Live to fight another day

Justice Ginsburg granted the stay in the Chrysler case. It's now up to the broader court to decide if they want to intervene. WSJ Story.

Now, the question is, why do I care? Why should you care?

The answer is that this case is an avatar for our economic order. It's not so important whether the parties in this case get outcome A or outcome B, what's vital is that we have an established, predictable, lawful way of determining property rights in this country. If you'll remember, I voiced a similar fear when candidate Obama offhandedly mentioned nationalizing oil rights during the campaign. "Obama doesn't understand economics - part I"

The same disregard for property rights I identified at the time is rearing its ugly head now. As President, Mr. Obama wants a particular outcome (Outcome A), but long-established bankruptcy law dictates that the outcome should be Outcome B. (I'll point out here my belief that the major difference between dictatorships and democracy is the rule of law.)

Unfortunately for President Obama, he and Congress don't have the constitutional power to force Outcome A without first modifying the current bankruptcy laws. Instead, the administration is trying to pull an end-around the current laws by inserting itself in the situation using TARP money. Of course, the Indiana pension funds are not only balking at the usurpation of their rights as secured lenders, but they're also objecting to the use of TARP funds in a non-financial institution.

I can't pretend to be a legal expert, (I know just enough to get myself in trouble) but I can see the context of the situation: a group with strong historical ties to the ruling political party is receiving favorable treatment at the expense of others, and this favorable treatment, appears facially to be in violation of long-standing property rights laws.

Right now, the government involvement seems to be confined to the automotive and finance industries, but there are legitimate fears that this unpredictable method of allocating value to stakeholders will persist, and as a result, minority political interests may continue to be harmed.

So, as I said above, I don't particularly care about the outcome of the Chrysler situation, I'm just concerned that we follow the law in this country. The Obama administration has the power to get its way if they really want to, but they need to change the laws, not just the application in one instance. The law is the law and it needs to apply equally to everyone.

Interestingly, this is essentially the same complaint I had with the Bush administration's failure to acquire search warrants before engaging in their domestic wiretapping program. It's not that the outcome was so bothersome, it's that they failed to follow the law in their haste to implement their preferred policy. Like Mr. Bush, President Obama has the tools to implement the change if he wants, but has failed to use the proper constitutionally supplied tools.