On one side are those corporations and financial firms dependent on government support, and thus eager to obey the diktat of their political minders. They are part of Obama, Inc., a vast public-private entity pursuing a vision of a greener, more constrained, and politicized capitalism.
On the other are those firms that aren’t on a government lifeline and thus can pursue the traditional capitalist imperative of maximizing value for their shareholders and investors. They constitute the liberated economy, but can be forgiven for sometimes feeling as embattled as the forces of the Free French circa 1941.
Consider the self-described “Committee of Non-Tarp Lenders” in the Chrysler bankruptcy negotiations. They are those creditors that loaned funds to Chrysler — the government-supported automaker — without themselves taking government bailout funds like Chrysler’s other, much larger lenders.
When the Obama administration came to Chrysler’s creditors and told them to accept a deal giving the United Auto Workers 55 percent of the company while they took a bath, all the banks that had accepted TARP funds duly said “yes.” Citigroup and Goldman Sachs, which wouldn’t exist but for the generosity of Hank Paulson and Timothy Geithner, knew they were expected to salute smartly. The smaller, non-TARP lenders — mostly hedge funds — stood by their contractual rights as “senior creditors” to be paid back first if Chrysler went under.
Wrong answer. A lawyer for the non-TARP creditors says that during negotiations, the leader of Obama’s auto task force threatened one of the lenders with exposure and attack by the White House press corps. The administration denies the story, although the gist rings true. When negotiations fell through and Chrysler headed to bankruptcy court, Obama angrily denounced the non-TARP lenders: “I don’t stand with them.” Michigan Rep. John Dingell called them “rogue hedge funds” and “vultures.”
The real vulture is the UAW. In a neat trick that any scavenging bird would envy, it bankrupted Chrysler through the years and now will be awarded whatever is left of the carcass. Providing ground troops for the president’s election and giving his political party $25 million during the past decades makes the UAW effectively the senior creditor at every government-sponsored negotiation. It will own a company making government-approved environmentally correct cars.
The offense of the hedge funds was only to lend Chrysler the money it wanted to try to keep itself afloat and then insist their contracts be honored. Such is the roguish, out-of-control behavior of firms that haven’t sucked up billions in taxpayer funds to cover over their massive business miscalculations. The number of holdout non-TARP lenders dwindled from 20 to nine as the date for their public revelation — and yet more presidentially approved obloquy — neared. Intimidation works.
Democrats pride themselves on their independence from business, but industrial policy depends on working hand and glove with industry. The more government regulates, subsidizes, and intervenes, the more subject it is to capture by economic interests and vice versa. Is it a coincidence that two of the actors that have arguably benefited most from government activism in the past year — the auto unions and Goldman Sachs — are extremely well-connected players in Washington?
The just-released stress tests of the banks present an opportunity. The tests draw a line between healthy and still-rickety financial institutions. The healthy ones should be urged — no, required — to give back their TARP funds as quickly as possible. Meanwhile, a mechanism should be created to seize and unwind those shakier institutions that can’t raise the necessary new capital on their own. It’s not last fall, when it seemed another collapse of a major financial institution might take the financial system with it. If bankruptcy is good enough for Chrysler, it should be good enough for Citigroup.
The alternative is for the marginal banks to stumble along as government-supported zombies and as slush funds for crony capitalism. Let them go, and instead increase the ranks of the liberated economy.
I'm old, white, and male. Three strikes and I'm out - disqualified, according to today's identity police, from having any legitimate opinions or making any pronouncements about race in an increasingly race-obsessed presidential campaign.
Welcome, friends! It's time once again for that fabulous game show: "App or No App!" The show where you decide if the app (short for application because that is way too long of a word) is real or not real. Today we explore the wonderful world of Facebook apps! Join us, won't you?
When it comes to the pantheon of Hoosier sports heroes - Johnny Wooden, Knute Rockne, Bob Knight, Larry Bird, Reggie Miller, Rick Mount, Bobby Plump, George Gipp - the newest name will certainly be Peyton Manning.
I realize this is a sentiment usually expressed by people who wear colanders on their heads in order to keep the CIA from reading their thoughts. That, of course, is just ridiculous. The CIA does not read people's brain waves. Queen Elizabeth does.
Mitt Romney summoned all the righteous indignation he could muster after a Newt Gingrich ad called him "anti-immigrant." Romney blasted the ad shortly afterward in an interview: "It's just inappropriate."
The city where I hang my shingle, or would if I did something shingleworthy, is all abuzz with excitement over the SuperDuper Bowl, which is coming to town one of these days soon. I forget which.
Have you heard anyone say it lately? I'm guessing you have. I'm guessing everyone within a 100-mile radius of Indianapolis has heard it many times over the past month and will probably hear it a zillion times over the next week. I just hope there are no casualties.
Rich Lowry and Brian Howey have each had commentaries in the Hendricks County Flyer that were a great PR job for Gov. Mitch Daniels. However, the recent Indiana unemployment drop from 10.5 percent to 9.8 percent was probably the result of the Bush and Obama bailout of GM and Chrysler, discouraged job applicants dropping out of the labor force (100,000 manufacturing jobs were eliminated since Daniels' election and prior to the financial/banking crises in 2008), imported cheap foreign labor (some who are illegal), and the Obama stimulus ($11 million in Hendricks County instead of collecting impact fees on new development) including energy grants and tax cuts for the middle class.
Commentary
The liberated economy
BY RICH LOWRY
American capitalism is a house divided.
On one side are those corporations and financial firms dependent on government support, and thus eager to obey the diktat of their political minders. They are part of Obama, Inc., a vast public-private entity pursuing a vision of a greener, more constrained, and politicized capitalism.
On the other are those firms that aren’t on a government lifeline and thus can pursue the traditional capitalist imperative of maximizing value for their shareholders and investors. They constitute the liberated economy, but can be forgiven for sometimes feeling as embattled as the forces of the Free French circa 1941.
Consider the self-described “Committee of Non-Tarp Lenders” in the Chrysler bankruptcy negotiations. They are those creditors that loaned funds to Chrysler — the government-supported automaker — without themselves taking government bailout funds like Chrysler’s other, much larger lenders.
When the Obama administration came to Chrysler’s creditors and told them to accept a deal giving the United Auto Workers 55 percent of the company while they took a bath, all the banks that had accepted TARP funds duly said “yes.” Citigroup and Goldman Sachs, which wouldn’t exist but for the generosity of Hank Paulson and Timothy Geithner, knew they were expected to salute smartly. The smaller, non-TARP lenders — mostly hedge funds — stood by their contractual rights as “senior creditors” to be paid back first if Chrysler went under.
Wrong answer. A lawyer for the non-TARP creditors says that during negotiations, the leader of Obama’s auto task force threatened one of the lenders with exposure and attack by the White House press corps. The administration denies the story, although the gist rings true. When negotiations fell through and Chrysler headed to bankruptcy court, Obama angrily denounced the non-TARP lenders: “I don’t stand with them.” Michigan Rep. John Dingell called them “rogue hedge funds” and “vultures.”
The real vulture is the UAW. In a neat trick that any scavenging bird would envy, it bankrupted Chrysler through the years and now will be awarded whatever is left of the carcass. Providing ground troops for the president’s election and giving his political party $25 million during the past decades makes the UAW effectively the senior creditor at every government-sponsored negotiation. It will own a company making government-approved environmentally correct cars.
The offense of the hedge funds was only to lend Chrysler the money it wanted to try to keep itself afloat and then insist their contracts be honored. Such is the roguish, out-of-control behavior of firms that haven’t sucked up billions in taxpayer funds to cover over their massive business miscalculations. The number of holdout non-TARP lenders dwindled from 20 to nine as the date for their public revelation — and yet more presidentially approved obloquy — neared. Intimidation works.
Democrats pride themselves on their independence from business, but industrial policy depends on working hand and glove with industry. The more government regulates, subsidizes, and intervenes, the more subject it is to capture by economic interests and vice versa. Is it a coincidence that two of the actors that have arguably benefited most from government activism in the past year — the auto unions and Goldman Sachs — are extremely well-connected players in Washington?
The just-released stress tests of the banks present an opportunity. The tests draw a line between healthy and still-rickety financial institutions. The healthy ones should be urged — no, required — to give back their TARP funds as quickly as possible. Meanwhile, a mechanism should be created to seize and unwind those shakier institutions that can’t raise the necessary new capital on their own. It’s not last fall, when it seemed another collapse of a major financial institution might take the financial system with it. If bankruptcy is good enough for Chrysler, it should be good enough for Citigroup.
The alternative is for the marginal banks to stumble along as government-supported zombies and as slush funds for crony capitalism. Let them go, and instead increase the ranks of the liberated economy.
(c) 2009 by King Features Syndicate
I'm old, white, and male. Three strikes and I'm out - disqualified, according to today's identity police, from having any legitimate opinions or making any pronouncements about race in an increasingly race-obsessed presidential campaign.
February 7, 2012
Welcome, friends! It's time once again for that fabulous game show: "App or No App!" The show where you decide if the app (short for application because that is way too long of a word) is real or not real. Today we explore the wonderful world of Facebook apps! Join us, won't you?
February 6, 2012
When it comes to the pantheon of Hoosier sports heroes - Johnny Wooden, Knute Rockne, Bob Knight, Larry Bird, Reggie Miller, Rick Mount, Bobby Plump, George Gipp - the newest name will certainly be Peyton Manning.
February 6, 2012
You have to be careful what you say these days.
I realize this is a sentiment usually expressed by people who wear colanders on their heads in order to keep the CIA from reading their thoughts. That, of course, is just ridiculous. The CIA does not read people's brain waves. Queen Elizabeth does.
February 3, 2012
Mitt Romney summoned all the righteous indignation he could muster after a Newt Gingrich ad called him "anti-immigrant." Romney blasted the ad shortly afterward in an interview: "It's just inappropriate."
February 3, 2012
The city where I hang my shingle, or would if I did something shingleworthy, is all abuzz with excitement over the SuperDuper Bowl, which is coming to town one of these days soon. I forget which.
January 31, 2012
A man once said, "those who don't learn from the past are doomed to repeat it."
January 31, 2012
President Barack Obama is making his re-election about raising the taxes of an Omaha billionaire who is volunteering for the honor.
January 31, 2012
"Have a super day!"
Have you heard anyone say it lately? I'm guessing you have. I'm guessing everyone within a 100-mile radius of Indianapolis has heard it many times over the past month and will probably hear it a zillion times over the next week. I just hope there are no casualties.
January 27, 2012
Rich Lowry and Brian Howey have each had commentaries in the Hendricks County Flyer that were a great PR job for Gov. Mitch Daniels. However, the recent Indiana unemployment drop from 10.5 percent to 9.8 percent was probably the result of the Bush and Obama bailout of GM and Chrysler, discouraged job applicants dropping out of the labor force (100,000 manufacturing jobs were eliminated since Daniels' election and prior to the financial/banking crises in 2008), imported cheap foreign labor (some who are illegal), and the Obama stimulus ($11 million in Hendricks County instead of collecting impact fees on new development) including energy grants and tax cuts for the middle class.
January 27, 2012
Follow me on Twitter
Has Indianapolis done a good job of hosting the Super Bowl?
Powered by Local.com
Powered by Local.com
Site Map
© 2012 Community Newspaper Holdings, Inc. · CNHI Classified Advertising Network · CNHI News Service
Associated Press content © 2012. All rights reserved. AP content may not be published, broadcast, rewritten or redistributed.
Our site is powered by Zope. Some parts of our site may require you to download the Flash Player Plugin.
Privacy Policy | AP News Registry privacy policy
Advertiser Index
Hendricks County Flyer, Avon, IN 8109 Kingston St., Suite 500 Avon, IN 46123