Tuesday, June 9, 2009

This just in: Rule of law officially dead -- the Supreme Court says so.

If anyone had any illusions that gangster government would be restrained by the Supreme Court, go here. The damage that this will do to future investment is incalculable. The rule of law is dead. The rule of gangster government enriching their allies at the expense of others is here. I'll have one final comment on the other side.


High court won't block Chrysler sale

Jun 9 06:27 PM US

WASHINGTON (AP) - The Supreme Court has cleared the way for Chrysler's sale to Fiat, turning down a last-ditch bid by opponents of the deal.

The court said late Tuesday it had rejected a plea to block the sale of most of Chrysler's assets to the Italian automaker. Chrysler, Fiat and the Obama administration had warned that the high court's intervention could have scuttled the sale.

A federal appeals court in New York had earlier approved the sale, but gave opponents until Monday afternoon to try to get the Supreme Court to intervene.

Justice Ruth Bader Ginsburg ordered a temporary delay just before a 4 p.m. deadline on Monday.

Now the court has freed the automakers to complete their deal.

The Court of Last Appeal.


Loren said...

It's not just investment and the financial markets, it's everything. The administration can say that any law is wrong, and need not even legislative authority to do something.

Add to that his cult of personality, and he can do anything he wants, until physically stopped.

Old NFO said...

The sad part is the losses that will be endured by the People of Indiana who's funds were invested, and now they get basically NOTHING while the Unions get over .50 on the dollar...

Anonymous said...

And now we have legalized outright theft and accomplished a "worker's revolution" with the help of Mordor.

As we know in the gun world, just because it's legal doesn't make it right. lex malum, lex nulla.

Time for widespread civil disobedience.

Sean said...

As we slip into the night.......

LUCKY said...

Sometimes its darkest just before everything goes pitch black

Anonymous said...

Maybe I missed something, and I didn't read the entire article, but how exactly is this bad?

Anonymous said...

Why is this bad?

Truthfully, it isn't bad yet, but as it is, the government radically changed the rules governing secured creditors, who were guaranteed their investments because they could seize assets owned by the company.

Assets like buildings, equipment, inventory, etc.

Now, that's gone. Who is going to be crazy enough to loan money to Chrysler, GM, and by extension, Ford?

"Hey, we're GM, and we need seed money to develop a great new battery technology..."

*sounds of crickets*

Honda makes the same announcement, and would have to run to avoid being crushed by all the offers.

And GM would have trouble turning to the government again, after all their debts have been wiped out.

Believe it or not, Obama has been burning political capital and goodwill to get all these deals through, and the American people aren't going to be receptive to another 30 billion "loaned" to GM.

Not when we see GM opening more factories in Mexico and China after we've already been forced into loading them insane sums, rather than hiring US workers and reopening US factories (even if the financial numbers say it would be cheaper to build a new one in China).

The only positive outcome will be the death of the UAW if this all ends up failing like everyone seems to expect.

Anonymous said...

It's really simple. If I loan you money and then Mike comes along and forces me, at the point of a gun, to take only 30% payback, and then bullies you into giving the rest of what I loaned you to Jenny over there, then they have stolen my money and given it to Jenny. Tha fact that they used stock instead of dollars matters not at all.

The Supreme Court just made htis legal. Not tolerated. Not overlooked. Not "wink wink". They made it legal. A-OK.

That is why we say the rule of law is dead - because it has been set aside in favor of gangster tactics and favored groups. This is Stalin territory.

That's why it is bad.

Anonymous said...

More on why this is bad....

One could say that an economy is a side effect of the underlying legal system.

The US happened to have a fairly stable and predictable legal system (originally based on Common Law - precedent). That benefited members of such an economy in that they could plan their investments and understand their risks fairly well (predictability).

This gave the US a significant advantage in that the US economy attracted much capital from abroad as well as some of the best minds through the last several centuries. What that provided to you was an increasing standard of living (more below on how).

That predictability is now gone.

That means that foreign and domestic capital may not seek the safe haven of US Bond markets going forward. This in turn means that US companies will have to charge a higher interest rate to compensate investors for the increased risk from the possibility of gangster government intervention (Investors will likely seek other alternatives). Finally this will equate to fewer jobs in the US, fewer new inventions and fewer capital investments and a lower standard of living than would have otherwise been.

The very fabric of the US economy is being torn apart (its underlying legal system). We will sink into being a Banana Republic where by investments are hampered because participants don't know what the future will hold for their investments.

Take a trip to a 2nd or 3rd world nation and talk to people about what it takes to build a building or start a business and you will know what I mean.