Bankruptcies involve dividing a shrunken pie. But not all claims are equal: some lenders provide cheaper funds to firms in return for a more secure claim over the assets should things go wrong. They rank above other stakeholders, including shareholders and employees. This principle is now being trashed. On April 30th, after the failure of negotiations, Chrysler entered Chapter 11. Under the proposed scheme, secured creditors owed some $7 billion will recover 28 cents per dollar. Yet an employee health-care trust, operated at arm’s length by the United Auto Workers union, which ranks lower down the capital structure, will receive 43 cents on its $11 billion-odd of claims, as well as a majority stake in the restructured firm.
The Wall Street Journal
While the rest of the world in 1787 was governed by the whims of kings and dukes, the U.S. Constitution was established to circumscribe arbitrary government power. It would do so by establishing clear rules, equally applied to the powerful and the weak.
Fleecing lenders to pay off politically powerful interests, or governmental threats to reputation and business from a failure to toe a political line? We might expect this behavior from a Hugo Chávez. But it would never happen here, right?
The Obama administration’s behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors — entitled to first priority payment under the “absolute priority rule” — have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.
Proponents of government-run health care like to point out that countries with such a system spend a smaller percentage of their gross domestic product on health care than the United States. What they don’t like to mention is how those savings are achieved. For example:
Patients Lose the Right To Decide What Treatment They’ll Receive. Instead, patients receive whatever care politicians and bureaucratic number crunchers decide is “cost effective.”
Britain’s National Institute for Health and Clinical Excellence usually won’t approve a medical procedure or medicine unless its cost, divided by the number of quality-adjusted life years that it will give a patient, is no more than what it values a year of life in great health – £30,000 (about $44,820). So if you want a medical procedure that is expected to extend your life by four years but it costs $40,000 and bureaucrats decide that it will improve the quality of your life by 0.2 (death is zero, 1.0 is best possible health, and negative values can be assigned), you’re out of luck because $40,000 divided by 0.8 (4 X 0.2) is $50,000. …
Breakthroughs in Life-Saving Treatments Are Discouraged. Countries with government-run health care save money by relying on the United States to pay the research and development costs for new medical technology and medications. If we adopt the cost-control policies that have limited innovation in other countries, everyone will suffer.
This is getting to be a habit. During the stimulus debate, President Obama exploited Caterpillar and spread exaggerated claims about the massive spending program’s effects on the manufacturer’s jobs. Caterpillar had to publicly refute Obama.
He’s moved on to his government health care takeover plans. And once again, the b.s.’er-in-chief is using private industry to float inflating promises about the massive spending program.
The health care companies have now publicly refuted Obama …
Anecdotal Democrat vs. Republican Differences, #5, 632
Democrats, in our experience, get involved in something because, on some level at least, they want to feel validated and feel important. We put ourselves in this category, because getting involved in causes coincided with many of us coming out and being rejected by families and friends. Taking part in Democrat-led volunteerism has always been a safe place for us to be welcomed, appreciated, and, actually, elevated to celebrated token status. ”This is Robby and Sebastian, and they are gay, isn’t that wonderful? This is Jorge and Xander, and they are part of the LGBTQ community and we are so glad to have them here to represent their community’s special and distinct views.”
When we go to Republican meetings for things like the USO or Special Olympics, we’re just Robby, Sebastian, Jorge, Xander, or whomever, and the special community ambassador nonsense is typically left off. Instead, Republicans tend to emphasis what we DO, in terms of jobs or skill set, whereas Dem groups focus on our sexuality and minority status.