THE FOLLOWING ASSESSMENT FROM THE WALL STREET JOURNAL HAS GRIEVED ME GREATLY... GRIEF
When the Wall Street Journal starts to publish red caution flags such as the following... we better pay attention.
Just in case you are wondering... their article in essence sounds the alarm that in their opinion the White House in this federal governing of the financial mess is treading on "unconstitutional" grounds.
A very serious charge... someone in Washington better be paying attention.
Wall Street Journal
CHRYSLER AND THE RULE OF LAW
The Founders put the contracts clause in the Constitution for a reason.
By TODD J. ZYWICKI
The rule of law, not of men -- an ideal tracing back to the ancient Greeks and well-known to our Founding Fathers -- is the animating principle of the American experiment. While the rest of the world in 1787 was governed by the whims of kings and dukes, the U.S. Constitution was established to circumscribe arbitrary government power. It would do so by establishing clear rules, equally applied to the powerful and the weak.
Fleecing lenders to pay off politically powerful interests, or governmental threats to reputation and business from a failure to toe a political line? We might expect this behavior from a Hugo Chávez. But it would never happen here, right?
Until Chrysler.
The close relationship between the rule of law and the enforceability of contracts, especially credit contracts, was well understood by the Framers of the U.S. Constitution. A primary reason they wanted it was the desire to escape the economic chaos spawned by debtor-friendly state laws during the period of the Articles of Confederation. Hence the Contracts Clause of Article V of the Constitution, which prohibited states from interfering with the obligation to pay debts. Hence also the Bankruptcy Clause of Article I, Section 8, which delegated to the federal government the sole authority to enact "uniform laws on the subject of bankruptcies."
The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar....
Go read the rest of the report... and ponder.
XtnYoda, shalomed
H/T to Drudge
When the Wall Street Journal starts to publish red caution flags such as the following... we better pay attention.
Just in case you are wondering... their article in essence sounds the alarm that in their opinion the White House in this federal governing of the financial mess is treading on "unconstitutional" grounds.
A very serious charge... someone in Washington better be paying attention.
Wall Street Journal
CHRYSLER AND THE RULE OF LAW
The Founders put the contracts clause in the Constitution for a reason.
By TODD J. ZYWICKI
The rule of law, not of men -- an ideal tracing back to the ancient Greeks and well-known to our Founding Fathers -- is the animating principle of the American experiment. While the rest of the world in 1787 was governed by the whims of kings and dukes, the U.S. Constitution was established to circumscribe arbitrary government power. It would do so by establishing clear rules, equally applied to the powerful and the weak.
Fleecing lenders to pay off politically powerful interests, or governmental threats to reputation and business from a failure to toe a political line? We might expect this behavior from a Hugo Chávez. But it would never happen here, right?
Until Chrysler.
The close relationship between the rule of law and the enforceability of contracts, especially credit contracts, was well understood by the Framers of the U.S. Constitution. A primary reason they wanted it was the desire to escape the economic chaos spawned by debtor-friendly state laws during the period of the Articles of Confederation. Hence the Contracts Clause of Article V of the Constitution, which prohibited states from interfering with the obligation to pay debts. Hence also the Bankruptcy Clause of Article I, Section 8, which delegated to the federal government the sole authority to enact "uniform laws on the subject of bankruptcies."
The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar....
Go read the rest of the report... and ponder.
XtnYoda, shalomed
H/T to Drudge
posted by XtnYoda at 3:29 PM
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