Chrysler and the Constitution

[Desertrat]

As many have suspected, Obama may have overstepped the bounds:

http://hotair.com/archives/2009/05/04/senior-creditors-chrysler-deal-violates-5th-amendment/

"The heart of the argument starts on page 8 (via HA commenter Outlander):

III. The Taking of Collateral through a Direct or Indirect Use of TARP Authority is Unconstitutional.

13. The Treasury Department relies on TARP as the purported authority to justify the disparate treatment under the 363 Sale, even though TARP was enacted after the Senior Lenders’ liens on the Debtors’ property were already in place. The Supreme Court long ago recognized, however, that a secured creditor’s interest in specific property is protected in bankruptcy under the Fifth Amendment. Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 594 (1935)."

And:

"15. Relying on purported authority provided by TARP, the Treasury Department is demanding that Chrysler’s assets be stripped away from the coverage of the Senior Lenders’ liens – thereby impairing the rights of the Senior Lenders to realize upon those assets – so that those assets may be put in New Chrysler and used to the benefit of unsecured creditors in this proceeding, who will then be paid much more than the Senior Lenders.

But, even assuming that TARP provides the Treasury Department with authority to provide funding to the Debtors and impose the transfer of collateral away from the Senior Lenders, TARP was enacted long after the Senior Lenders contracted with the Debtors and received senior liens on the Debtors’ property. Radford specifically disallowed the use of a law to retroactively alter existing liens on property."

It will be interesting to watch the "official spin" on this one.

'Rat

[techfreak85]

i think the whole USA pretty much owning GM and Chrysler is too far anyway IMO.

[adroit]

After the past 8 years, you're picking on THIS as unconstitutional?

[quagmire]

I posted this in the rumor of Chrysler bankruptcy thread, about Chapter 11.



(a) The holder of a claim or interest allowed under section 502 of this title may accept or reject a plan. If the United States is a creditor or equity security holder, the Secretary of the Treasury may accept or reject the plan on behalf of the United States.

(b) For the purposes of subsections (c) and (d) of this section, a holder of a claim or interest that has accepted or rejected the plan before the commencement of the case under this title is deemed to have accepted or rejected such plan, as the case may be, if—

(1) the solicitation of such acceptance or rejection was in compliance with any applicable nonbankruptcy law, rule, or regulation governing the adequacy of disclosure in connection with such solicitation; or

(2) if there is not any such law, rule, or regulation, such acceptance or rejection was solicited after disclosure to such holder of adequate information, as defined in section 1125 (a) of this title.

(c) A class of claims has accepted a plan if such plan has been accepted by creditors, other than any entity designated under subsection (e) of this section, that hold at least two-thirds in amount and more than one-half in number of the allowed claims of such class held by creditors, other than any entity designated under subsection (e) of this section, that have accepted or rejected such plan.

http://www4.law.cornell.edu/uscode/11/usc_sec_11_00001126----000-.html

Since the gov't is a creditor in Chrysler, they have a say on to approve Chrysler's plan or not. Combining the gov't, UAW, and the TARP lenders, it brings the vote past the 2/3's vote required to pass the plan. And from what I hear, only 4 creditors didn't approve the plan( small ones at that). The UAW, TARP lenders, and the feds all agreed to the plan before Chrysler filed for Chap. 11.

So I don't see anything illegal if the majority of the bondholders agreed to Chrysler's( which is really GM's) plan.......

[PcBgone]

After the past 8 years, you're picking on THIS as unconstitutional?

Hows this for unconstitutional?

http://abcnews.go.com/politics/Story?id=6960824&page=2

[Wotan31]

After the past 8 years, you're picking on THIS as unconstitutional?
Don't have anything insightful to add? Just bash Bush! Yay! It's the easy answer to all the hard questions, right?

[adroit]

Don't have anything insightful to add? Just bash Bush! Yay! It's the easy answer to all the hard questions, right?

Who said anything about Bush?

I just pointed out what should have been the obvious fact that in the past 8 years your constitution has been thrown to the wolves in order to strip away your freedoms in the shallow guise of protecting you all from the big bad boogy man.

Now here you have a president that is desperately tying to save your beleaguered economy from itself and is apparently bending the rules ever so slightly to do so, and all of sudden you care.

The hypocrisy is as painful as it is stupid. It appears that YOUR easy answer to all the hard questions is to pretend that I'm wrong.

Cheers

[SLC Flyfishing]

Who said anything about Bush?

I just pointed out what should have been the obvious fact that in the past 8 years your constitution has been thrown to the wolves in order to strip away your freedoms in the shallow guise of protecting you all from the big bad boogy man.

And who might I ask, was the leader during the past 8 years? You don't have to say the name "Bush" to be speaking about Bush. Better yet who might I ask, is the current leader who might just be overstepping the bounds of the constitution as we speak and are able to address it?

SLC

[CalBoy]

Hows this for unconstitutional?

http://abcnews.go.com/politics/Story?id=6960824&page=2

I think that is a (valid) issue for another thread.

Who said anything about Bush?

I just pointed out what should have been the obvious fact that in the past 8 years your constitution has been thrown to the wolves in order to strip away your freedoms in the shallow guise of protecting you all from the big bad boogy man.

Now here you have a president that is desperately tying to save your beleaguered economy from itself and is apparently bending the rules ever so slightly to do so, and all of sudden you care.

The hypocrisy is as painful as it is stupid. It appears that YOUR easy answer to all the hard questions is to pretend that I'm wrong.

Cheers

I take any violation of the Constitution seriously, not just those which occur for national security reasons. If what the Obama Administration did is in violation of the 5th Amendment, then it should be given no more respect than any other unconstitutional act.

We (and that includes me) derided the Bush Administration for abusing the 4th Amendment in the name of our safety, and if we are going to do the same for Obama and the 5th Amendment then we are doing the same thing, only this time it is for economic safety.

That said, however, I don't know just how "unconstitutional" this is. Aside from what quagmire posted, I think the fact that TARP granted generally broad authority means that this will also be valid. This would have been a bigger problem if Obama had attempted to seize assets without Congressional approval, as the power of eminent domain (and lesser powers related to that like bankruptcy in which the US is an equity holder) are reserved for Congress.

[Desertrat]

"Now here you have a president that is desperately tying to save your beleaguered economy from itself and is apparently bending the rules ever so slightly to do so, and all of sudden you care."

Unfortunately, the methodology of this effort of saving the economy is 180 degrees off course. Granted, Bush/Congress/Paulson began the wrong-way path, but Obama/Congress/Geithner has been busily exacerbating the problem.

And the takeovers of GM & Chiseler won't help, other than to buy votes with tapayer dollars. If they weren't profitable in the past, how will they be profitable in the future? What magic is envisioned? The fundamental problems still exist.

Bending rules in the past justifies bending rules here and now? This is "change"?

[adroit]

"

Bending rules in the past justifies bending rules here and now? This is "change"?

I don't disagree. I'm merely taken aback at the selective indignation that some americans have when it comes to violations of the constitution. Especially when the magnitudes and potential implications of the violations are so massively different.

[takao]

so if this is unconstitutional what happens to the fiat-chrysler deal ? will chrysler now get the debt back ? which would mean fiat pulling out...

[cjm3113]

Hows this for unconstitutional?

http://abcnews.go.com/politics/Story?id=6960824&page=2

How is an assault weapons ban unconstitutional? People do not use assault weapons for hunting, self defense, or sport. They were designed for killing. They are used by military personnel to kill. They were not even existent when the 2nd amendment was created. The amendment which grants you a right to bear arms - not to bear automatic weapons.

If anything - I think our constitution needs some modernizing.

[leekohler]

Don't have anything insightful to add? Just bash Bush! Yay! It's the easy answer to all the hard questions, right?

Sorry, but that was completely relevant. You cannot deny that you all stood by and silently watched Bush trample the Constitution. Then this comes up and suddenly your undies are in a bunch. I for one would really like to know why. None of you said a damn thing when Bush did it. I'm not bashing Bush, I'm bashing the hypocrisy of conservatives.

FYI- I haven't been in favor of any of the bailouts.

[yg17]

Sorry, but that was completely relevant. You cannot deny that you all stood by and silently watched Bush trample the Constitution. Then this comes up and suddenly your undies are in a bunch. I for one would really like to know why. None of you said a damn thing when Bush did it. I'm not bashing Bush, I'm bashing the hypocrisy of conservatives.

FYI- I haven't been in favor of any of the bailouts.

Pissing on the Constitution: IOKIYAR

[Shivetya]

Sorry, but that was completely relevant. You cannot deny that you all stood by and silently watched Bush trample the Constitution. Then this comes up and suddenly your undies are in a bunch. I for one would really like to know why. None of you said a damn thing when Bush did it.

Just like under Bush the same facilitator exists, Congress.

For all the trampling that Bush supposedly did we are not worse off are we? Let alone did it affect all Americans as what the new chimp in the WH is doing?

Take your hyperbole back to the playground, making comments that cannot be proven one way or another is the sign of someone who is too emotional to discuss the article at hand.

BACK TO THE OP

As I posted on another thread, I am so happy to see Obama and gang getting bitched slapped. Theses guys have gone further off the deep end in less time than Bush and Co and the reason why they have is because the press and Congress is not calling him on it.

He uses the bully pulpit of the Presidency against OTHER AMERICANS. We don't need this arrogant jerk in office. When he doesn't get his way he goes on TV to vilify those who don't agree with him. He stirs up essentially what should be labeled as unrest to intimidate opposing people to back down.

So when does he invade some religious compound or use snipers against fellow Americans.... like the last guy... oops, the guy before him.

[kastenbrust]

so if this is unconstitutional what happens to the fiat-chrysler deal ? will chrysler now get the debt back ? which would mean fiat pulling out...

Fiat cant afford to go on with the deal anyway, it transpired yesterday that it needs 8 Billion from the EU bank to do it, which they aren't going to lend. Its like Apple saying, hey Microsoft's in trouble, lets buy them!, yeah great idea.... slight money issue.

[themoonisdown09]

Let's face it, we just need to admit that Obama is the anti-christ.

[quagmire]

For all the trampling that Bush supposedly did we are not worse off are we? Let alone did it affect all Americans as what the new chimp in the WH is doing?


I hope you meant that chimp comment in jest as how we called Bush a monkey....... As you should know back in the election, this was a very racist slur to describe Obama.

[mactastic]

This is "change"?
The fact that conservatives like you are now worried about the POTUS authorizing potentially unconstitutional acts is certainly a "change" from the past 8 years.

[leekohler]

Just like under Bush the same facilitator exists, Congress.

For all the trampling that Bush supposedly did we are not worse off are we? Let alone did it affect all Americans as what the new chimp in the WH is doing?

Take your hyperbole back to the playground, making comments that cannot be proven one way or another is the sign of someone who is too emotional to discuss the article at hand.



Hi kettle, you're black.

Excuse me? NOT ONCE have you come into this forum with one useful thing to say. You post and run constantly with nothing but snarky comments.

How much worse off are we? Are you KIDDING ME? Do you not see the huge mess that Bush left behind? Oh, I know, it's all Clinton's, Obama's and congress's fault. Bush was completley innocent and a good conservative. :rolleyes:

[Desertrat]

Repeat after me: "Bush left a mess for Obama to clean up." Okay? Everybody happy, now?

That has damn-all to do with Chrysler. It has to do with HOW Obama is going about dealing with the financial problems of the big corporations. The efforts to date appear to be helpful primarily to his large campaign contributors and supporters: The big Wall Street investment banks and the UAW. And it is being done at taxpayer expense.

quagmire, a gazillion folks could vote on the settlement process, but if it's illegal the vote is meaningless.

http://www.ft.com/cms/s/0/19ef5026-38b8-11de-8cfe-00144feabdc0.html?nclick_check=1

"The four banks that hold the bulk of the debt – JPMorgan, Citigroup, Morgan Stanley and Goldman Sachs – accepted the offer under strong political pressure. All four have received emergency government aid through the troubled asset relief programme.

The dissident group includes about 20 money managers, among them Oppenheimer Funds and Stairway Capital Management."

So the four biggies were blackmailed. Nice folks, that White House bunch. The dissident group has the "freedom" to obey the law insofar as fiduciary responsibilities toward their own investors.

Basically, in order to reward the UAW for its voting support, Obama wants to shaft those who invested in the lending institutions: Pension funds, health insurance companies, 401ks and the like. "Yeah, you loaned them money, and they owe you, but tough stuff. I don't care about court decisions." And trying to excuse him on the basis that his advising lawyers didn't know about "Radford" is just another sign of the general incompetence we see on a daily basis.

[jonbravo77]

Ok, someone explain to me how any of this violates the 5th amendment? In reference to the link rat provided in his original post.

No person shall be held to answer for a capital, or otherwise infamous crime, unless on presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Wikipedia (http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution)

Sorry, don't see how "debt" could be considered private property if that is indeed where they are trying to go with this one. And I do think that the companies that are involved have been compensated with being bailed out of the mess they made. Don't see what part of the constitution is being violated. But I'm sure someone will explain it to me in a logical manner and refrain from flaming me... HAHAHA, right... :D

[leekohler]

Repeat after me: "Bush left a mess for Obama to clean up." Okay? Everybody happy, now?


No- I'm not. I want to know why you weren't starting threads about bailouts when Bush did it. I also want to know where the tea parties were then. The fact is that for most people, this issue is about partisanship and politics, nothing more. I find it extremely disturbing, disingenuous and I'm tired of it.

Again- I've been against bailouts form the beginning. But all this sudden "concern" from conservatives is really telling. And of course, no mention of the bank bailouts. Nobody on the right seems to be talking about how crappy that deal was. Instead, let's talk about the auto companies. It's ridiculous and obvious.

[SLC Flyfishing]

No- I'm not. I want to know why you weren't starting threads about bailouts when Bush did it.

I for one, was busy starting a new semester in school. And on here I believe we were all knee deep in McCain vs Obama. Perhaps that had something to do with it.

Plus none of us knew at the time, just how far all this bailout crap was going to go!

SLC

[leekohler]

I for one, was busy starting a new semester in school. And on here I believe we were all knee deep in McCain vs Obama. Perhaps that had something to do with it.

Plus none of us knew at the time, just how far all this bailout crap was going to go!

SLC

We were discussing the bailouts at the time they were happening under Bush. We just didn't hear from a whole lot of conservatives about it. What made me angry about it was that there were no restrictions on that money for the banks. We handed them obscene amounts of money with no plans for recovering it. He also requested more in January- not a word from conservatives. Both the Wall Street Journal and conservative economist Lawrence A. Kudlow also defended Bush on this. And hardly a word from conservatives in this forum. But now that we have Obama, suddenly it's a free for all, and everyone's gnashing their teeth, crying in their beer and having "tea parties". It's unbelievable. We even now have this thread calling them "unconstitutional". Well you know what? It really rings hollow for me. Had the same people who are screaming and crying, and calling Obama all sorts of things done the same when Bush did it, maybe they'd have my respect. And maybe, just maybe, we wouldn't be where we are now. As it sits, it's partisanship at it's absolute worst.

http://www.aim.org/aim-column/bushs-big-bank-bailout/

[Zombie Acorn]

We were discussing the bailouts at the time they were happening under Bush. We just didn't hear from a whole lot of conservatives about it. What made me angry about it was that there were no restrictions on that money for the banks. We handed them obscene amounts of money with no plans for recovering it. He also requested more in January- not a word from conservatives. Both the Wall Street Journal and conservative economist Lawrence A. Kudlow also defended Bush on this. And hardly a word from conservatives in this forum. But now that we have Obama, suddenly it's a free for all, and everyone's gnashing their teeth, crying in their beer and having "tea parties". It's unbelievable. We even now have this thread calling them "unconstitutional". Well you know what? It really rings hollow for me. Had the same people who are screaming and crying, and calling Obama all sorts of things done the same when Bush did it, maybe they'd have my respect. And maybe, just maybe, we wouldn't be where we are now. As it sits, it's partisanship at it's absolute worst.

http://www.aim.org/aim-column/bushs-big-bank-bailout/

Funny, I seem to remember the original TARP bailout having trouble getting through the house and 1000s of fiscal conservative republicans and dems calling their local congressmen to bitch them out about the bailout. That was the first time that I have seen congresspeople scared for a long time.

Remember that?

" * Democrats Yea: 141
* Democrats Nay: 94
* Republican Yea: 64
* Republican Nay: 134

Total: Yea: 205 Nay: 228

A simple majority was needed, which was 218."

I still have no idea why the federal reserve didn't take care of this on their own, they must have realized the magnitude of the problem and didn't want to be caught with the target on their head, it seems a little wonky to let one guy in the treasury department start dispersing 700B as he wishes even though the economy may have needed injections into the financial sector at the time.

So now we have pissed off conservatives because banks got a bailout and then we have Obama coming in saying that we are going to end pork barrel spending and get to work. We then pass a bill that was completed 24 hours beforehand and was impossible that anyone had read the thing and on top of that we know there were all kinds of pork projects that most tax payers would tell someone to go **** themselves if asked to fund privately. People are going to be pissed no matter who is president.

[Desertrat]

leekohler, I sure never spoke favorably about the Bush/Congress first stimulus package or the first bailout. I thought then and still believe that this whole "spend ourselves into prosperity" stuff is 180 degrees off of reality.

Failures should be allowed to fail. Their assets should then be bought at whatever market price is determined by investors who will make profitable use of them. We already have well-established laws and procedures in place to deal with that.

That's what capitalism and the marketplace is all about: Success succeeds; failures fail. It's not a risk-free system. Folks who don't like risks should stay with salary jobs.

[leekohler]

leekohler, I sure never spoke favorably about the Bush/Congress first stimulus package or the first bailout. I thought then and still believe that this whole "spend ourselves into prosperity" stuff is 180 degrees off of reality.

Failures should be allowed to fail. Their assets should then be bought at whatever market price is determined by investors who will make profitable use of them. We already have well-established laws and procedures in place to deal with that.

That's what capitalism and the marketplace is all about: Success succeeds; failures fail. It's not a risk-free system. Folks who don't like risks should stay with salary jobs.

Funny, I seem to remember the original TARP bailout having trouble getting through the house and 1000s of fiscal conservative republicans and dems calling their local congressmen to bitch them out about the bailout. That was the first time that I have seen congresspeople scared for a long time.

Remember that?

" * Democrats Yea: 141
* Democrats Nay: 94
* Republican Yea: 64
* Republican Nay: 134

Total: Yea: 205 Nay: 228

A simple majority was needed, which was 218."

I still have no idea why the federal reserve didn't take care of this on their own, they must have realized the magnitude of the problem and didn't want to be caught with the target on their head, it seems a little wonky to let one guy in the treasury department start dispersing 700B as he wishes even though the economy may have needed injections into the financial sector at the time.

So now we have pissed off conservatives because banks got a bailout and then we have Obama coming in saying that we are going to end pork barrel spending and get to work. We then pass a bill that was completed 24 hours beforehand and was impossible that anyone had read the thing and on top of that we know there were all kinds of pork projects that most tax payers would tell someone to go **** themselves if asked to fund privately. People are going to be pissed no matter who is president.


Excuse me, but I must have missed the tea parties against George Bush. Can you please tell me when they occurred? Please point me toward the massive conservative protest calling W a socialist, Marx and a Muslim.

Oh wait- they never happened.

Oh and 'rat- you didn't post a thread against them either. You people amaze and disgust me. We had a chance to stop this in the last administration. We really did. Only now do you cry foul. You know what? Live with it. I have no interest in your partisan BS. You conservatives started this crap, and now want to blame it on others. Sorry. It doesn't work that way. BUSH ASKED FOR THE DAMN BAILOUTS. 'Rat- you certainly didn't start a thread against this during Bush, now did you? Nope. But now you feel the need. Well, it's a bit too late, isn't it? Bush did it. And now you're pissed off because the other party's president is doing it.

If you really gave a crap, you'd have fought it right away. But no- it only matters when it's a Dem doing it. IMO, it's not OK if anyone does it. If you had stood up when it mattered, when it was first happening, I'd be with you. So guess what? I say deal with it.


BTW- those voting numbers changed drastically in the final vote. Plus the Senate voted overwhelmingly for it. Don't give me that crap.

http://www.msnbc.msn.com/id/26953481/
http://www.cnn.com/2008/POLITICS/10/03/house.bailout/index.html

[takao]

leekohler, I sure never spoke favorably about the Bush/Congress first stimulus package or the first bailout. I thought then and still believe that this whole "spend ourselves into prosperity" stuff is 180 degrees off of reality.

Failures should be allowed to fail. Their assets should then be bought at whatever market price is determined by investors who will make profitable use of them. We already have well-established laws and procedures in place to deal with that.

That's what capitalism and the marketplace is all about: Success succeeds; failures fail. It's not a risk-free system. Folks who don't like risks should stay with salary jobs.

and so should hedge fonds who failed to make a deal in time be allowed to fail .. i'm sorry if the hedge fonds didn't think of the risk of getting shafted themselves for once
just like they all got tear eyed when Porsche did their VW poker game last year and it cost the hedge fonds 13 billion euros within 24 hours

you can't tell me that investing in chrysler in the last 10 years was something risk free
and last time i checked they are still bankrupt (= failure)

and if it weren't for the government chrysler would have been bankrupt just before christmas and wouldn't have gotten this fiat deal (aka the last straw)
that now Fiat is also in talks to fusion with Opel from GM jsut shows how many failures US car industry made the last decades and continued with just getting more loans from hedge-funds and other investment banks and all while management got bonus after bonus
how much is that for keeping capitalism in check if those investment firms just sit there and let those companies continue to rot _with their money_

why did nobody go to chrysler, GM etc. and say "what are you doing with our money" way earlier fro msaid companies ? why the wait until the government and FIAT (how bizarre) came to the rescue