ShareThisOh, no, that's not true, said officials of the Obama administration after an allegation of bullyboy tactics in negotiations with one creditor over Chrysler's future. The charge was that if the company did not back down from its position, the White House would sick the press corps on its reputation.
The company did back down, and nothing of the sort happened to it, but here is what did happen. None other than Barack Obama himself lambasted as non-sacrificing speculators other creditors insisting they were due more than the administration was willing to give them. That would be something like 30 cents on the dollar of some $6.9 billion they had invested in secured loans to help Chrysler recover.
Speculators? As various analyses note, these were honest firms -- some representing the pensions of retirees -- that put up money with the understanding that they were entitled to the value of certain assets if Chrysler did not pay back the loans with interest. There was nothing untoward about this -- in fact, the Obama administration has itself been putting up taxpayer money to boost Chrysler's prospects.
It was little more than disregard for law and future investments that would cause the White House to decide on minimal repayment while giving a United Auto Workers trust a 55 percent share of a revamped Chrysler. What we have here is kissy-kissy for Democrat-loving unionists who themselves did as much to drive Chrysler into the dirt as any other single factor besides the executives who kept giving in to them.
And yes, the government gave itself part ownership, too -- an act, dare we say, of socialistic overreach? Why, you can't get away with that kind of talk, argue any number of left-wing Obama defenders whose own disgust for capitalism is made obvious every day. But true, the firm has not been wholly nationalized, it is just one firm and the government may take a hike at some point down the road.
If you don't put this move next to still other examples of extraordinary overreach either accomplished or in the planning stages, you might almost kid yourself that no free market principle is in near-death jeopardy.
The good news is what should have been the news long ago, that Chrysler is going into bankruptcy court and that the law will have its way on some of these matters.. Whatever the court decides, we will still get a reshaped Chrysler (and, eventually, a reshaped General Motors) reflecting Washington's minute and large policy hopes more than business shrewdness. Good luck.
It's a well-rehearsed story that Chrysler management -- that all of Detroit management -- has more or less operated like little wind-up soldiers that fall down stairs, landing on their tin heads. Chrysler here and there did good do things, however, even as it failed to prepare for rising gas prices and a serious recession few others foresaw, either. Will the U.S. government do even a few good things as it worries abut global warming and -- to paraphrase Obama -- does its best to give us a less consumer-oriented economy?
Keep in mind that ours is a federal government that has run up tens of trillions of dollars in unfunded entitlement liabilities that could easily put this country in a crisis making the current one look like a molehill. Virtually every time it intervenes in business with more than common sense rules of the road, it causes monumental accidents. Lately, it has been strutting about as if the constitutionally embedded concept of limited government was not a fundamental starting place for anyone who pretends to appreciate liberty and its essential concomitant of rule of law.
I hope Chrysler can hang on, but far more than that, I hope this country can hang onto some semblance of what has made it blessedly exceptional since its founding.
(Jay Ambrose, formerly Washington director of editorial policy for Scripps Howard newspapers and the editor of dailies in El Paso, Texas, and Denver, is a columnist living in Colorado. He can be reached at SpeaktoJay(at)aol.com.)
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