What an excellent article. A 2009 screed from a Rupert Murdoch newspaper. Lots of credibility there. I hope you can hear the sarcasm dripping from my post. Go troll somewhere else.

Yes, in the midst of the greatest economic calamity since 1929--a calamity caused by your party's policies--we totally should have just burned a huge chunk of the American economy (and national defense infrastructure) to the ground in order sift a few more pennies on the dollar for a relative handful of secured creditors out of the ashes.

The UAW ended up with a huge stake in the company because it was Chrysler's largest creditor. And had Chrysler been allowed to zero out its obligation to the pension fund so the secured creditors could get those few extra pennies on the dollar, the company's pension obligations would have shifted to the Pension Benefit Guaranty Corporation a/k/a the U.S. taxpayers.

And who were these poor, put upon secured creditors? Well, as it happens, they were hedge funds who had snapped up a bunch of nearly worthless debt instruments from the companies that had actually lent Chrysler the money for pennies on the dollars as a speculative investment .

Boo f***king hoo. Yes, clearly preserving the ability of a handful of fat vultures to make a windfall off of a purely speculative investments in what had become junk bonds was vastly more important to the nation and to the world than saving hundreds of thousands of jobs, the supply chain that every car company depends upon, and, yeah, domestic production lines that we might need to use for weapons some terrible day.

Sweet jeebus. Rich people are like domestic turkeys. So stupid that they will gladly gorge themselves to death if someone doesn't stop them. And, at that, I'm doing the turkeys a disservice, because they're at least not flapping around in incandescent blind rage at the farmer who keeps them from doing that the way the rich of this country have been, successively, at TR, then FDR and, now Obama, for saving them from the otherwise inevitable consequences of their own idiotically insatiable rapacity.

Shooter, as usual you're shooting blanks. So let's use little words, in order to save the "auto industry" and those thousands of JOBS, the President forced all sides to make concessions to get the industry to be able to stand up on it's own. Got it now.

If you cannot understand grown-up conversations, then either ask questions (I'm sure people will be happy to respond) or keep quiet cause you will subject yourself to very appropriate sarcasm and ridicule.

And no, he didn't "give Chrysler to people who didn't have a legal claim to it." They did have a legal claim to it because, like the vulture funds you're crying bitter tears over, Chrysler owed the UAW's pension fund a huge amount of money.

"Waaaahhh! We bought billions of dollars worth of junk rated debt for pennies on the dollar because we thought we'd be allowed to reap a few bucks by throwing tens of thousands of people into unemployment, liquidate a huge part of the U.S. economy and shift the company's pension obligations onto the shoulders of the U.S. taxpayers for decades!

Waaaaaahhh! Tyranny! Oh, the horrible, crushing tyranny! Why, I became so upset I nearly spilled a drop my two thousand dollar a bottle Lafite-Rothschild '82 onto my 600.00 hand tailored shirt. This horrific abuse of power reduced our anticipated profits by almost two percent! Well, this outrage will not stand! To the barricades!"

I don't think you people understand what happened here. This is like Oabma coming to your house and saying "you don't own this anymore, I'm giving it to your neighbor".

Do you all think this is a good thing? Is this the kind of power Romney should have if he wins? These are not rhetorical questions, what say you?

The union pension funds get a priority in bankruptcy so they get money first before other creditors, secured or unsecured. The bankruptcy code has a list of priorities when creditors get paid. Since the UAW had the biggest priority claim, they were included in the reorganization plan. If the secured creditors did not like the plan they could have filed an objection in court and let the court decide if the plan is fair to all creditors. The court could have found the plan unfair and then ordered liquidation in accordance with the bankruptcy priorities which means the secured creditors may have received less money or nothing at all. But they received the new debt under the reorganization and most likely got more than they would have received if the company was liquidated. Stop your blathering about Obama taking over the company because it is BS. Obama does not have that power. What he did was come in with money to help the reorganization and used it leverage all interested parties including the unions. You don't have a clue about what you are talking about. No surprise there.

Shooter, weren't you the same one (wrongly) arguing just a little while back that Obama had actually used Romney's idea to save the auto industry? You're doing a bit of flip-flopping here.

And no, it's not the same thing as your example. It's been well explained in this thread. If you're going to make your case, you'll need to do better than talk-radio analogies.

Boy, shooter, you really can't read, can you? The people here understand the auto bailout a lot better than you do, and have explained it pretty clearly. The UAW also had a right to a stake in Chrysler, and a better claim than the people you support. Just because they're a union doesn't mean they don't have any rights. Both the creditors and UAW took a bad haircut, and both got something. Your analogy is completely and blatantly false. Perhaps it should be "This is like Romney came to your house, which you had almost paid off, and decided to give 100% of it to your bank, because, you know, banks."

@shooter - I say - If my neighbors loaned me money with my house as collateral and I did not pay them back - they DO OWN MY HOUSE!

You got it now?

Shooter I have to ask. Why does your party have this such disdain for the Auto Bailout? I mean seriously. It's like you people would have much rather have all of those people unemployed.

You would much rather the Hedge Funds taken over Chrysler. And dismantle the company, fired everyone. So they could make a profit. Than to see the company saved and Americans still employed?

We bailout Wall Street an your party doesn't say a peep. Not until it's leaked that those same Wall Street Execs used the money to pay bonuses. Instead of actually lending the money out like it was supposed to be.

Your party advocates subsidizing the most profitable business on the planet. Because as the GOP says The Oil Companies need those tax breaks and subsidies to stay afloat. When the fact ids the don't need a dime, more less 10's of millions.

I just do not understand. How the HOP is always saying they are for the middle class. When at every turn, they are hurting or just flat out ignoring the same class. They say they are fighting for.

You and your party. May not agree with what the President did with Chrysler. But what he did was save all of those peoples JOBS. And as Spock was infamously known for saying. "The ways and means of the many. Outweigh, the ways and means of the few."

There was no way for Chrysler to stay in business and save all of those jobs. Which the country desperately needed. So The President to take another Star Trek reference. Took a play out of Kirk's playbook. He did a Kobayashi Maru. He made an unwinnable situation, winnable.

What he did was come in with money to help the reorganization and used it leverage all interested parties including the unions.

Exactly, Obama changed the bankruptcy rules, to "leverage" the union. I appreciate the support.

June, you can say managed bankruptcy means two different things to Romney and Obama, but they look the same from here. The only difference is that Romney was expecting the rule of law to be followed and Obama wasn't

"This is like Romney came to your house, which you had almost paid off, and decided to give 100% of it to your bank, because, you know, banks."

If that sounds better fine... that is the kind of power you're giving to Obama's successor.

He made an unwinnable situation, winnable.

I hope you feel the same way if Romney kills all the EPA regs for coal fired electrical production, or declares Obama's Supreme Court picks illegal and puts in his own people. Today I can say the commentariat at Rachel's blog declared totalitarianism OK.

There goes Shooter with the You People bit.

Facts are irrelevant when you have dogma.

All you're doing is changing its diaper and feeding it.

Mike I'm surprised. You of all the respondents knows how this works, and you're still going to turn your back on bypassing the bankruptcy laws? In principle this is no different than Obama killing an American citizen without due process.

The bankruptcy laws were not bypassed. Obama came in with money to loan for the reorganization and got all of the parties to agree to the plan. If creditors were unhappy, they could go into the bankruptcy court and object. They did not object because they weighed the prospects of what they would recover in liquidation and what they could receive under Obama's plan. Every party lost something in the plan and that includes the unions. Obama did not change bankruptcy laws; the government underwrote the loans to reorganize. Now the creditors are better off because they have received more money than if the company was liquidated. The unions and all the creditors gambled on the reorganization and all of them won in the end. The only losers were the management which was replaced under the plan.

Folks, I'm sure that The Blank actually knows all this, but it isn't Ideologically Sound, so he rejects objective reality in favor of his ideological dogma. His sort will do that every time.

"The Blank." Hehehehehe...

Calvin ... They have a disdain for the auto bailout because OBAMA DID IT. If a Republican president had done this (and Bush probably would have done something like it, had his term continued into 2009), then it would have been OK with them.

This way, Obama gets credit for saving millions of GOOD jobs, and it gives him a big issue in his re-election campaign. Now, surely, you can see why Shooter and his buddies think that is a really bad thing.

Okay, now you're just raving.

When it went into bankruptcy, Chrysler, in addition to its massive unfunded pension obligation to the UAW, had 6.9 billion in secured debt. The owners of 300 million, out of that 6.9 billion in secured debt were demanding that the company be liquidated so they could get more than the 33 cents per dollar they got under reorganization.

The secured dissenters represented less than 1% of the total creditor assets. They wanted to set dominoes tumbling that could have sent an economy teetering on the brink of the abyss over the edge. What possible good the tiny amount of extra cash they could have reaped would have done them in a world in flames is unclear, but then, it's unclear what dragons want with more gold.

So, yeah, one time in history, a bankruptcy court forced a tiny minority of the secured creditors to accept less than unsecured creditors--i.e. the workers who had relied on their employer's promises--lest truly dire consequences for the nation, the world and, oh yeah, the upper class as a whole, ensue. Oh the horror.

The proper Civil War era analogy for you people is Roger Taney thundering against Lincoln's exploitation of an ambiguity in the Constitution as to whether the executive or the legislature or both had the power to suspend habeas corpus during a rebellion to keep Maryland from seceding in 1861.

Had Lincoln allowed Maryland to secede, D.C. would have been surrounded by Confederate territory and the war would have been over before it began. Yet there was Taney and the Copperheads, screaming "rule of law! Tyranny!" while a crisis that their own rigid ideological and economic dogmatism had created threatened to consume the entire nation. Lincoln responded with a question: "Are all the laws but one to go unexecuted, and the government itself go to pieces, lest that one be violated?"

Likewise, were hundreds of thousands of pensioners to have their payments slashed, future retirees to be beggared, hundreds of thousands of jobs lost and an entire industry destroyed, so that the holders of three hundred million out of 6.9 billion dollars worth of junk bonds could get their usual place in line?

It's the utter inability of you people to see the insanity of positions like this that's the real threat to the economy and the nation's politics.

It has been more than one time when a bankruptcy court forced a minority of creditors into the reorganization of a company. The court looks at viability of the company and plan and will not allow a minority to torpedo a plan.

@Steve:

"It's the utter inability of you people to see the insanity of positions like this that's the real threat to the economy and the nation's politics."

Those people actually search out little technical gotcha glitches, irrelevant as they might be to the situation at hand, and then apply their idiotic style of absolutism to claim they're operating on principle. This is what those people view as a "win."

Is it sad? Sure. Pathetic? Absolutely. Does it bother or stop them? Absolutely not, because it's all about the ideology. There is nothing else. Those people can't even detect relevance, anymore.

Whether the bailout of the auto industry was good or bad I have no clue and express no view as to whether it was good policy- however If shooter's point is that the bky code was not exactly followed - he is correct- Mike's points are not correct- the "union pension" does not have priority - the PBGC if it asserted an under funded claim would have priority over unsecured creditor- but not over secured creditors-

what happened in both cases was that instead of a plan where creditor's could vote- the mechanism used to "reorganize" was a sale of assets under section 363 of the bky code- the loans by the government as I recall where made to the essentially made up entities that purchased the assets- certain creditors did in fact object to the sale process as distorting the primary Chapter 11 plan process however those objections were overruled-

Often on these blogs there are comments about people losing the right to vote- which is exactly what happended in these cases- the courts however had affirmed in these and other cases the sale process- so as a legal matter it happens- that said is it distortion of the basic plan model- yes-but currently a legal one-

The bankruptcy laws were not bypassed. Obama came in with money to loan for the reorganization and got all of the parties to agree to the plan.

The plan which bypassed the laws of bankruptcy. Oh and let's not assert this agreement was voluntary...

http://articles.businessinsider.com/2009-05-05/wall_street/30083789_1_obama-administration-chrysler-plans-firms

I was in error and pension liabilities accrued withing 180 days before the bankruptcy have a 5th level priority in unsecured claims. So that means secured creditors take first and then unsecured. From a practical standpoint, a business usually has collateralized the real estate and possibly machinery. Inventory is collateralized with the supplier but extends only to the supplied products. But that means they get the property back and any shortfalls go in with the rest of the unsecured creditors. For example, the machinery manufacturer can take the property back, but if it is resold for a lesser amount than the debt, then that shortfall goes in unsecured. Most businesses do not allow collateralization of all assets of the company by one creditor.

your reading of 507 is correct- it is possible that the PBGC may have filed a lien pre petition- in which case it would be a secured claim- but generally junior to existing secured claims-

I thought Obama's family are Arab. His father is Kenyan/Muslim, so this is a very suprising revelation, in all seriousness.

Even odder was Obama's bio that he's from Kenya too.

Oh geez, here it goes again. The slave thing is a claim that his mother's side of the family has connections to one of the first documented slaves in the US. His father is Kenyan, his mother is from the Unites States. I believe his father had an Arabic heritage, but I am not sure.

Shooter forgets that people have two parents. It's hard to count that high when you're parroting bad math from conservative budget blogs. (Oh, and Obama's not from Kenya. He's from Hawaii. We have evidence!)

I realize this doesn't comport with the stuff you just know has to be true because the emails say so, but, turns out Kenyans aren't Arabs. Kenya is a multi-ethnic nation but all of the major ethnic groups are what Americans would call "black."

Arab is not synomyous with Muslim. Arabs are a Semitic people indigenous to the Middle East, like Jews. And Islam is a religion, not a race. There are many Arabs who are Christians. There are many, many, many Muslims who are not Arabs. Islam is, in fact, a religion of, quite literally, every race in the world.

Hope this doesn't fry too many circuits and cause too much smoke to come out of your ears.

Uh, no. Obama said he was born in Kenya. For 17 years.

http://www.breitbart.com/Big-Government/2012/05/17/Obama-pamphlet-in-use-2007

Uh, no, Mr. Mitty. Those breitbart super-sleuths were out super-sleuthed by their reality-based superiors:

- http://mediamatters.org/blog/2012/05/17/vet-the-literary-agents-the-breitbart-birther-t/185061

- http://politicalwire.com/archives/2012/05/17/literary_agent_says_1991_booklet_was_a_mistake.html

- http://littlegreenfootballs.com/article/40364_Breitbart.com_Publishes_Ludicrous_Not-Birther_Article_%28Wink%29

The Blank never allows objective reality to get in the way of a cherished lie.

Looks like yet another day of broken dreams for Mr. Mitty. But Mitty's a solid trooper; he'll get up tomorrow for another day of getting his head bashed in and his worldview trashed by evidence and reason and then somehow slink off and rationalize to himself he's gettin' it done for The Cause.

The Blank never allows objective reality to get in the way of a cherished lie.

Excuse me, are you asserting the photograph isn't real? What objective reality are you claiming that negates this story?

I guess the relevance didn't sink in the first time. Maybe another iteration will get it done:

- http://mediamatters.org/blog/2012/05/17/vet-the-literary-agents-the-breitbart-birther-t/185061

- http://politicalwire.com/archives/2012/05/17/literary_agent_says_1991_booklet_was_a_mistake.html

- http://littlegreenfootballs.com/article/40364_Breitbart.com_Publishes_Ludicrous_Not-Birther_Article_%28Wink%29

Wingnut trolls - just no damn good.

Disgusted...,

In true troll fashion, The Blank will repeat his favorite lies not matter how often they are debunked. I realized years ago that such people deeply enjoy lying.

Yes, I know. It's planned lying with the hope of muddying impressions of the facts. Don't know what our little Mitt-iot thinks he's accomplishing by spewing the nonsense here. (Actually, I do. He's stupid enough to believe the crap, and he's hoping "lurkers" take it seriously. Good grief. The loser spends his whole day doing that. Pathetic.)

Sorry, I didn't see the original debunking, perhaps you'd enlighten me as to Obama would allow this.

Maybe three times will help Mr. Mitty:

- http://mediamatters.org/blog/2012/05/17/vet-the-literary-agents-the-breitbart-birther-t/185061

- http://politicalwire.com/archives/2012/05/17/literary_agent_says_1991_booklet_was_a_mistake.html

- http://littlegreenfootballs.com/article/40364_Breitbart.com_Publishes_Ludicrous_Not-Birther_Article_%28Wink%29

The Blank is beyond help. Oh yes, and there is no excuse for him.

That's why I ignored him long ago. He's one of those special sort who fail the Turing test, even though he probably qualifies as technically human.

One question should be "why aren't you golfing right now instead of typing?"

Oh, that's easy. He would have eliminated taxes on their capital gains, interest income, and estates.

Indeed, ARodney - what was I thinking!

So, all contracts are null and void if unions are one party? Nice support for the rule of law, there, Randy. And the car companies DID go through a managed bankruptcy process, so we know what "would have happened." We also know what would have happened if they'd looked for private capital -- they looked, and couldn't find any, and we would have lost literally hundreds of thousands of jobs and America's last major manufacturing capability.

I'm not sure what "all contracts are null and void if unions are one party?" means or what you're asking (or not asking through clearly rhetorical question).

Bankruptcy law is clear on how the assets of the company should have been managed. The companies most certainly did NOT go through a managed bankruptcy process and you full well know it by your writing. I'll concede it was a tough time, and tough and unprecedented measures were called for. Unlike many conservatives, I'm okay with the government interventions at that time, in the auto industry, in banking, in mortgages, in insurance. We can look back on and second guess, but it was tough times and Obama was doing his best to try and manage us through a VERY rough time.

So to save the auto industry, he authorized a bailout. And you're absolutely right, private capital wasn't there. Government intervention was the only answer if they were going to survive intact largely in their pre-collapse form. But what was NOT necessary, and was in fact inherently wrong, morally bankrupt, was for Obama to move the labor unions to the FRONT of the line, ahead of so many others that deserved those assets. The government could have bailed out the companies and done it consistent with the law. Instead, they rewrote the law to suit their political ends. They completely FU%*@ED a bunch of people, people like me and you, and took their money and their assets and gave them to the labor unions. It was a naked and disgusting give up to organized labor.

"So, all contracts are null and void if unions are one party?"

That is an article of faith among those on the right.

here is the deal- under the code court can under certain circumstances reject a collective bargaining agreement - the restriction on impairment of contracts under the Constitution applies only to the states- not to federal law- some have speculated that the ability under section 1113 of the bky code to reject collective bargaining agreements is the real reason for in effect pre packaged approach to the two auto bky cases- if the cases had followed normal models there would have been a significant risk that the collective bargaining agreements would have been rejected the GM for example would have become a non union auto maker