In my most recent issue of Imprimis, Mr. Seth Lipsky goes into some detail of how the Kelo case has caused somewhat of a pushback in which states have begun to “strengthen protections against the kind of raid on private property that Mrs. Kelo suffered.” He goes on:
“Rarely has the loser in a Supreme Court case established so great a legacy as Mrs. Kelo, whose case is one of the most important warnings we have had in my generation of the vigilance that is going to be required in respect of the right to property enshrined in the Fifth Amandment.”
While truly insidious in nature, our ruling class is not stupid. Seeing that Kelo created at least a minor furor to those who were politically aware way back when and, as hinted above, is probably going to prove a minor headache to the federal behemoth in the future; they know that the continued war on private property best be kept beneath the headlines as much as possible. With that in mind, please go read “The Auto Bailout and the Rule of Law” by Todd Zywicki at National Affairs (1) and watch for the quote in the dairy title above…it will come about the time your blood really begins to boil.
A quick side note: At this point I will already dictate that Mr. Zywicky’s piece is the most important article to read in 2011. In less than 6000 words it sheds quite a light on the beltway and, if this is all news to you, the media that still only parrots the “success story narrative” that has been spoon fed to them from the White House. Similar dictated by me, for those who missed it, last year’s most important article was “America’s Ruling Class – And the Perils of Revolution” by Angelo M. Codevilla at The American Spectator. (2) Go read both of them now. For the record, I probably linked to Zywicki’s article earlier this week via Instapundit. Prior to that I don’t recall ever reading anything by him or from National Affairs.
Last October, I touched on this topic and the “cynical disregard for laws and lawmaking” (3) with an embedded Amity Schlaes quote (also from Imprimis):
“When the history of a broken American decade (or more) is being written from the 2025 perspective, Obamacare and unimaginably huge deficits may be largely the focus but I suspect Amity Shlaes…nailed the moment the cut to the American jugular occurred with barely a whimper from the then Tea Party-less electorate:
‘Property rights are endangered as well by the ongoing assault on contracts generally. A perfect example of this was the treatment of Chrysler bonds during the company’s bankruptcy, where senior secured creditors were ignored, notwithstanding the status of their bonds under bankruptcy law. The current administration made a political decision to subordinate those contracts to union demands. That sent a dangerous signal for the future that U.S. bonds are not trustworthy.’
It is the implications of this arrogant, extra-legal maneuvering that we will be dealing with for quite some time to come. At least their Progressive hearts were in the right place.”
Mr. Zywicki expands greatly on the story and ignites my ire towards the third DC branch. (Make that reignites…Kelo.) But it’s much more than that…the whole story really is disgusting.
First, the automakers playing games with the system during the crisis…and how much of this was coordinated inside the beltway:
“But though their fates seemed to be sealed, both automakers brazenly refused to make plans for bankruptcy filings. They assumed that the federal government would not allow them to suffer the same fate as most other poorly managed companies in America. So they pleaded for a federal bailout, arguing that Washington’s failure to provide one would result in the companies’ liquidation — in part precisely because the automakers’ failure to prepare for bankruptcy filings would end up producing ‘disorderly’ bankruptcies that, in turn, would make it difficult to keep the companies alive…”
Then, the rather obvious but somehow ignored:
“In truth, however, the use of TARP funds to bail out GM and Chrysler most likely violated the law… The car companies, after all, were not ‘financial institutions.’”
With minimal pushback and/or spine from those charged with oversight responsibilities:
“A group of 26 irate Republican lawmakers sent a sharp letter to the president complaining that ‘Congress never voted for a federal bailout of the automobile industry, and the only way for TARP funds to be diverted to domestic automakers is with explicit congressional approval.’ Supporters of the bailout kept mum about the question of legality.”
Then some of that good ol’ Chicago way:
“In a now-infamous speech in April 2009, President Obama publicly attacked these investors — who were merely standing up for their contract and property rights — as profiteers, criticizing them for their unwillingness to make the same sacrifices as other investors (but not, of course, UAW members, who received a windfall). In response to this public browbeating from the president of the United States, the hedge funds caved and agreed to the terms.”
With a side of probable cronyism:
“Many of Chrysler’s secured-bond holders were large financial institutions — several of which had previously been saved from failure by TARP. Though there is no explicit evidence that support from TARP funds bought these bond holders’ acquiescence in the Chrysler case, their silence in the face of a massive financial haircut is otherwise very difficult to explain.”
Finally, topped off with Progressive Utopia:
“And this approach — defined by broad government power unchecked by legal constraints and possessing sweeping authority to pick winners and losers — has guided the administration’s policies well beyond the auto bailout. The aim of this approach is to rejuvenate the New Deal vision of the regulatory state, in which regulators are seen as disinterested experts with the factual knowledge, practical wisdom, and unwavering integrity to manage the economy. They alone are presumed to be capable of steering the nation toward prosperity.”
Absolutely disgusting…and so very destructive to the fabric of our experiment in republicanism. This is the spear of crony socialism into the heart of Americanism:
“In the Chrysler case, however, creditors who held the company’s secured bonds were steamrolled into accepting 29 cents on the dollar for their loans. Meanwhile, the underfunded pension plans of the United Auto Workers — unsecured creditors, but possessed of better political connections — received more than 40 cents on the dollar.”
Mr. Zywicky concludes with the necessary end game: “Managed Decline”. Once more I cry that Dr. Franklin’s rising sun has reached the end of the day. (4)
Proud Redstate Member since April 2006…?
(4) “Whilst the last members were signing it Doctor Franklin looking towards the President’s Chair, at the back of which a rising sun happened to be painted, observed to a few members near him, that Painters had found it difficult to distinguish in their art a rising from a setting sun. ‘I have,’ said he, ‘often and often in the course of the Session, and the vicissitudes of my hopes and fears as to its issue, looked at that behind the President without being able to tell whether it was rising or setting: But now at length I have the happiness to know that it is a rising and not a setting Sun.’” (via http://en.wikiquote.org/wiki/Benjamin_Franklin)