The Liberal Lie, The Conservative Truth

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HISTORICAL QUOTE OF THE WEEK - "Always bear in mind that your own resolution to succeed is more important than any other." ABRAHAM LINCOLN

Wednesday, May 13, 2009

OBAMA VIOLATES SEPERATION OF POWERS

With the massive amount of activity that has taken place during the four months since Barack Obama took office in January, few questions have been asked concerning whether what is being done violates the Constitution. There have been a sprinkling of stories that bring up certain aspects of Constitutional violation and it has been brought up occasionally on talk shows, but a real discussion of Constitutional violations has been neglected.

Rather than try and touch on the many specific areas where there are Constitutional questions this post will discuss the most recent violation which has occurred with the bankruptcy of the Chrysler Corporation. There is clearly a violation of the separation of powers in the Constitution as far as the Judicial Branch and the Executive Branch in the way that the bankruptcy has been handled.

Let me explain. When a company files for bankruptcy protection they are requesting that the court through legal channels provide protection from creditors as the company attempts to restructure under the bankruptcy protection. The courts also work with company in bankruptcy with the restructuring, providing legal decisions to better use company assets etc. in paying off debt and rebuilding the company so that it may once again become a viable profit making entity.

The bankruptcy of Chrysler has been handled by the task force that was appointed by Barack Obama. This task force at the behest of the President has through pressure being brought to bare forced stock holders to take 29 cents on the dollar in return for their investment while giving the UAW a much higher return and a 55% controlling interest in the corporation.

Additionally news came out that Chrysler had budgeted 134 million dollars for advertising while in bankruptcy and the task force cut that budget in half. Whether Chrysler spends 134 million or 67 million for advertising is not the point. The point is where in the Constitution does the Executive Branch have the authority to control anything that is under the jurisdiction of the Judicial Branch as is the case when a company is in bankruptcy ?

It is not the responsibility nor does the Obama administration have the Constitutional authority to negotiate, restructure, decide stock options and who and how much stock holder are payed for their investment, or decide budgetary matters with any company seeking or within the perimeters of bankruptcy protection because it is strictly a Judicial matter and as such is Constitutionally handled by the courts and not the White House.

Nowhere in the Constitution does it allow the Executive Branch any authority in Judicial matters except the Presidential authority to appoint judges to all levels of the Federal Court System. Beyond that authority the President, a Presidential task force nor any other entity within the Executive Branch are Constitutionally allowed to delve into Judicial matters.

The Executive Branch can like any citizen present a case before the courts but cannot assist in the control and structuring of a bankruptcy as the Obama administration is doing with the Chrysler situation. Every aspect of a bankruptcy is a Judicial matter working with the particular company seeking protection. Yet the Obama administration is clearly over stepping Constitutional authority and violating the separation of powers by controlling all aspects of the Chrysler bankruptcy.

Where is the out cry about this Constitutional violation ? The lock step love affair of the media with Obama has not even questioned this clear violation. The courts have not questioned the violation. Yet the violation is real and over stepping greatly the Constitutional bounds separating the powers of each Branch of the Federal Government.

How long will Constitutional outrages like this be allowed to continue and Obama's complete and utter disregard for our Constitution finally be challenged and his violations be brought before the courts and the public for the legal scrutiny they demand? Or will everyone just sit back and allow Obama to control the courts in the same way that Hugo Chavez has taken control of the court system in Venezuela !

Ken Taylor

10 Comments:

Blogger Rob said...

Ken, I had to laugh at this posting. It is clear you have no fundamental understanding of what is happening at Chrysler or how Chapter 11 works.

Chrysler is a privately held company that is owned by Cerberus Capital. The private hedge fund firm could not make Chrysler profitable, lost tens of billions in investor money, and billions in taxpayer money was required to save the firm from complete destruction.

To save Chrysler - the ONLY buyer/investor who was willing to work with Chrysler was Fiat. THERE WAS/IS NO OTHER OPTION, so the choice is to either work out a deal with Fiat or allow the firm to be liquidated.

Fiat worked with the UAW and they made significant concessions that were accepted by Fiat. The shareholders got wiped out (common shareholders get nothing in bankruptcy). The bondholders refused to work out a deal with Fiat - they wanted Obama to give more taxpayer money so they could recoup more of their bad bets on Chrysler. So Chrysler went into bankruptcy. At that point, the private bondholders became public and they realized that the federal judge was siding with Fiat on the deal - THAT ALMOST ALWAYS HAPPENS IN CHAPTER 11 PROCEEDINGS. They accepted the deal that was offered by Fiat in court.

Unless you wanted more taxpayer money to be given to private bondholders, or you wanted Chrysler to be liquidated so bondholders could possibly get more than 30 cents on the dollar (although it is likely it would have been even less with liquidation), I don't know what you are whining about.

11:52 AM, May 13, 2009  
Blogger The Liberal Lie The Conservative Truth said...

So you think that the task force pressuring sock holders inot taking 29 cents on the dollar in favor of a larger share for the UAW is not strpping over the bounds ?

You believe that the task force under the Executive Branch deciding an advertising budget for a privatly held company in bankruptcy is not over stepping the bounds.

Since when does the Executive Branch handle anything in a bankruptcy ? The Judicial is the court and the court handles bankrupties, period.

Regardless of the how the bankruptcy is structured or whether Fiat is in the picture or not there is NO Constituional authority allowing the Executive Branch to interfere with proceedings, whether they are negotiations or structure of the Chapter 11. It is clearly a responsibility of the Judicial and the privately held company which in this case is Chrysler.

Additionally I have stated before that the government had no business putting money into either Chrysler of GM in the first place. That was under Bush and I disagreed with it then also. But stepping in and controlling the bankruptcy and break up of the company is a violation of Constituional authority.

BTW the two options available for Chrysler was the merger with Fiat or bankruptcy. Either way Obama had no business even neing involved much less using the Executive Branch as a mediatior whic in actuality dictated the terms of the bankruptcy. That is up to the courts and not The White House. That is not, "whining," it is a fact and a Constituional violation!

12:06 PM, May 13, 2009  
Blogger Rob said...

Common stockholders get nothing in bankruptcy Ken - NOTHING! When a firm goes into bankruptcy all the common equity shareholders get wiped out.

Chysler was not a publicly traded company so there were no common equity shareholders to worry about. You are confusing bondholders with shareholders. The bondholders of Chrysler got a heck of lot more than the bondholders of GM are going to get - only because GM's debt load is far, far worse. Before any government intervention, GM was sitting on $60 billion in debt. We don't know the full amount that Chrysler owed because it was privately owned.

In any event, the only reason Chrysler is going to survive and merge with Fiat is because of the government intervention by Bush and Obama.

The idea that the Executive Branch helping to save Chrysler is a Constitutional violation is just a joke. Federal mediators assigned Presidents to work out issues in the private sector are nothing new. There is a Federal Mediation & Conciliation Service (FMCS) that is part of the Executive Branch. It has been there since 1947.

Presidentially appointed mediators are assigned all the time, whether it is in the railroad industry, the mining industry, airline industry, car industry, etc. It has happened for decades under both Dem and Republican administrations.

But if you want to stand on a soapbox and whine about what Obama is doing, I'm not stopping you. I just find it funny.

2:07 PM, May 13, 2009  
Blogger Gayle said...

Read the Constitution, Rob. Ken's right. The Executive Branch was never supposed to be involved in private enterprise! That is not the reason our government was formed. Although I don't know why I'm bothering to argue with you. I'm sure whatever Obama does is okey dokey with you and violating the Constitution simply isn't important, is it?

So when we tell the truth as we see it were "whining", but when liberals go off on tangents on our blogs they aren't whining? That's so typical!

9:19 AM, May 14, 2009  
Anonymous Brad said...

It's apparent that Rob doesn't understand the concept of APR. Equity holders are last on the pecking order, but it doesn't mean they don't get paid back. They never get paid back, but there still is the possibility. Even though Chrysler was not publicly traded, it is/was owned by a private equity firm. It's called private equity for a reason. As far as the debt is concerned, Obama chucked out the sanctity of contracts, shafting bondholders with the Chicago style bargaining tactic of "you take this or you take nothing." Personally, I'd rather have 27% than 0%, wouldn't you?

The amount of senior debt outstanding is a moot point, seeing as how Obama forgot about the "senior" part and rewarded the UAW for...I'm still trying to figure out what that union does except put automakers out of business. It's entertaining to watch someone with a business degree from a non-accredited school trying to argue for the Obama administration's blatant disregard for the U.S. Constitution's separation of powers clause. Rob, are you a member of a union? I only ask because you bring up the FMCS, which is not part of the Executive Branch. It was created via Executive Order, but that doesn't mean that it's part of the Executive Branch. Wars (overseas contingency operations) have been started via Executive Order; are wars part of the Executive Branch, Rob? Presidential mediators did not "intervene." Plain and simple, the President shafted thousands of Americans in order to appease his union supporters. No CEO has ever been personally fired by a sitting U.S. President. Never in the history of the United States have we seen this type of government intrusion into the private sector.

Rob, you're demonstrably ignorant regarding the principles of finance, bankruptcy law, contract law, and the structure of the federal government. Basically everything you've stated is either stretching the truth or outright wrong. Rob, I suggest you read a magazine other than Newsweek and watch REAL news (not The Daily Show). I also find it entertaining how you rationalize the government's intrusion into other people's personal lives (their retirement accounts). What happens when Obama siphons away your retirement money and throws it to his union pals? Are you going to finally be angry or will you rationalize that as well? As I write this, Congress is preparing a Constitutional violation beyond anything we've ever seen. It's almost like Democrats see the Constitution as a piece of paper, a mere "bump in the road to socialist utopia" rather than a legally binding document. Chairman Mao made it onto the White House Christ...err, holdiday tree this year. Wake up people, especially Obama supporters.

7:25 PM, December 23, 2009  
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