Recently, representatives of Indiana pension funds made an appeal to the Supreme Court, hoping to stop the sale of Chrysler to Fiat, an Italian automaker.
These funds are used by the State of Indiana to provide for the retirement of, among others, teachers and police officers.
Despite the seeming reputable nature of those benefiting from the Indiana funds, President Obama has nothing but criticism for them. Yes, these funds are criticized by the president for not “sacrificing” as did the United Auto Workers and other lending institutions. In fact, he said that “while many stakeholders made sacrifices and worked constructively, I have to tell you, some did not.”
President Obama tells us that these investment firms were holding out for “the prospect of an unjustified taxpayer-funded bailout.”
According to the president, these funds “were hoping that everybody else would make sacrifices and they would have to make none.”
Finally, speaking of the investment firms, President Obama tells us that he doesn’t “stand with them.”
I guess since he doesn’t stand with the Indiana investment firms, he doesn’t stand with United States law either.
According to United States bankruptcy law, secured creditors must be paid before unsecured creditors.
After secured creditors are paid, unsecured creditors are then paid depending on their priority level.
This process should be applicable to both the cases of Chrysler and General Motors.
Both companies filed for Chapter 11 bankruptcy protection. This status allows the companies to settle with creditors and then to emerge from bankruptcy after creating approved restructuring plans.
Instead of actually following proper procedure, the Obama Administration found it necessary to strong-arm Chrysler’s creditors into accepting less money than they might have obtained from the ruling of a bankruptcy judge.
Why is it suddenly acceptable to shirk our responsibility to be a nation of laws and order?
These bankruptcy laws are on the books for very justifiable reasons.
These laws seek to protect both creditors and debtors.
As noted, filing for Chapter 11 allows a company to settle its outstanding debt, restructure and then to re-emerge into the marketplace.
All the while, creditors receive protection depending on their particular status. Secured creditors receive preference because they loaned the now-bankrupt company money at a low rate of interest. This is while unsecured creditors loaned the same company money at higher interest rates.
It stands to reason, therefore, that secured creditors deserve, and have been awarded, special protection.
Without this protection, companies would find it even more difficult to raise the funds required to remain afloat in difficult economic times.
Maybe you wanted both Chrysler and General Motors to be bailed out by the federal government; maybe you didn’t.
Regardless, we cannot stand for our own commonsense laws being so flippantly ignored.
Throughout the process of the car company bailouts, the American people have already had to witness the total disregard of constitutional law. This is the case because President Obama made the decision to bail out both Chrysler and General Motors with TARP money, which was actually slated to bailout financial institutions.
The last time I checked, neither Chrysler nor General Motors fits the description of a financial institution. I also thought that only Congress could appropriate money. It seems the president must have “accidentally” overlooked that constitutional provision as well.
The real story here is not actually the bailing out or restructuring of either Chrysler or General Motors. It is actually about the president trying to ignore laws which stand in his way of doing as he desires.
The United States of America is a nation of laws.
We must not be so swift in taking action that we fail to consider our own laws. Our bankruptcy laws exist in order to protect, as much as possible, all parties involved in the situation.
How dare President Obama attempt to strong-arm, and then criticize, the Indiana pension funds for standing up for their statutory rights! These fund managers were doing nothing more than trying to protect the retirements of state employees, such as teachers and policemen.
In the end, I have nothing but praise and admiration for the Indiana pension fund managers for standing up for their rights as American citizens.
Let us always be mindful of the ability of our now large federal government to give and take as it desires.
Even if you want the car companies to be helped by the federal government, demand that it be done according to the laws of the United States.
Always remember the words of Thomas Jefferson, “A government big enough to give you everything you want is powerful enough to take everything you have.”
--As Appeared in The Daily Mississippian on Monday, June 15, 2009
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