Obama Declares War on Capital

Obama Declares War on Capital
By the Editors of National Review Online

Obama’s first 100 days have occasioned a number of dispiriting moments, but yesterday’s attack on Chrysler’s bondholders represented a new low. In a speech announcing the company’s bankruptcy filing, President Obama blasted “a group of investment firms and hedge funds [that] decided to hold out for the prospect of an unjustified taxpayer-funded bailout.” That is nothing short of a lie. The consortium wasn’t holding out for a bailout. It was holding out for a bankruptcy. 

The administration tried desperately to keep Chrysler out of bankruptcy court; in the process, it demonstrated exactly why that institution is so valuable. Obama’s auto task force attempted to browbeat Chrysler’s creditors into taking a terrible deal in order to spare the United Auto Workers union as much pain as possible. The large banks, which owe their continued existence to the $700 billion Troubled Asset Relief Program (TARP), caved and agreed to take a massive haircut on their secured Chrysler debt. But a group of smaller firms, calling themselves “The Committee of Chrysler Non-TARP lenders,” refused to play ball.

In a statement released yesterday, the firms pointed out that they would be shirking their fiduciary duty to their investors if they did not hold out for the best possible deal. For them, the best deal is bankruptcy. In bankruptcy court, secured debtholders take priority over other creditors. The administration’s plan called for secured lenders to get in line behind the UAW.

For resisting this expropriation and following the law, the non-TARP lenders were publicly denounced as vicious Benedict Arnolds by a sitting American president. “I stand with Chrysler’s employees and their families and communities,” Obama said — not “those who held out when everybody else is making sacrifices.” He stands, he said, “with the millions of Americans who own and want to buy Chrysler cars.” If millions of Americans wanted to buy Chrysler cars, the company wouldn’t need the president of the United States to be its pitchman. 

Liberals took their cue from the president and immediately denounced the holdouts as “vultures,” too consumed with greed to think of the national interest. But the law compels these firms to act in their shareholders’ interest. Bank of America’s Ken Lewis ignored this responsibility and paid the price. Henry Paulson and Ben Bernanke all but forced Lewis to go ahead with the acquisition of Merrill Lynch even after he learned that the firm was in deep trouble. Lewis finally broke his silence this month, and Bank of America’s shareholders promptly stripped him of his chairmanship. 

There is also a double standard at work. The rule of law was extremely important to these industrial-policy Jacobins when the telecoms were in the dock for cooperating with the Bush administration’s terrorist surveillance program. They wrongly argued that the telecoms broke the law, and they weren’t impressed by arguments that the program had yielded valuable intelligence. Apparently, the law is more flexible when bending it might yield a marginally better economic outcome for an interest group that worked very hard to get the president elected. National interest, indeed. 

From the beginning, we’ve argued that GM and Chrysler should land in bankruptcy court. Instead, the Bush administration gave them a temporary crutch and sent them hobbling into the Obama administration. With their powerful unions and poor prospects, the automakers posed a thorny problem for Obama; he solved it by making the bondholders an offer they had to refuse. Now Obama has his scapegoat, and investors have another reason to mistrust the U.S. as a destination for capital. 

National Review Online – http://article.nationalreview.com/?q=ZmNjM2Y4YmM4YTIyYWJkNGU1ZDE4YjgyOWY5NGYyNWI=

First Lady Michelle Obama steps out in Lanvin sneakers and they’re only $540!

First Lady Michelle Obama steps out in Lanvin sneakers and they’re only $540!

Friday, May 1st 2009, 9:25 AM

The kicks, made by high-end French fashion label Lanvin, cost $540. Ernst/Reuters

The kicks, made by high-end French fashion label Lanvin, cost $540.

Speaking of sneakers

What do you think of Michelle Obama’s $540 sneakers?

They’re in poor taste. That’s way too much to spend on sneakers, especially in a recession.

The First Lady should look good, and she can afford it. If the sneakers make her happy, there’s nothing wrong with it.

Michelle Obama has taken casual to a haute new level.

While volunteering Wednesday at a D.C. food bank, the First Lady sported her usual J.Crew cardigan, a pair of utilitarian capri pants and, on her feet, a sneaky splurge: trainers that go for $540.

That’s right: These sneakers – suede, with grosgrain ribbon laces and metallic pink toe caps – are made by French design house Lanvin, one of fashion’s hottest labels. They come in denim and satin versions, and have been a brisk seller all spring.

They’re out of stock at posh Meatpacking District boutique Jeffrey, and Barneys New York boasts a limited selection of the sneaks, which are a cult favorite among fashionistas.

It’s likely Michelle got hers through Ikram, the Chicago retailer that often outfits her.

“They’re shoes,” the First Lady’s reps sniffed when curious reporters inquired about the fancy footwear.

Michelle has stepped out in Lanvin before while getting down to business. A week ago, she shoveled dirt at a tree planting while wearing the line’s chiffon tank.

Dresses and strappy pumps cost upward of $1,500, while tops go for $400 to $1,000.

Other celebrity fans of Lanvin’s costly kicks include Ellen DeGeneres and Kanye West, who has blogged about his faves.

As the family’s primary dog walker, Michelle clearly requires comfortable footwear.

“I got up at 5:15 in the morning to walk my puppy,” she joked Thursday. “That’s how my day starts. Even though the kids are supposed to do a lot of the work, I’m still up at 5:15 a.m. taking my dog out.”

She’ll be trodding on New York‘s sidewalks Tuesday for the first time as First Lady. Michelle will meet with staff at the U.S. mission to the United Nations. Later, she headlines Time magazine‘s “100 most influential people” gala.


With Kenneth R. Bazinet