When politics trumps law

I've been watching the sad, sorry spectacle of the Chrysler bankruptcy with growing alarm.

As readers will doubtless know, last week President Obama and his negotiators tried to pressure secured creditors (those with a legal claim to a certain degree of security in their loans to an entity) to abandon their rights and accept far less than is their legal due. At the same time, he and his team proposed that the United Auto Workers Union receive far more than its legal due - so much more, in fact, that the union would end up with a majority shareholding in Chrysler!

This is a travesty of justice. It's using the power of the Presidency to put pressure on those who won't go along with his political agenda. Michael Barone put it very well in the Washington Examiner:

Think carefully about what’s happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, is seeking to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party. The only possible limit on the White House’s power is the bankruptcy judge, who might not go along.

Michigan politicians of both parties joined Obama in denouncing the holdout bondholders. They point to the sad plight of UAW retirees not getting full payment of the health care benefits the union negotiated with Chrysler. But the plight of the beneficiaries of the pension funds represented by the bondholders is sad too. Ordinarily you would expect these claims to be weighed and determined by the rule of law. But not apparently in this administration.

Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.

There's more at the link.

This is a very, very dangerous patch of thin ice, legally speaking. If politicians can get away with such shenanigans, there will be no security in the law at all. We are supposed to be a nation of laws, but if those laws are mere conveniences that can be discarded or ignored at will, then what purpose do they serve? Why should any contract be considered binding? It becomes merely a piece of paper, to be tossed aside when it no longer serves the interest of those wielding power.

I was profoundly upset by the passage of the Patriot Act and other unconstitutional legislation during the presidency of George Bush. This is just as bad. It's what happens when politicians assume that their mandate to rule is also a mandate to do whatever they like, and hang the consequences. It's what happens when they become deluded that since they and their party are in a position to pass laws, they are actually above the law.

I've said before, repeatedly, that I'm neither a Democrat nor a Republican: and I blame both parties equally for this sort of mess. I fear that neither party has the interests of the United States at heart. They simply feather their own nests, and those of their supporters, while they're in power - and turn a blind eye when their opponents do the same, knowing that their turn at the trough will come round again in due course.

There's a time-honored saying about the fate of democracies (its attribution appears uncertain). It begins:

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy . . . "

That's what both parties have been doing for the past twenty-odd years: using their shifting positions of power to pander to their supporters, feeding them from the trough of patronage. Can our democracy long survive the extremes to which this daylight robbery of the public purse is now being taken?

You make the call. I, for one, am beginning to wonder. I can only hope that, in the case of the Chrysler (and possibly forthcoming General Motors) bankruptcy, the rule of law and the equity it prescribes will prevail. If President Obama is allowed to get away with this, the long-term consequences will be catastrophic.

Peter