Attorney Says White House Threatened to Destroy Reputations of Investors Who Didn't Agree to Chrysler Bailout

After the muscling Paulson did to BofA, the White House doesn't need this kind of publicity. I'm betting the hedge funds know that.

It doesn't matter what you say about hedge funds. This kind of threat coming from our government is disconcerting.

It's believable. I've been curious about the meetings where the White House has no real power, but manages to influence anyway.

everyday it's something...

Shameful, if true. Give me smaller government.

Most of the time the word fascism is used it is hyperbole by the ignorant or partisan. However what we are seeing in recent months is textbook fascistic control over private institutions and the trend is accelerating.

This is the face of fascism in America. My God what have we done to our country?

Agreed. I don't like hedge-funds, because I believe trade and finance is best when it is transparent and straightforward. However, I do not want my government threatening private business. Government should enforce just laws and regulations, and get out of the way!

"Government should enforce just laws and regulations, and get out of the way!"

Not when they are handing out cash. Since it's taxpayers money that's involved here, I think the government has every right to set conditions.

If the automakers and hedgefunds don't want the government to interfer, all they have to do is walk away.

If it were really "fascism" they wouldn't have a choice.

If it were up to me I would have the government stay out of it and let nature run it's course.

However since they determined to save the economy and millions of jobs and billions of investors money, I want to make sure all that money won't just end up in the pockets of the same corrupt or incompetent people that caused the problem in the 1st place.

firstwagon: You seem to be overlooking the threats and coercion being used. Chrysler fled from its lenders to the government and is a willing participant; the lenders are not as willing participants as the administration would have us believe and are getting the shaft. Similar things have been going on with the banks... not all the TARP participants are willing and they would rather their independence than government money.

A central function of government is making sure contractual agreements between private parties are kept and should otherwise butt out. However government is now breaking the rules and undermining contract law on which our free and private economy is built. Never underestimate the contribution of contract protection in the economic power of this country. Without it we are on our way to ruin.

"Never underestimate the contribution of contract protection in the economic power of this country"

Don't forget the "claims" of threats and coercion are being made by lawyers who make their income by finding ways around contracts.

Take everything you hear with a grain of salt. It's nothing so dramatic here as the end of the country or the ruin of us all. It's just a minor power play between some investors who are trying to milk every cent they can out of the system and the government trying to come up with a solution (can't say if it's the correct one or not but neither can anyone else)

Legal wrangling to get around contracts is an old and well practiced art. The President arm twisting secured asset creditors to take 50 cents on the dollar for assets that are contractually theirs is something new and very dangerous.

As people hurray at the actions taken to "fix the economy" I'm given to think of this exchange from "A Man For All Seasons":
William Roper: So, now you give the Devil the benefit of law!
Sir Thomas More: Yes! What would you do? Cut a great road through the law to get after the Devil?
William Roper: Yes, I'd cut down every law in England to do that!
Sir Thomas More: Oh? And when the last law was down, and the Devil turned 'round on you, where would you hide, Roper, the laws all being flat?

It's OK for lawyers but not the President?

LOL That's the lamest arguement I've ever heard.

Sorry bud but every bankruptcy involves people taking only a percentage of debts owed.

Were you as quick to complain when Bush made up the rules as he went along?

Interesting how this is about partisanship for you. For me it is about principle. As for Bush, in his desperation not to be pilloried for not doing enough in yet another disaster for his presidency, started this bailout crap for both the banks and the automakers. I say a pox upon both their administrations!

This should have gone through normal bankruptcy proceedings and let the lawyers argue it out. The lawyers for each side present their arguments before a judge as a neutral arbiter. That's the normal course of the law. The president is inherently non-nuetral from the fact that he has vested political interests (the unions) as a party to this deal(a party who made out very well I might add).

In a normal bankruptcy secured creditors are given priority over the assets that backed their loans. For example if I borrowed $30K from you to buy a new Chrysler and a year later I went into bankruptcy and stopped making payments on the car, you would have first rights to take the car back. Now the car is worth $15k so your taking a big loss, but at least you have the asset. Now imagine being told that you are going to take $7.5k in cash and be happy with it. That's the equivalent of what happened with Chrysler's creditors.