Obama administration's decision to force bondholders to accept 33 cents on the dollar on secured debts while giving United Auto Worker retirees 50 cents on the dollar on unsecured debts.
This was a clear violation of the ordinary bankruptcy rule that secured creditors are fully paid off before unsecured creditors get anything. The politically connected UAW folks got preference over politically unconnected bondholders. "We have just seen an episode of Gangster Government," I wrote. "It is likely to be a continuing series."..
…The Dodd bill … provisions promise to give us one episode of Gangster Government after another.
Politically connected creditors would have every reason to assume they'd get favorable treatment. The Dodd bill specifically authorizes the FDIC to treat "creditors similarly situated" differently.
This is a Chicago politicians dream – having legal authority in intervene at will combined with the authority to deliberately show favoritism. This thing become law and President Obama becomes Don Obamoni, Boss of Bosses.
This is what we get – what we deserve. We took a man who rose out of that sewer known as Chicago politics and installed him in the White House…even if he's personally honest, he's certain to be surrounded by corruption…and those people will do what they can to ensure their long term power and wealth.
As I've been saying, we're in for a rough time while Obama is President.