Earlier this week, President Obama oversaw a marathon negotiating session which failed to produce an agreement to avert bankruptcy filing by Chrysler because a small number of preferred stockholders (according to reports, mainly hedge fund managers) held out. Following the all-night the administration annouced that the automaker was indeed going to enter bankruptcy. After that, the administration announced that the United Auto Workers (UAW) would command a majority stake in the company as it emerges from bankruptcy and that the hedge fund managers would in effect go to the back of the line to be paid from any assets sold off through the bankruptcy process.
My first reaction was that this arrangement tickled every progressive bone in my body. It was the fault of a few hedge fund managers after all, that the bankrupcty occurred in the first place. And hedge fund managers won't get much support from the public (I've not seen a survey on their popularity but I suspect that if there was one, hedge fund managers would likely score someplace between Dick Cheney and Bernard Madoff.) And giving the company to the union that represents the people who actually make the product, I mean what could be more progressive than that? The only thing that made it better to contemplate was to think of all the conservatives reading it and just putting their head in their hands and shaking it slowly back and forth. Sweet revenge for all the times I did that when the Bush administration did something by assertion that seemed way over the top.
On second thought though, there may be a reason why I had the same reaction then as conservatives have now. And it's a reason that should transcend partisanship, though we are where we are precisely because people with an agenda have used partisanship as one of several vehicles to drive that agenda. And that agenda is to empower the federal government, and in particular the executive branch, at the expense of the rule of law, civil rights and fundamental Constitutional rights.
To understand the danger, realize that whatever one may think of hedge fund managers, it is a long standing principle in contract law that the creditors of a company that is in bankrupcty court receive payment in a certain order. The hedge fund managers are what is known as preferred shareholders, meaning that legally they should be paid (which payment can be in shares of the new, post-bankruptcy company) before other shareholders (and certainly before the UAW.) That's not a matter of opinion, and I may consider it to be a grossly unfair arrangement (which I do) but it is nonetheless the law and it is not up to the President to rewrite the law and make changes in it. There is a way to make changes in the law, of course, which is to go through Congress, but Congress was not asked to vote on this.
And the fact of the matter is that if it is possible for the President to change the law by executive fiat and give a company to the union then what exactly prevents him or some future President from using exactly the same logic to seize your home and give it to the bricklayer, the gardener or the baby-sitter? The answer is that if this case is the precedent then there is nothing to prevent it.
Before conservatives think I'm with them on this though, I'd like to point out that this only continues a trend which has been ongoing for decades. With the singular exception of Jimmy Carter (during whose four years most of the civil protections from governmental overreach that we do have now were enacted) every President since Calvin Coolidge first appointed J. Edgar Hoover as FBI director in 1924 has pushed things in pretty much the same direction. Just to cite one recent example, some of you may remember the case of Jose Padilla, an American citizen who was accused of plotting to plant a 'dirty bomb' and held without being charged for years in a military prison in South Carolina. After losing several appeals over the whole issue of habeus corpus protection, the Bush administration finally found one judge who would rule in their favor. As soon as they did they immediately did file charges against Padilla (though they did not charge him with anything related to a 'dirty bomb') and eventually managed to get him convicted on a single count-- that he had been to Afghanistan for training--- even while failing to gain a conviction on more serious charges. They filed the charges when they did specifically to make sure that the case would not be appealed to the Supreme Court which might have sided with all the lower courts and overturned their 'precedent.'
Now, I'm sure some conservatives will argue that the Padilla case is somehow 'different' than the Chrysler case. But if fact it is not. Both involve the President asserting a new legal and Constitutional standard where there was not one before. And if you are a conservative that still thinks that Padilla precedent is a good thing, I'd ask you whether you still like the idea that the Obama administration now has the authority to detain, using secret evidence, any U.S. citizen they say is an 'enemy combatant' without charging them as a crime for as many years as they want to. Because they now do have that 'right' courtesy of the Bush administration.
And therein lies the rub. What has enabled a decades long assault on civil rights has been a mixture of always finding the right 'bogeyman' (nazis, communists, mobsters, left wing subversives, right wing militias, drug dealers, criminal gangs, foreign terrorists, child molesters, Wall street crooks-- all have had their turn to scare us into surrenduring some measure of civil liberty) and partisanship. Whether it was Democrats foolishly supporting Bill Clinton's post Oklahoma City domestic surveillance bill or Republicans supporting the Patriot Act and warrantless wiretaps during the Bush administration, no one has ever taken a moment to ask why the mountain of powers that have already been given to the Presidency isn't enough already.
And we have already forgotten that Clinton's raid on Waco was entirely legal-- because of Reagan's 'war on drugs' legislation that ensured that federal agents could just come in unannounced and start shooting if there were allegations that drugs were on the premises. Someone had made such an allegation (though it turned out be false) and that was all the legal justification that was needed to charge in with guns blazing away.
Instead of looking at this kind of stuff with a partisan hue, colored by the administration that is then in power (i.e. "Democrat good, Republican bad" or the reverse) maybe the right way to look at is is always to be skeptical.
The worst thing about any kind of expansion of Federal powers is that they will still be there for all future Presidents. And in this area, it seems that Democratic and Republican administrations have been literally pulling the rope together and all sending us sliding down the same slope, a slope that leads down to.... where? I don't know but I fear to contemplate it.
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