Obama’s Unconstitutional, Totalitarian Thuggery on Chrysler

Posted by Bill Dupray on May 4 2009 Filed under Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Liberals and other assorted Obama butt-kissers will want to shield their eyes. This is not going to be pretty.

As you may have heard, and as we discussed in last week’s podcast, Obama is trying to strongarm Chrysler’s secured creditors into giving up their claims, “for the best interest of the State.”

From Financial Times.

An Obama administration official said: “It is neither in the interest of Chrysler’s senior lenders nor the country for them to advance a proposal that would yield them an unjustified return …

Since it is very much in the creditors’ interest to get exactly what they bargained for, the very essence of a justified return, the only real reason the White House is giving is that it is good for the country.

In bankruptcy, the unsecured creditors (think personal loans and credit cards – non-collateral loans) get pennies on the dollar or less. Secured creditors, on the other hand, have their loans secured by specific pieces of property and equipment (the bank has a secured loan on your car, for example). In a bankruptcy, these creditors may not get everything they are owed, but they do get the property they bargained for. These lenders often have what is called a Purchase Money Security Interest (also known as a PMSI, pronounced “pimsee”), and it represents money received by the debtor without which the purchase could not have been made.

Against that background, we have Barack Obama, the President of the United States, trying to seize this private property as property of the State and give it to the UAW to use in the New Chrysler. This, of course, is an unconstitutional taking of private property for private use under the 5th Amendment. And the creditors’ lawyers are taking him to court over it.

From the brief (citations omitted), via Hot Air.

The Supreme Court long ago recognized, however, that a secured creditor’s interest in specific property is protected in bankruptcy under the Fifth Amendment. . . .

Justice Brandeis noted that the “essence of a mortgage” is the right of the secured party “to insist upon full payment before giving up his security [i.e., the property pledged].” . . .

Relying on purported authority provided by TARP, the Treasury Department is demanding that Chrysler’s assets be stripped away from the coverage of the Senior Lenders’ liens – thereby impairing the rights of the Senior Lenders to realize upon those assets – so that those assets may be put in New Chrysler and used to the benefit of unsecured creditors in this proceeding, who will then be paid much more than the Senior Lenders. . . .

Finally, that the Treasury Department would take these unconstitutional actions to help the United States address difficult economic times is not an answer. Indeed, the same justification was expressly rejected in Radford, where Justice Brandeis noted that a statute which violated secured creditors’ rights, but which was passed for sound public purposes relating to the Great Depression, could not be saved because “the Fifth Amendment commands that, however great the nation’s need, private property shall not be thus taken even for a wholly public use without just compensation.”

Let’s not sugar-coat this. Barack Obama is doing what Communist and Fascist governments have done throughout history, take whatever they want from the people, with the rationale that it is “good for the State.” The Founding Fathers, who knew a thing or two about despotism, drafted the 5th Amendment to protect us from people just like Barack Obama. Despots don’t pay attention to things like constitutions. They pay them lip-service, pretend what they are doing is legal, and do whatever they want.

The only thing that can save us from Obama’s shredding of the Constitution is hope and a prayer that whatever judges hear this case follow Supreme Court precedent and slap Obama down. Even then, characters like Obama will keep coming and try again and again, until they succeed. Until some of our elected officials or members of the media wake up and put a stop to this madness, he will keep coming for us.

What other folks are saying:

Megan McArdle: Should I worry about Chrysler?

Share

Save

Related Posts

1. Emergency Filing: Chrysler Creditors Take Obama to Supreme Court
2. Noted Auto Expert Barack Obama Cuts Chrysler Ad Budget in Half
3. Chrysler To Close All 30 Manufacturing Plants for a Month
4. Ginsburg blocks Chrysler sale – for now
5. Ford Uses Government Restrictions on GM and Chrysler to Gain Edge

Short URL: http://libertypundits.net/?p=3941