The 'Obully' Pulpit

The assault on hedge funds, derided by the Bully in Chief as a small band of "speculators" seeking a "bailout", was more than President Obama's usual opportunistic populism - it's a signal of the pernicious effect of the increasingly intrusive federal role in the private sector.

To set the record straight, some investors in Chrysler debt are asserting their legal rights - in fact, their legal obligation to shareholders - by electing to make their case in bankruptcy court. These creditors believe the government's deal unfairly compensates their senior positions, and that less senior stakeholders are getting a better deal. Bankruptcy courts exist to properly align the rights of stakeholders in an orderly and predictable way, and that's where this matter appropriately belongs.

So President Obama maligned a group asserting their legal rights, while praising those firms - especially large banks - who buckled to White House pressure to accept the deal.

If you haven't yet read "The Forgotten Man" by Amity Shlaes, now would be a good time to pick up a copy. The parallels are certainly interesting.

posted by Slublog at 11:49 AM

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