Monday, June 8, 2009

Good for You, Ruth

Today, Supreme Court Justice Ruth Bader Ginsburg delayed the sale of Chrysler pending a further review. Three pension funds from the great state of Indiana filed suit, arguing they were pushed back in the line of debt holders.

Usually, the Supreme Court gets it right, and today was no exception. Justice Ginsburg's ruling will allow a new look at the deal between Chrysler and Fiat. I am glad to see that at least one of the three branches of our government appreciates the rule of law and that when folks pay money to get a place in line (like someone who buys a secured debt in order to collect more during a fire sale) they deserve the right to stand in that line when the time comes.

President Obama has painted the debt holders as faceless hedge funds and 'greedy' Wall Street power players. In reality, the folks that owned Chrysler debt were the above-mentioned pension funds and individual debt holders that were counting on Chrysler to remain solvent. When that didn't happen, the pension fund managers are now exercising their fiduciary responsibility to the firefighters', nurses', and teachers' retirement funds they respresent.

And, Ruth, if you are reading this (I know you are an avid follower) be sure and post a comment. It is easy, just click on the button below (it looks like a pencil) to leave a quick note!

1 comment:

gregandlori said...

Agreed. Bastiat wrote that the difference between a good politician and a bad one is the ability to manage "not only the effects that are seen, but also the unseen."

Punishing bondholders will deter future investment, slowing expansion, economic growth, and job creation. All for what? To save a single car company?