To hell with the consequences

President Obama continues to horrify many Americans with his apparent disdain for business and investors. His plans for putting the tottering Chrysler corporation back on its feet look to be another step on the road to a full-scale depression:

Unlike a traditional reorganization, in which the parties negotiate the terms of a restructuring that is then voted on by each class of creditors and shareholders, the administration plans to quickly sell Chrysler’s most important assets to a new entity—“New Chrysler”—whose stock will be owned by Chrysler’s employees and Fiat. The senior lenders who objected to the government’s offer (which amounted to little more than 30 percent of their claims) will not have any vote on the sale. Their only option is the one they have pursued: objecting to the sale, and praying that bankruptcy judge Arthur Gonzalez takes a hard look at its terms even while the government is breathing down his neck and saying in a sense, he better approve or else.

If investors think their assets are going to be handed over to insiders by the bankruptcy courts then they are simply not going to invest in the American economy. That's a recipe for full-scale depression.

And if there's to be a depression in the US, the effects will surely be felt on this side of the Atlantic too.

More here.

Comments

[Jonny N]

This is important for Obama-watchers as it isn't just his rolling over and playing dead when faced with the possibility of disagreeing with Congress, but actual activity on his part with the end of promoting his favoured interest groups.

I wouldn't buy anything from "New Chrysler" any more than from the old one.

[GW]

It is, as Michael Barone termed it, "gangster government." And it is happening with the TARP program and the banks also. Obama is doing things that no government in the last 50 years could have gotten away with, but the MSM is so in the tank for this guy that not a single negative comment emerges. Indeed, when word of the threats against secured creditors of Chrysler were made public by the attorney for one of the creditors, there was a virtual news blackout in the MSM. It remained in place even when others came forward to verify the attorney's allegations. The one person in the MSM who followed up, Jake Taper, was savaged by the left for not accepting blanket denials from the White House at face value.

The bottom line, if this is merely the opening salvo in how Obama intends to remake the American economy, then things portend to get much worse - on both sides of the pond.