Saturday, June 19, 2010

The Pernicious Precedent of Obama’s Shakedown of the former British Petroleum

BP must and undoubtedly will be held liable for the accidental oil spill in the Gulf. But the process should be confined to the long-established route through the judicial branch, not a new one through the executive. Obama has pressured BP into giving him $20 billion for an oil spill compensation fund. His hand-picked administrator will presumably dole out money as his boss Obama sees fit; based on Obama’s history (e.g., the Chrysler Confiscation), Democrat constituencies will primarily benefit. That seems to be the whole point. Obama has control over whether and to what extent the federal government will bring criminal charges against BP officials, a strong motive for BP to cave in to this extraordinary extra-legal demand.

Can there possibly be precedent for this, for a private company, under political pressure from a President, to give that President a humongous discretionary fund for him to dispense? No courts of law, no public processes. How possibly can this be good for the American system of law and Constitutionalism?

A Wall Street Journal Editorial (link) stated “BP's agreement sets a terrible precedent for the economy and the rule of law, particularly for future industrial accidents or other corporate controversies that capture national outrage. The default position from now on in such cases will be for politicians to demand a similar ‘trust fund’ that politicians or their designees will control…. BP deserves to pay full restitution for the damage it has caused, but it ought to do so via legal means, not under what Texas Republican Joe Barton rightly called the pressure of ‘a shakedown’….”

Why are those liberal voices so concerned during the Bush years with executive power and rule of law so silent now about this? Could it be they are concerned with such niceties only when their side isn’t in charge, now choosing power over principle?

John M Greco

Thursday, June 17, 2010

Obama’s New Proposal: Much More Spending on Government Unionized Workers

In spite of record-breaking peacetime American debt , massive borrowing from foreigners, economy-crushing tax and health-care policies, and near bankruptcy of hundreds of American states and cities, Obama has just proposed (link) borrowing yet more money to subsidize unionized state and local government workers -- workers who already have received a giant federal handout known as the “stimulus” spending plan (most of that federal spending went to state and local governments to support their unionized workers). Government unionized workers already earn far more in salary and benefits than private sector counterparts, but Obama wants more.

Obama doesn’t want a single unionized state and local worker given a furlough or a wage freeze just because their public employers are broke and deeply in debt, caused more than anything else by profligate spending on wages, benefits, and pensions for these employees. But unions such as SEIU make up the most powerful and dependable part of the Democrat Party and seem to provide most of the goon squad thugs who have been intimidating peaceful tea party protesters, so Obama needs them more than anyone else. In short, Obama wants to borrow money from foreigners, for which private sector workers will effectively be on the hook, to subsidize his most reliable Democrat Party members who are already substantially overpaid.

Nicole Gelinas, writer and analyst at the quarterly City Journal and the author of a recently-published terrific analysis of the causes of the recent financial crisis titled “After the Fall”, took apart this proposal of Obama’s in a commentary (link) titled “A Stimulus To Ruin”.

One more piece of evidence, as if any more were needed, that Obama’s true goal is to turn America into a European-style socialist welfare state where government has all the power and most of the jobs. His role model could be FDR, who became ever more popular while in office despite wreaking the economy via bonehead policy mistakes because he emoted well and talked up concern for the little guy; FDR let no crisis go to waste. But this time around Americans are more educated and more attuned to policy matters, and Obama isn’t getting the same widespread misplaced trust and adulation that FDR received. Even some Democrats may be waking up from the Obama spell -- Hot Air reports (link) that some Congressional Democrats may resist Obama on this one; they’ve had enough over-borrowing and over-spending. One can only hope.

John M Greco

Thursday, June 10, 2010

Chicago Blackhawks

National Hockey League champions, ending a 49 year wait.

Wednesday, June 9, 2010

The Obama Chrysler Confiscation – One Year Later

June 10 is the one year anniversary of the Obama Administration’s illegal confiscation of the assets of the old Chrysler Corporation to benefit its union allies and supporters, writes Indiana Governor Mitch Daniels in a recent Wall Street Journal essay (link). It seems to me that this act has received far too little attention, although understandably somewhat lost in the crowd of countless other Obama team insults to the American system which compete for our attention.

The facts are simple. Chrysler’s secured creditors had first dibs on the assets of the company and had their own sense of what those assets would be worth in bankruptcy. Obama and his team did not want the company to enter traditional bankruptcy because it would have eradicated the cushy, dysfunctional, company-crushing agreements on union wages and workplace rules. So in a faux-bankruptcy Obama seized the company and gave most of it to the legally undeserving union and a part of what was left to a foreign company to absorb Chrysler and its union agreements. The secured creditors got the scraps. Illegal, sure. But so was the forced confinement of Japanese American citizens during WWII, but it happened and most looked the other way, because at the time it seemed expedient and the Roosevelt Administration seemed too powerful to resist. In retrospect, however, we see it for what it was – a dismal deviancy from American law. This time around, the motive for the Chrysler confiscation was far less justifiable and the circumstances far less extenuating -- profit and protection for the auto unions. The critical factor in how this theft came to pass – Nicole Gelinas, in her terrific new book “After the Fall,” explains that most of the big, secured creditor banks had earlier taken government bailout money and were strong-armed by the Obama team to accept the raw deal of the confiscation, leaving the smaller creditors politically and legally on their own. Investor’s Business Daily said (link) that this confiscation showed that “political clout matters more than rightful claims.”

Three Indiana pension funds, Chrysler secured creditors, sued in federal court to uphold their rights and interests under American law. They were rebuffed, but not on substantive grounds, writes Governor Daniels:
Bankruptcy came [for Chrysler], all right, but in a new, extra-legal form run by the federal government. The United Auto Workers, who owned no interest in the company, were simply handed a 55% interest, a gift valued then at $4.5 billion. When no one else wanted to buy the firm, Fiat was given a 20% stake for free to take it over. After this looting, the legitimate creditors were told to be happy with the remnants. For Indiana's retired teachers and state policemen, this amounted to 29 cents on the dollar, a loss of $6 million versus the purchase price and millions more below the expected value in a standard Chapter 11 [bankruptcy] proceeding. When, alone among the victims, Indiana retirees went to court, they caused a lot of discomfort but no change in the outcome. The Second District U.S. Court of Appeals declined to overturn the cramdown, but the judges refused to go within a mile of the merits. How could they? The law calls certain instruments "secured" credit for a reason, and there was absolutely zero precedent for the Chrysler confiscation. [However,] On Dec. 14, 2009, in the under-reported news story of the year, the Supreme Court granted the request of Indiana pensioners and took the case. The Court immediately ruled from the bench to strike down the decision of the Second Circuit Court of Appeals, eliminating it as a possible precedent in any future proceeding.
So fortunately, this lawless act of the Obama Administration, acquiesced to by the legal establishment and the liberal media in the name of expediency and for the benefit of a major Democrat party constituency, is at least negated as precedent by the US Supreme Court. But the great theft by Obama and his minions and the receipt of stolen property by the auto unions remains on the history books and imprints an indelible stain on their already deeply tarnished legacies.

John M Greco

Related Post:
Obama, the Car Companies, and the Rule of Law

Thursday, June 3, 2010

Paul McCartney, Beatle and Uneducated Ass

British pop musician Paul McCartney, on a visit with Barak Obama at the White House, publicly said (link): "After the last eight years, it's great to have a president who knows what a library is."

First, McCartney felt compelled to make his small contribution to the ongoing debasement of the United States Office of the Presidency under Obama, where such slurs are made publicly in Obama’s presence in such a place of honor. The continual smearing of Bush by Obama directly or by preening surrogates with his acquiescence is way past being tasteless, counterproductive, and old -- it’s pathetic.

But as for McCartney himself, he’s clearly too stupid to know that, if you’re going to slur George W. Bush as an idiot, you should have academic credentials credibly superior to his. Bush is a graduate of Yale (with better grades than John Kerry) and of Harvard. My vague recollection is that McCartney is a high school dropout, so I did some research. McCartney’s Wikipedia entry (link) talks about his entering a secondary school, spinned as a prestigious one, but does not mention a graduation, usually a strong sign that it did not happen; and there’s no mention of college whatsoever -- by that age we know he was already involved in a music group. An entry at a Yahoo answer site (link) also goes on and on about the various secondary school exams he passed but slips in that he “left school.” Another site states that “he studied” at the school but omits mention of a graduation.

And it is patently clear that, although McCartney has composed perhaps a few catchy jingles since the breakup of the Beatles, the intellectual heft of that group, what there was, came almost entirely from John Lennon.

McCartney is poorly educated, almost certainly a high school dropout, and an ass, and a crass one at that. And Obama, well I won’t get started.

John M Greco