Chrysler Bankruptcy and the Nathional Interest
The bond holders of Chrysler refused to be the victims of the government's efforts to sweep the company's problems under the rug. Predictably, Obama chastised them for not being willing to follow the path of destruction taken by the holders of GM's debt.
Earlier Thursday an administration official said the restructuring of Chrysler LLC will go forward even though a handful of hedge funds have refused to accept the Treasury Department's offer to cut the auto maker's debt.
"Their failure to act in either their own economic interest or the national interest does not diminish the accomplishments" by Chrysler, its planned alliance partner Fiat SpA and other stakeholders in the company, the official said, "nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward."
They are acting in their own economic interest. That is what the administration is condemning them for. They did not loan money to Chrysler because they wanted to perform some nationalist service, nor should they now sacrifice by losing even more than they all ready have for that reason. The government's efforts to destroy the bondholder's value will make it impossible for any company to raise capital by selling bonds, for no one will have the confidence that the government will not then steal the value of their investment for the "national interest."
Read this passage from Atlas Shrugged and ask if we are not already there:
...men who apologize for being rich- will not remain rich for long. Hey are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of that guilt - and his life, as he deserves.
Then you will see the rise of the men of the double standard-the men who live by force, yet count on those who live by trade to create the value of their looted money - the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law - men who use force to seize the wealth of disarmed victims - then money becomes it's creator's avenger. Such looters believe it is safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.
Producers and investors are the right and left hands of prosperity. Our politicians want to cut off the hands of investors and loot the fruit of the producer's labor all in the "national interest." No one will invest and no one will produce if no one but the looters will prosper.
Atlas will shrug.
Politics, Economics, Taxes, justice,