UPDATED – Chrysler: Government Fail April 30, 2009
Posted by Jehuda in Uncategorized.Tags: Economics, Money, News, Politics
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After many fits and starts, it’s finally happened: Chrysler is filing for bankruptcy.
Some will blame it on “greedy” lenders, some will blame it on clumsy Chrysler management, but I just heard Rush point out one important fact: President Obama said that only the federal government was big enough to solve our domestic automaker’s problems. And now here we are: government has failed.
Was Obama lying? Was he simply wrong about government’s capabilities? Or is it just that his car czars dropped the ball? Given that one of them is under investigation for alleged pension plan irregularities, maybe that’s to be expected.
Hey, at least Obama supporters the United Auto Workers now will own a big chunk of whatever is left of Chrysler…or Fiat…or Fiatsler or whatever it’s gonna be called now. They can celebrate this failure. Chrysler’s shareholders and its creditors, not so much.
By the way: happy 100 Days, Mr. President!
UPDATE: Putting all the blame on hedge funds. Get a grip, folks. I doubt very much it’s all their fault. As lenders, the hedge funds here had no role whatsoever in Chrysler’s management and the bad choices that put the company where it is today (including the insane deals it made with the UAW). Besides, even a liberal journalist will tell you that hedge funds didn’t destroy the economy.
Will hedge funds necessarily get a better deal in bankruptcy than any other lender? No, because secured lenders get top priority in bankruptcy.
Finally, if you had lent your clients’ money to Chrysler and you were hurting for cash like most other financial instititutions in America today, you wouldn’t be as generous with Chrysler either.
