Pirates of the Potomac

Chrysler Said to Seek Approval to Sell Most Assets by May 22 May 3 (Bloomberg)

Chrysler LLC, under orders by President Barack Obama to conduct a quick bankruptcy, will ask court approval to auction most of its assets in three weeks ... Chrysler wants a schedule that would require creditor objections to the sale to be submitted by May 11 and an auction held by May 22 ...

Who needs judges and due process when a president can simply issue "orders" to supercede both law & precedent. This is government by fiat, not by due process. (pun intended)

I still remember the Chrysler Loan Guarantee Act of 1979 (CLGA). I was a rookie banking officer responsible for accounts in MI, OH, & IN -- the bank's second largest portfolio, including (obviously?) the auto sector. I read the CLGA and the "new" Chapter 11 bankruptcy law side by side (replacing the "old" Chapter XI). "Plus c'est la change" because, then & now, the bailout required Chrysler develop more fuel efficient cars and other political 'ornaments'. ("... plus c'est la meme", a few years before that I received a swine flu vaccination!)

But the CLGA was hotly debated in Congress; such interferance in free markets was controversial. It was in fact an Act of Congress, not some ad-hoc back-door nationalization "ordered"(!?) by a president. Worse, it's not being nationalized, it's been made a gift to the UAW whose non-ERISA benefits have no legitimate claim. Back then we had not a pretense of due process we actually had due process. Taxpayers only guaranteed Chrylser's debt (which was bad enough), they (we) weren't the company's lenders. Nor did the CLGA really displace the bankruptcy code as many of its provisions were identical to Ch. 11's, except for the guarantees (and the ornaments).

Chrysler's secured, non-TARP creditors may be forgiven for feeling like due process has been hijacked by Somali pirates.

JRB

5/4/09