BREAKING NEWS: Bain Capital Really, Really, REALLY Did Not Want to Lend GM and Chrysler Money For Their Managed Bankruptcies!”*
Subject: Re: Your story on Bain Capital, GM and Chrysler
**This appears to be incorrect. It was based on a story that CNBC has now updated. It was “Bain Consulting,” not Bain & Co., that advised the government on re-financing the automobile companies. — klh
Ah! Mystery Solved! Yesterday,in my post, “Crony Capitalism On A Grand Scale“—the title of the post borrowed from an op-ed piece by Romney in yesterday’s Detroit News characterizing the auto bailouts that way—I noted that Romney seems unaware that both companies filed for bankruptcy. Romney says, as apparently he says often when forced at gunpoint to explain his opposition to those bailouts, that he was for the idea of “managed bankruptcy” for both companies, and never actually acknowledges that that is what happened. Much less that these bankruptcies were “managed,” and therefore were able to emerge from bankruptcy as ongoing enterprises rather than as pieces of physical assets, machinery and the like, for a Bain Capital-owned company in the process of being restructured, to scavenge and resell.
This was a mystery to me. Sure, Romney regularly makes up facts to match Tea Party of Club for Growth ideology. But in Michigan,everyone—everyone—knows that GM and Chrysler went through formal bankruptcy proceedings. In court. How, I wondered, did he expect to get away with pretending that these companies didn’t go through managed bankruptcies?
Ah! Mystery solved! In an ABC News report last night by Chris Bury (a genuine news reporter,not a pundit disguised as one, and a long-ago favorite of mine from back when he was reporting for Nightline), illustrates the impact of the bailouts on Michigan’s economy, which is suddenly resurgent. And in the report, which is today’s Yahoo News highlighted ABC NEWS video, explains what Romney means by “managed bankruptcy.”
Turns out, he means, best as I can tell anyway, that private equity firms lend the corporation the money to get through bankruptcy, in exchange for ownership of the company after its emergence from bankruptcy. In the case of GM and Chrysler, many tens of billions of dollars. In an op[ed in the New York Times back then, he described the managed bankruptcy he had in mind as one in which the government would guarantee private loans, but it would not itself provide the financing. Which raises the question of how, exactly, this would have saved the government money, since the companies are repaying the government the loans to the extent possible.
But it also raises the question of Romney’s recommendation that the government play Russian Roulette with the auto industry. Bury’s report points out that Bush Administration officials who put together the initial bailout legislation recognized, as did the Obama administration officials who took over, that the chance was nil that private equity money in such large sums would be forthcoming. And why he conflates ideology with fact, even when the stated fact is baldly nonsensical. "If(automakers) get the bailout … you can kiss the American automotive industry goodbye," Bury’s report quotes Romney as saying in that New York Times op-ed. Destroying the industry by saving it?
Meanwhile, an editorial in today's Washington Post* says,in complaining about Obama's proposal to raise taxes on bailed-out banks in order (the editorial says) to cover the auto bailouts:
TARP was the price the country paid for a public good — financial stability — that the country needed. It's inconsistent for the president to hail the bailout of one private industry —autos — while playing politics with the bailout of another — banking — that was and is no less necessary to a modern economy. It compounds the inconsistency to demand that the latter pay for the former.
Apparently the [Post]‘s editorial board thinks GM and Chrysler caused the housing bubble and sold subprime mortgage-backed securities.
*The sentence has been corrected to say that the editorial is in today’s Washington Post. Originally, the sentence said incorrectly that the editorial is in today’s Wall Street Journal.
So what’s Romney’s point? Best as I can tell, adding the actual facts to the op-ed, it’s that Chrysler’s secured creditors, who would have been paid virtually nothing had the company dissolved, weren’t privileged over the employees, in the restructuring. This doesn’t sound to me like a serious plea for votes. Not from employees—even laid-off ones—anyway. And, since most of Chrysler’s secured creditors probably don’t vote in Michigan, not from the secured creditors either. But maybe they’ll attend his next fundraiser, to meet those lobbyists whom Romney will delegate his policymaking to.
An Invitation for Libertarians
Here at Angry Bear, we’ve had a number of posts on LIbertarians over the years. Inevitably, someone writes to tell us we’re misrepresenting Libertarians… even when we’re quoting well known libertarians.
So… if you are libertarian consider this an invitation. Send me one to three paragraphs on what it means to be a libertarian or what libertarianism is. Or put it in comments. (I beg the indulgence of non-libertarians to please not put up comments of their own.) If you feel what you are writing about applies particularly to one or another strain of libertarianism, please make that clear.
I will put up as a separate post, verbatim, those e-mails and comments I get sent that seem to me to best tell the libertarian story from the libertarian perspective to the slightly left of center audience that resides here at Angry Bear. (I can’t promise to print everything that comes in to avoid the sort of repetition that will simply detract from the story.)
Here’s your chance to have your story told in your words.
Part of an e-mail from Beverly Mann on additional expansion of corporate personhood concept at the Supreme Court:
I agree that, as the article at Raw Story says, the decision is a striking contrast to the court’s ruling in Citizens United, which upended decades of campaign finance regulation, allowing corporations to spend unlimited amounts on political campaigns without having to identify themselves.
Some commentators are amused by the last sentence of the final paragraph of Roberts’ opinion in the case. The paragraph reads:
We reject the argument that because “person” is defined for purposes of FOIA to include a corporation, the phrase “personal privacy” in Exemption 7(C) reaches corporations as well. The protection in FOIA against disclosure of law enforcement information on the ground that it would constitute an unwarranted invasion of personal privacy does not extend to corporations. We trust that AT&T will not take it personally.
The line strikes me as a nod to a hilarious Supreme Court Dispatch article that Dahlia Lithwick wrote in Slate, reporting on the oral argument in the case in January, in which she treated AT&T as an actual human and said “he” was in court that day to watch the argument.
But there’s really no mistaking that Roberts and some of the others are feeling burned by the massive criticism of the Citizens United opinion last year.
by Beverly Mann
Does the Tea Party Dislike Goodwin Liu?
Politico had an article last week called “Will Senate ever vote on Liu?” Liu is Goodwin Liu, a prominent liberal Constitutional Law professor at the UC, Berkeley. His official profile at the U. is here.
Obama nominated him in 2009 to the Court of Appeals for the Ninth Circuit, the appellate court for the west coast states, Arizona, Nevada and Hawaii, and by far the largest of the federal appellate courts. His Judiciary Committee hearing was held more than a year ago, and the nomination was voted out of that Committee more than a year ago but was never brought to a floor vote because Republicans planned to filibuster it. Obama renominated him early this year, and his Committee confirmation hearing was held yesterday. The Politico article says this time the nomination will be brought to a floor vote but that his confirmation is unlikely.
Liu, 39, has captured the hopes of liberals who see him as one of Obama’s few bold judicial picks, someone with the intellect and youth for the circuit court bench, a traditional stepping stone to the Supreme Court. But Republicans have argued that he lacks any judicial experience, his legal writings are proof of his intention to legislate from the bench, and his criticism of Supreme Court Judge Samuel Alito after he was nominated to the court revealed an inexperienced social activist who has no place on a federal bench.
The article says the Democrats and the Obama administration blame Senate gridlock, generally, on judicial nominees for the Senate’s earlier failure to confirm Liu, but “Republicans have suggested that Democratic leadership had been unwilling to take time on the Senate calendar in order to entertain a lengthy floor debate about Liu’s positions on controversial issues like affirmative action and the death penalty.”
Apparently what offends the Republican senators the most about Liu is that he testified against Samuel Alito’s confirmation to the Supreme Court in 2006, saying that Alito’s record as a federal appellate judge suggested that he “envisions an America where police may shoot and kill an unarmed boy to stop him from running away with a stolen purse … where a black man may be sentenced to death by an all-white jury for killing a white man.” Liu has retracted the comment and apologized for it, and said yesterday in his opening statement that it “was not an appropriate way to describe Justice Alito as a person or his legal views.”
He’s probably right that that statement was not an appropriate way to describe Justice Alito as a person or his legal views. The statement was, after all, about Samuel Alito, not Clarence Thomas. But the fact remains that Alito, like Thomas, selects a (very) few constitutional rights that he votes to interpret broadly, almost always those that are part of the rightwing political agenda, circa 1985, and, like Thomas, votes to effectively decimate the other constitutional rights, certainly when it comes to the rights of criminal defendants, but also concerning the rights of others. (Unlike Thomas, Alito and his spouse haven’t claimed intellectual-property rights to “Liberty.”)
The Politico article quotes Rep. Judy Chu (D-Calif.), chair of the Congressional Asian Pacific American Caucus as saying, “We will have to work very, very hard on his behalf and I know that Goodwin Liu is intending to meet with every senator that he can. I hope that through his one to one meetings people will see how reasonable and measured he is, and he can get enough support so that he can break through cloture.”
But Chu and the White House should focus their efforts as well on noting that Liu, unlike Alito, is a strong civil libertarian in most respects, not just the respects that rightwing ideology dictates, and certainly not just in the respects that Reagan-era rightwing ideology dictates. And although Washington has yet to recognize this, the two—Tea Party ideology and Reagan-era rightwing ideology—diverge significantly, at least in theory, on many legal issues, including concerning the issues that they really care about.
I mean, how many Tea Partiers really care one way or the other about the death penalty? Or, for that matter, about affirmative action? What they do care about is civil liberties, generally, not just a few select ones.
So moderate Republican senators who vote for cloture on Goodwin Lui’s nomination probably won’t be defeated by a Tea Party candidate in a primary election because of that cloture vote. If it’s mentioned at all, say in a TV ad by some private group (the Koch crowd, maybe?), the senator could simply respond that Liu is a libertarian.
And, if necessary, that Alito is almost entirely not.
Beverly Mann maintains her own blog at the Annarborist