down, right is wrong, and European leader’s warned President Obama that his policies will lead the world to economic ruin:

Czech prime minister Mirek Topolanek adds to transatlantic friction over plan for global economic recovery

In all fairness, Minister Topolanek is not a socialist, and has been a valuable ally to America. Nevertheless, when Europe believes your polices go too far Left, you should take heed.

“Stimulus Package” Will Lower Wages For American Workers

Congressional Budget Office (CBO) released another report that is very critical of the recently passed American Recovery and Reinvestment Act of 2009. The CBO analysis, dated Feb. 11, states that the $787-billion plan will increase employment in the short-term, but will run up deficit spending which will “crowd out” private investment in the economy in the long-term:

CBO: "Stimulus" will lower wages for American workers

A Conservative Alternative To The Proposed Stimulus Package

Now that the election is behind us, and we have “only one President,” it is time for government to get back to business of governing (or some version of it). The American taxpayers are looking at a stimulus package approaching 1 trillion dollars, but most experts agree that the stimulus could approach 2 trillion before all is said and done. If you started counting right now it would take you 3, 179 years to reach 1 trillion, but it will take our representatives less than a few hours to commit this country to a financial burden too heavy for us to carry at this time.

Adding insult to injury, the inappropriately named stimulus package (American Recovery and Reinvestment Plan) is filled with pork:

A pork barrel stimulus package

But there is a valid alternative to this boondoggle called the American Recovery and Reinvestment Plan. Americans should encourage Congress to should consider the Republican Study Committee’s (RSC) plan with its emphasis on reducing America’s debt, lowering the tax burden on American families and businesses, and creating an incentive for businesses to grow and invest in the economy. The RSC’s plan does this by offering:

• Across-the-board reduction in marginal tax rates
• Repeal of the Alternative Minimum Tax
• A reduction in the corporate tax rate
• Ending the capital gains tax on inflation
• Full and immediate expensing of business equipment
• A one percent reduction in government spending

Throwing more taxpayer money is not the solution. It will only lead to further fraud and waste. We would be better served reducing speeding, reducing taxes, and establish policies that encourage private industry to thrive. That is what will get American back on track.

The First Thanksgiving

This story first appeared in the LA Times:

A time to pay tribute to the Pilgrims of Plymouth Rock.
'Giving Thanks'

It was Thanksgiving, and for the first time our whole family was together.

By Jennifer James
Courtesy of Curtis Publishing Company.
November 23, 2008

It was Thanksgiving, and for the first time our whole family was together. Mom and Dad had to drive all night just to get here, but boy was it worth it! The Grandsters really know how to do it up right. The Grandsters being Grandpa and Grandma. We were all seated at the table, and I couldn't wait to dive into those mashed potatoes and gravy. And the smell of the turkey -- I thought I was going to faint with happiness.

"What's that, Mindy?" demanded my little cousin Sam. He can be such a pain. He is 8 years old, two years younger than I am.

"What's what?" I asked.

He pointed to a little paper cup containing just three kernels of corn beside Grandpa's plate. I opened my mouth to answer and then realized I didn't know. Ugh! How I hate admitting that I don't know something!

Grandma answered, "It is to pay tribute to the Pilgrims."

"But why three kernels?" asked the always curious Sam.

Give it a rest, I thought.Grandpa answered, "It reminds me of what a tough time the Pilgrims had. In the beginning, three kernels of corn was each person's daily food ration." The table got real quiet after he said that.

Grandpa continued, "Against all odds, they made a life for themselves in the wilderness. Let's talk more about it after dinner."

Sure enough, dinner was over and Sam wanted to know more.

" Squanto taught the Pilgrims to grow corn!" Sam exclaimed. He's never going to forget that -- he played Squanto in the Thanksgiving Day play at school.

"That's right," Grandpa said. "But at first the Pilgrims were terrified of the Indians, as they called them. Then one day a tribesman named Samoset ventured into their encampment. He was tall and dark and by many accounts quite handsome. Loudly and plainly he proclaimed, 'Welcome!' in perfect English."

"The Pilgrims must have freaked!" shouted Sam.

Grandpa laughed and agreed. "I'm sure you're right. He had learned the language from English fishermen. For the Pilgrims, life was a constant battle for survival. Later, Governor William Bradford made a decision. Instead of the colonists sharing their crops equally, he assigned a parcel of land to each family and told them they could keep whatever they produced for themselves."

"Then what happened?" asked Sam."

At last the Pilgrims began to prosper. Governor William Bradford wrote in his book 'Of Plimoth Plantation,' 'This had very good success, for it made all hands industrious, so as much more corn was planted than otherwise would have been.'"

"Shoot! If you can keep everything you make, of course you're going to work harder. Everybody knows that."

Grandpa answered, "The first seed had been planted for the American Revolution. People were free to practice their religions as they saw fit and were free to keep the fruits of their labor. This had never happened before in the history of mankind. In the words of William Bradford, 'As one small candle may light a thousand, so the light here kindled hath shone unto many, yea in some sort to our whole nation.' "

"That William Bradford sounds like a pretty cool guy," said Sam."He was a pretty cool guy," Grandpa said with a chuckle.

Economists Say No On Taxpayer Bailout of Auto Industry

Economists Say No On Taxpayer Bailout of Auto Industry Wednesday,

November 12, 2008

By Matt Hadro, of CSNNews





(CNSNews.com) - It would be better to let struggling U.S. auto firms file for bankruptcy and restructure their companies than subsidize them with a taxpayer-funded bailout, said free market economists and financial experts. House Speaker Nancy Pelosi (D-Calif.) and Senate Majroity Leader Harry Reid (D-Nev.) have expressed support for a bailout.


Last weekend, Pelosi and Reid sent a letter to Treasury Secretary Paulson, calling for him to provide temporary support to the automobile industry. “A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector’s workforce,” Pelosi and Reid wrote.

On Nov. 6, the Democratic congressional leaders met with the president of the United Auto Workers (UAW) and the CEOs of Chrysler, Ford Motor Co. and General Motors to discuss the state of the auto industry and what could be done by the government. CNSNews.com talked with economists and experts in the financial markets about the proposal. “I think it’s a horrible idea,” said Bert Ely of Ely & Company, Inc., a financial and monetary policy consulting firm. “It’s not clear to me why it’s in the public interest to salvage those companies in that matter, other than the fact that this is obviously something that is a payoff to the labor unions and specifically to the UAW [United Auto Workers].”


“Quite frankly,” Ely said, “I think that all three of them ought to go into Chapter 11.” Both Dan Ikenson, associate director of the Center for Trade Study Policies at the libertarian Cato Institute, and Alex Tabarrok, associate professor of economics at George Mason University, disapproved of the bailout. “It definitely should not happen,” Ikenson told CNSNews.com. “It’s a farce to say that the U.S. auto industry is facing an existential threat.” The UAW, however, thinks the government should provide aid. “There is an urgent need for federal assistance,” a Nov. 6 UAW press release stated, “not just for our members, but for millions of workers and retirees and for thousands of companies who depend on the auto industry for jobs, retirement benefits, and revenue.”


UAW President Ron Gettelfinger called on Congress to immediately provide $25 billion in loans for auto companies to fulfill their obligations to provide health coverage for mreo than 780,000 “retirees and dependents,” the press release said. “Strategic assistance to a critical manufacturing industry makes sense for U.S. taxpayers,” stated Gettelfinger. “The alternative is lost jobs, business failures, and a shortfall in pension and health care obligations – all of which will cost far more in the future than the assistance we are requesting now.” But “they’re in the positions that they are in because of bad decisions that they have made,” said Ikenson. “As a result, they now have a very uncompetitive cost structure.” “Nowhere is it written in stone that these companies must exist,” he said. Prof. Tabarrok said it is foolhardy for the federal government to pick which industries get subsidies and which do not. The auto industry is not a key industry, he said. Many firms have pension and health care obligations, said Tabarrok, including the federal government with Social Security. Matthew Shapiro, a professor of economics at the University of Michigan, did not say whether he supports a bailout of the auto industry. “The auto industry is in extremely bad shape,” he told CNSNews.com, “because of the twin shocks of having oil prices shoot up, and then having the credit crisis, which basically means that it’s very hard for individuals to buy cars on credit.”

“They need to be part of a comprehensive solution, and I think it’s important that Congress, the current administration, and President-elect Obama all work together to do things for autos and other industries that will get them on a good footing going forward,” said Shapiro. “I would hope that the Congress would work with the incoming administration to craft a package that fits its longer-term plans,” he said.


“Longer-term includes both the next coming months where the auto industries face a very serious cash flow squeeze, but we also want to design a package that gets them on a sustainable path.”