Kudos to Justice Ginsburg for Chrysler Stay

I drive a Dodge Magnum, manufactured by Chrysler, and I therefore have a very personal interst in seeing that Chrysler continues as a viable, operating manufacturer of automobiles and parts.  But I also believe in the rule of law and in the principle of limited, specified government powers enshrined in our Constitution.  I have been greatly distressed in the months since the administration of President George W. Bush pushed the TARP (Troubled Asset Relief Program) through the Congress last fall.  I have become even further troubled by the current administration’s moves to greatly expand federal spending and power through the stimulus package, and by forcing the bankruptcies of Chrysler and General Motors.

The fact that these unprecedented federal power grabs and spending programs have been rushed through two congresses with almost no discussion about, or concern for their constitutionality, makes matters even worse.  Both the Obama Administration and Chrysler, of course, raise the familiar, “the-sky-will-fall” argument as a prod to have the federal courts quickly bless the terms of the forced bankruptcy and sale of a large portion of its assets to Fiat of Italy.  The specter of an economic catastrophe is thrown around with the same abandon as did AIG several months ago in pushing for its own multi-billion dollar bail out by the American taxpayers. 

Few stop to inquire whether such moves as the TARP and the use of “stimulus funds” by which the federal government partially nationalizes corporations, are properly founded in constitutional law.

This is why I applaud Supreme Court Justice Ruth Bader Ginsburg for temporarily blocking the Chrysler-Fiat deal in order to at least consider whether it represents a constitutionally-permissible use of taxpayer funds and federal government power.  Thanks to three parties in Indiana, which arguably would stand to lose significant monies if their assets and rights were diminshed — as they would be by the government-dictated Chrysler sale to Fiat — the constitutionality of these government actions has at least been put on the table.

Hopefully, the rush to judgment by the Chicken Littles who are dictating much of federal policies these days will not result in the High Court glossing over these important issues that have been raised.  The Constitution actually means something — or it did in previous decades in which the federal government was not allowed to do whatever it wanted by simply playing the “national security” card.  Perhaps Justice Ginsburg’s action will provide at least a small candle to help us exit the dark constitutional ignorance that has engulfed Washington, DC.  in recent years.  Go, Justice Ginsburg!

28 comments Add your comment

Eric

June 10th, 2009
7:31 am

And go Bob Barr! Fine article–and much needed!

ByteMe

June 10th, 2009
7:40 am

Uhh… the court decided to let the deal go through yesterday. They couldn’t muster 4 jurists who wanted to consider examining the deal.

dgroy

June 10th, 2009
7:49 am

Ahhhhh……it’s nice to hear someone talk with a little sense……thanks, Bob Barr, you’re a Great American.

Drago

June 10th, 2009
7:58 am

This is the Bob Barr I remember. The Constitution is the foundation of our society and the rule of law. Having worked for a bankrupt company, the actions of the current administration is troubling to me as this would change the financial fabric of the US. Secure creditors are paid first when money is dispensed, and just because you are the president, you should not be able to change the rule of law we have been governed by for centuries, especially the bankruptcy codes or laws.

zeke

June 10th, 2009
8:05 am

The Supremes need to be impeached! They are allowing Obama and the other socialist nuts in Congress and the government in general to VIOLATE ALL OF THEIR OWN BANKRUPTCY LAWS AND SEVERAL CONSTITUIONAL AMMENDMENTS!

Steve

June 10th, 2009
8:08 am

The deal is going through, get over it.

Whattheheck

June 10th, 2009
8:10 am

anyone that thinks the US is a republic anymore should get their heads examined. a year ago we were howling about how bad it was that chavez was nationalizing oil companies. look what obama has done? when a sitting president, with no private sector experience, has the power to replace sitting executives and board members at his whim, that is the time in which the republic has failed. and it has.

we all thought the soviet union was evil because it operated around the rule of law, putting in secret police that reported only to the highest levels of the kremlin. well, how many more czars is obama going to appoint before we realize the same thing is happening here? these czars report only to obama and have executive authority and privileg.

folks, obama has accomplished in 100 days what the soviets, nazis and emperial japan could not do…destroy our republic.

now, thats change we can believe in.

Whattheheck

June 10th, 2009
8:13 am

as a followup, everyone outside of the practice of law seems to not realize the legal significance of the chrysler and GM deals. the administration is destroying the law of contracts. i know it seems like no big deal, but the law in contracts, and a belief that a bona fide bargain should be upheld by courts, is one of the fundamental principles of our economy and way of life.

and before anyone says, youre a republican, of course you would say that. sorry, i am an independent. i left the republican party years ago.

derick

June 10th, 2009
8:19 am

One or two case, as in Gm or Chrysler, does not violate the history of bankruptcy codes or laws. As with any case, there are broad exceptions to each and every case. There are certain situations that are looked at individually. For the good of the the two bankruptcies, there are being some leeway given in these two case. You can’t tell me there have never been exceptions made in other cases from the letter of the law. Just because bankruptcy was governed by for centuries by these laws, as they say, There have been exceptions given and broad leeway given in other cases in bankruptcy before. These two bankruptcies will not rewrite every bankruptcy law ever written. YOU KNOW THAT AND STOP CRYING WOLF LIKE IT HAS NOT EVER HAPPENED BEFORE.

Brianc

June 10th, 2009
8:42 am

Credit is due to Mr.Barr for commending the action of a jurist who he may often disagree with on other issues. Too much of the blogosphere is focused on ad hominen attacks.

noruleoflaw

June 10th, 2009
8:50 am

derick,

actually, you are right, once in a blue moon, there have been exceptions, but as a retired attorney that practiced in this area, i can count on one hand the number of exceptions that judges have allowed. Further, I cannot think of one case that involved the executive branch overriding the judicial branch, and certainly not anything nearly at this magnitude.

what i am concerned about is the breakdown of our judicial system. right now, it seems as though the laws we live by are merely guidelines, rather than laws, and for that, i will cry out wolf, fire, whatever.

banklaw

June 10th, 2009
8:56 am

noruleoflaw,

i practice in this area. name for me one case in which the bankrupcty law disregarded the bankrupcty statute. just one. in every case i know about, the judge used statutory exemptions or exceptions to override creditor claims. this was part of the law.

heck, i will even let you go back to the depression. good luck.

noruleoflaw

June 10th, 2009
8:57 am

banklaw,

you are probably correct. i was trying to be accomodating while being my retired lazy self. i dont know of any offhand.

Pizen

June 10th, 2009
9:08 am

All I know is I would think long and hard before purchasing corporate bonds or investing in mutual funds that invest in corporate bonds. Your rights as a secured creditor have just been nuked.

AH

June 10th, 2009
9:16 am

a day late and a trillion dollars short Bob

Jimbo

June 10th, 2009
9:41 am

On the bright side, maybe now I can get a Fiat 500 Abarth over here.

Jefferson

June 10th, 2009
10:00 am

So where are the right wing Justices, are they only happy to stand up on the wedge issues? Where’s the rest of the story ? There must be more.

derick

June 10th, 2009
10:26 am

I don’t agree with the bankruptcy of both Auto companies, but you have to have options when dealing with the survival of both of these companies in their present state. The question is do we do nothing and let them fail in free market, or throw them a life vest and try to save millions of families and cost. Is it the fact that we want to live with the fact that well the market is what it is and we shouldn’t intervene because only on the principle of free market. Or as we learned from the fall of Leahman Brothers that doing nothing has far underlying issues than we did not forsee. When Leahman failed the administration did little at the last minute to prevent it. Thinking it was only one company, who could have forseen what it caused around the world.
Just imagine if we had let Leahman and Citigroup both fail, we would could be in depression right now, not recession.
Standing on the principle of capitalism just for the sake pf philosophy. doesn’t solve the issue. You have to have options and be bold enough to take the step outside the comfort zone. Doing nothing because of philosophy of capitalism is unacceptable.
Having options is the key, everything is not always black and white like the law as it is written.
Just like the dealerships had options and took it to the Supreme Court.

PMC

June 10th, 2009
10:37 am

Sell the Magnum Bob… buy a Challenger.

Scott

June 10th, 2009
10:45 am

I’m not an attorney, but all of you screaming about “Rule of Law” being trashed seem to be missing one BIG thing. This made its way all the way through the appeals process and was allowed to proceed. I would think if this was so outrageously against the “Rule of Law”, it would have been held up at some point, dont you think? There is no “trashing” of the judicial by the executive. I fully believe the judges who saw this case are far more qualified to make judgment than anyone here

Ray Pugh

June 10th, 2009
11:21 am

But see Scott, the problem is when you’re driveling idiot, you’re too stupid to tell when someone is more qualified than you to make a decision.

chiu

June 10th, 2009
11:32 am

just for this reason I will not buy GM or Chrysler.

Foxwood

June 10th, 2009
11:48 am

If you don’t know the Constitution, you don’t know the law. Read the 5th Amendment, Specifically the last part of it. “nor be deprived of life, liberty, or property, without due process of law”.With this and bankruptcy law, our Constitution only worth is for toilet paper.

sane jane

June 10th, 2009
12:08 pm

At least there’s a mostly decent, civilized conversation over here at BB’s blog. Far preferable to troll magnets Wooten and Bookman.

Props to noruleoflaw for acknowledging a possible mistake, manning up and even having a sense of humor about it. Most anonymous commenters just run away and hide when debunked. This gives cynical ol’ me a bit of hope.

noruleoflaw

June 10th, 2009
12:48 pm

i would just like the people on this board to realize a couple of things. first, the bondholders, the secured creditors vilified in the press, are for the most part average, middle class citizens. they bought those bonds believing that they would be first in line, and bought them at a premium because of that. a lot of them use payments on those bonds not for jet planes or another boat, but rather, groceries, electricity, school for their kids, etc. those are the people that the press made you believe were evil. screw the retirees who live on a fixed income, and one of the incomes is payments on the bond. screw them. (as you can see, i am a little angry about this).

Now, who got the sweetheart deal of sweatheart deals in this? it sure as heck wasnt the bondholders, they got pennies on the dollar and were removed from any secured position (they got common stock). It sure wasnt us taxpayers, we paid billions in bailout and get crap. you know who it was? the unions. yeah, they had to make some minor concessions, big deal. now they have to work like everyone else (actually, a lot of their contractural provisions are in place, so they really dont have to work like the rest of us). in return for their constant dedication to paying off every friggin democrat in the states, they get Obama as the ultimate bribe and sucker. their hard earned bribes have paid off in dividends.

i have always bought american, until now. i will never buy another american car, ever.

Scott

June 10th, 2009
1:00 pm

I frankly cant see anybody getting a “sweetheart” deal. Its just who is losing more. I frankly have a hard time with someone who is depending on bonds for groceries…it doesn’t really make a lot of sense to buy bonds at the risk of not eating

noruleoflaw

June 10th, 2009
1:29 pm

these bonds were bought years ago, when they were supposed to be secured and first in line by the bankrupcty laws. since the total value of the bonds held were less than the liquidation value of the car company, as long as the law was followed, their bonds would be safe. they were investing in an american car company. with the economic fallout, a lot of them have lost their jobs and their retirement portfolios have gone to waste. this is what a lot of them are using to get by.

Che was a homicidal maniac

June 10th, 2009
2:50 pm

Karl Rove sure does have it right about Moron Dowd at the NYTimesUP.

Former White House adviser Karl Rove lashed out at New York Times columnist Maureen Dowd on Fox News Channel Wednesday, saying Dowd was a “nasty, snarky person” with a “twisted, bitter little heart.”

“I think Maureen Dowd is a bitter, twisted, deranged columnist for the New York Times who misses no opportunity to show her disdain for the conservative side of the aisle,” Rove said on Fox News Channel.

“I actually went to an editorial board meeting at the New York Times and wasted a couple bucks on some flowers to give Maureen Dowd…give her a smile on her face. And that didn’t even work,” he recalled. “This is a dour, downbeat liberal.”

http://www.politico.com/news/stories/0609/23582.html