Wolf Howling: bankruptcy

Showing posts with label bankruptcy. Show all posts

Tuesday, July 30, 2013

Let The Bankruptcy Begin

The "Fist of A Champion" - a sculpture in downtown Detroit dedicated to legendary fighter Joe Louis - is a city icon. It was updated a few days ago to reflect the reality of the city as it prepares for bankruptcy. An artist added a massive replica of a can of Crisco. Heh. Bend over and brace yourself, Detroit.

Surprisingly enough, the city government does not see the humor.

Thursday, July 18, 2013

Detroit Heads To Bankruptcy

The problem with socialism is that eventually you run out of other people money. And as Instapundit is fond of pointing out, anything that can't go on forever won't. So today it is for Detroit.

Just as the Soviet Union was the poster child for failed communist economics, so is Detroit the poster child for failed left wing policies in America. Detroit, wholly under Democratic control since 1962, has gone from one of our nation's premier cities to failure and ruin. It faces unfunded pension liabilities of between $17 and $20 billion and has stopped paying money it owes to unsecured creditors just so it can keep city services running. The city has been spending $100 million in excess of revenues for at least the past five years.

So now this poster child for all that is wrong with Democrat misrule filed for bankruptcy today - with all that means for the all powerful unions and public pensions.

The state took over the management of Detroit's finances earlier this year, declaring it in a financial emergency. After studying the city's finances for several months, Kevyn Orr, the Governor's designee for restructuring Detroit, put together a deal that would have meant breaking union contracts and permanently reducing pensions. The unions and pensions are screaming bloody murder - not merely refusing the offer, but going to court, requesting that the state not be allowed to file for bankruptcy because the Michigan state constitution provides that public pensions cannot be touched. That is a pretty easy legal question. Art. I Sec. 8 gives Congress plenary power over bankruptcy law, and as such, it cannot be altered by any state law.

At least one Democrat city council woman has floated the request for Obama to give Detroit a federal bailout, arguing it was justified since Detroit's Democrats turned out strongly for him in the last election. Just send them some of those free Obamabucks.

That would be grounds for civil war. Update: Joshuapundit has up a much more detailed post on the bankruptcy that is well worth a read.

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Thursday, January 20, 2011

Quick Hits

Things I've wanted to blog about but haven't yet gotten to:

The Hill - "House Democrats kicked off their annual retreat here with a vow to improve the flawed messaging that contributed to the loss of their majority last fall." It they think "messaging" rather than their "message" cost them 63 seats, they are have successfully crossed denial and territory known in psychiatric circles as "certifiable." But then, I've been saying for years, in all sincerity, that their leader, Crazy Nancy, really is certifiable.

Village Voice - Tony Bagels, Meatball, Junior Lollipops and Fats heading for the slammer along with more than a hundred other wiseguys.

George Will - "The idea that America's problem of governance is one of inadequate resources misses this lesson of the last half-century: No amount of resources can prevent government from performing poorly when it tries to perform too many tasks, or particular tasks for which it is inherently unsuited."

Volokh Conspiracy - Affirmative action again before the Court. Its expiration date is long past.

NRO - Jim DeMint promises legislation to prevent Congress or the Fed from bailing out profligate states.

Detroit News - Half of the city schools to close without more aid. But tenure and public union salarys remain intact. Just burn down the city, salt the earth and start anew somewhere else.

Jerusalem Post - How does Hamas stay in power. In large measure by skimming off the foreign aid.

Newsweek - The daughter of the Pakistani Governor of Punjab Province, slain for speaking out in defense of a Christian sentenced to die for blasphemy, discusses the dysfunctional stranglehold Islamists have on her nation.

WSJ - Palinoia. James Taranto attempts plumbs the dark, fetid depths of the leftie soul to diagnose what it is about Palin that drives them bat-shit crazy.

PJM - Norway wakes up to find their nation in mortal peril from the Islamicists within. At some point, this Europe-wide problem will reach critical mass and a lot of blood will be spilled.

AIFD - Military's Muslim chaplain vetting system poses significant risk to national security

AIFD - "If 2010 was the year America finally woke up to political Islam's ne farious reach on US soil, with luck 2011 will be the year we launch an offensive against it."

The American - How Fannie, Freddie and government failure caused the great recession.

Friday, August 13, 2010

California Broke-n

The poster child for the ills of progressivism and public sector unions, California, has yet to pass a state budget for the upcoming fiscal year, with the legislature apparently in full denial mode as to any need to cut spending. The state comptroller announced today that, without an approved budget, it will begin issuing IOU's at the end of this month.

Wednesday, January 13, 2010

Experiential Learning, California & Civil War

An anonymous commenter wrote this insightful observation a few days ago:

Here's one of the more common errors of The Right. The Left does not lack for intellect. What it lacks is wisdom. "Common Sense". They do not learn from any mistakes. Not their own, and not from those of others.

As the commenter went on to explain, that is why you see the left so wedded to socialism, despite its unblemished track record of failure. I think there is a lot of truth to his or her observation. And I thought of it again today when I saw an article on legislation about to be approved in The People's Democratic Republic of California,

California is a state that the left has pretty much destroyed over the past three decades. The state now stands $20 billion in the hole and on the edge of bankruptcy. The state is hemorrhaging business and residents, fleeing our nations most oppressive legislation and some of its worst taxation. It is, as George Will described it recently, a unionacracy - a state run by and for the public employee unions. One would think, given that the Sword of Damocles is hanging by a final, frayed thread over the state, that the legislature would learn from their past mistakes - that they would adopt austere fiscal restraint and start furiously cutting regulations and taxes to create a better environment for business. Right . . .

California, long a trendsetter for eco-friendly living, is breaking ground again this week. It's set, as early as today, to adopt the nation's first statewide green building code, which environmentalists say is not tough enough, and is also considering paying residents to cut their energy use. . . .

Just amazing. This isn't merely ignoring past mistakes, its full head buried in the sand acting outrageously crazy ignoring past mistakes.

I don't particularly care if California goes into bankruptcy, that union contracts are broken and a receivership takes over the purse strings. I don't care if California can't even get junk bond ratings for its bond issues over the next decade. But on the flip side, should Obama and friends opt to send our tax dollars to underwrite this failed far left experiment in modern socialism in order to protect Democrats from the consequences of their outrageous acts, then its time for a full on blood in the streets second civil war.

Monday, June 8, 2009

A Very Good Day At The Supreme Court

Hats off to the Supreme Court. They had a really good day. They stopped, at least temporarily, the sale of Chrysler to Fiat in bankruptcy court. They refused to hear a constitutional challenge to the military's "don't ask, don't tell policy." And they decided that Judges who take sizable campaign contributions shouldn't later sit in judgment of their benefactors.

First up, the challenge of some Indiana secured creditors to the Chrysler bankruptcy. Justice Ginsburg refused to rule on the merits of the challenge and, instead, issued an order halting the sale of Chrysler assets to Fiat pending further hearing on the matter. This from the Washington Post:

The decision buys the court time to consider objections filed over the weekend, and it comes as the clock is ticking. Fiat can back out of the deal if it is not finalized by Monday, and the government has warned that the only alternative would be to force the nation's third-largest automaker into liquidation, throwing the industry in turmoil and leaving tens of thousands of people without jobs.

The stakes may be higher for the Obama administration: If the court backs some of the claims, it could disrupt plans to rescue General Motors and weaken the government's hand in stabilizing the troubled economy.

"Every day that Chrysler remains in bankruptcy without consummating the sale threatens to postpone the resumption of production even further and to prolong the period of $100-million-per-day losses" financed by taxpayers, Elena Kagan, the U.S. solicitor general, said in a 26-page filing with the high court.

To be absolutely clear, the reason this matter has reached the Supreme Court is because the Obama administration has walked all over the constitutional and statutory rights of those people who invested in Chrysler. If the Obama administration had tried to come up with a fair plan to begin with, one that didn't favor the unions over Chrysler's secured creditors, they wouldn't be in this mess in the first place. And now, they are trying to strong arm Justice Ginsburg with the same crisis like atmosphere that arm twisted Congress into passing the largest spending bill in history without ever having read what they had voted on. A tip of the hat to Justice Ginsburg for refusing to cave in to this crisis mongering.

In other big news from the Supreme Court, they knocked out a challenge to the military's "don't ask, don't tell" policy regarding gays in the military. They refused a petition for cert. This is in fact an issue of both social policy and defense policy - two areas were the Court should always defer to the Executive and Congress. The Court has no enumerated powers as to defense, and as to social policy, that is the whole purpose behind the legislature. Whether to allow gays in the military was clearly not at issue when the Equal Protection clause was passed, and therefore this question should not fall under the sphere of issues amenable to Supreme Court decision making.

Lastly, the Court decided, in a 5-4 decision, that Judges who are the recipients of substantial campaign contributions from a party should not sit on cases where that party is a litigant. The conflict of interest and appearance of impropriety are so obvious one would think that this one would be a no-brainer. And for five of the justices, it was. The liberal five. I can mark my calendar as the last time I found myself in agreement with the left of the Supreme Court was in the 1990's. It's a once in a decade type of thing. Alas, this is one of those rare occasions when I think Justices Roberts, Alito, Scalia and Thomas got it wrong.

Friday, May 22, 2009

From Rick Moran - Not Socialism: Gangsterism

Rick Moran at Rightwing Nuthouse has just an eye-popping post up about how Team Obama is putting the screws to dealers contracted with Chrysler in order to salvage as many jobs as possible for the UAW. Here is a snippet:

. . . This “Letter from a Dodge Dealer” brings home in stark, human terms the cost of Obama’s power grabs . . .

That gun is being held by Obama’s auto team as it struggles to keep as many UAW jobs at Chrysler as possible regardless of whether the businesses involved get hurt. Case in point; George C. Joseph, sole owner of Sunshine Dodge-Isuzu in Melbourne Florida, a business that had been in his family for 35 years, who received the bad news that Chrysler was yanking his dealership agreement as part of their restructuring under the forced bankruptcy of the company ordered by the Obama auto team.

Mr. Joseph says that his dealership was “financially strong” and was seen as having “great respect in the market place and community.” He added, “We have strong local presence and stability.”

This was not enough to save Mr. Joseph or any of the other 788 dealers who are being dropped by the automaker. Beyond that, the “terms” of the break with Chrysler would no doubt have made Al Capone proud. . . .

Do read the entire post. I am not an expert in Bankruptcy Law, though I know that the Bankruptcy Courts can break contracts. This though, given the government involvement, goes into the realm of a government taking. It is scandalous, and just another example that "Lucky Leftie" Obama's moral preening is simply a rhetorical device.

Friday, May 8, 2009

"Lucky Lefty" Obama, TARP, Chrysler, California and Gangster Government

Obama is not running the government as President according to the Constitution - he is running it like a mafia don from the pages of a Mario Puzo novel. As Michael Barone describes it, we now have "Gangster Government." And as Dafydd ab Hugh has cynically but appropriately tagged him, our nation's leader is more aptly termed "Lucky Lefty" Obama.

First are the TARP "loans" to banks. They came with numerous strings attached. When some of the banks said they wanted to pay the loans back and crawl out from under the thumb of the Obama government, Obama's administration said "not so fast." Like the most lawless of loan sharks, to the contrary, the Obama administration floated a plan to forcibly convert the TARP loans into common stock, thereby making the government the dominant owner of the banks.

As it is, TARP funds are grossly distorting our economy in three ways. One, recipients of TARP loans are being leaned on by the government to act in ways that support Obama goals instead of those of the bank's shareholders and customers. Two, this government interference is going to give great pause to anyone so foolish as to be thinking of investing in any entity subject to Obama administration interference. And lastly, TARP funds are leading to corruption and fraud on a world record scale.

Then there is Obama's well blogged (though anything but well publicized in the MSM) extortion of Chrysler secured bond holders. It is a charge the Obama administration first categorically denied. Now, after others have verified the story, the White House simply refuses to answer questions on the topic . Obama strong-armed the secured creditors to give up their property rights - rights protected both in bankruptcy law and the Constitution - so that Obama could reward the UAW on a grand scale. It is government theft - stealing from innocent investors to give to his union supporters. The Obama administration threatened to destroy the bondholders in the press if they did not comply. Obama excoriated the bond holders as "speculators" at his 100 days press conference - an absolutely outrageous act. There were anonymous death threats made to the bond holders. And to put the icing on the cake, the bankruptcy court ordered exposure of the bond holders.

To add onto all of this, many of the secured bond holders were TARP recipients. These entities were not among the hold-outs seeking to uphold their legal rights. To the contrary, the TARP recipients rolled over long before this, giving up their legal rights so Obama could legally steal from them and give to the UAW. Do you think they were given an offer they couldn't refuse?

Then there is California, a state whose finances have been so mismanaged by the far left for over a decade that now, under fiscal stress, they are headed for bankruptcy by July. Seeing the writing on the wall, Gov. Schwarzenager pushed through legislation to lower compensation for union health care workers - a move that was expected to save over $72 million. The Service Workers International Union appealed directly to Obama. Now, in an absolutely outrageous act, Obama has unilaterally threatened to withhold all $6.8 billion in stimulus funds slated for California unless the California government reinstates the old wage rate for the unionized workers. Dafydd at Big Lizards has the entire story - and it is Obama's extrajudicial actions that led Dafydd to tag Obama as "Lucky Lefty" - an appropriate gangster nickname for our Don in Chief.

I have to laugh when I look back at this point and ponder the last eight year's worth of baseless left wing claims that the Bush Administration was shredding the Constitution. What we are being treated to now is the real deal. It really is "gangster government," and the Constitution doesn't seem worth the paper it is printed on to "Lucky Lefty."