Oppose the criminal enterprise of organized labor unions.
In a Chapter 11 bankruptcy filing, bondholders stand first in line to receive payment on the debt they are owed. This is not because they are greedy, or uncaring, or more deserving, or possessed of more compelling personal histories than other stakeholders. It is because the primacy of their claim was explicit in the terms by which they agreed to lend the money they are now owed. It is a matter of contract law. Civilized, free societies respect contracts. Civilized, free societies respect the rule of law. By this simple, irreducible definition, the United States, under the rule of Barack Obama and his “Democratic” Party, has ceased to be a civilized, free society. Under pressure from the Obama Treasury Department, federal courts negated the legal rights of bondholders and shareholders by illegitimately applying a segment of the Chapter 11 code known as section 363.
To be clear, used as intended by its authors, section 363 is a perfectly honorable legal option for firms in bankruptcy, and is sometimes crucial in protecting the rights of stakeholders. It allows managers to negotiate in good faith with other firms interested in acquiring some or all of the bankrupt firm’s assets, and can produce outcomes more favorable than those obtainable through open auction liquidation. The terms of any such agreement must be approved by the presiding judge in the bankruptcy proceeding. Under section 363, the judge’s sole legitimate responsibility in approving the transaction is to ensure that the bankrupt firm’s stakeholders would be better served by the sale of the assets in question than they would be by liquidation of those assets and dissolution of the firm. By “stakeholders”, we are referring to bondholders and shareholders, in that order.
It seems sad to have to stop here and offer a civics lesson on corporate bankruptcy, but since recent studies have shown the average American unable to place even a major historical event, such as the Civil War, within the right century, let us invest a few words. The only stakeholders who have a legitimate legal interest in the outcome of a corporate bankruptcy are the creditors, the bondholders and the shareholders (i.e. the people to whom the company owes money, and the people who will own whatever is left over after all of those debts are paid). Under the system of capital finance and corporate governance that has served the United States well for over 200 years, there are no other organizations or individuals who can claim consideration in this process. Not the customers who purchase the company’s products or services; not the employees who look to the company for future compensation; not the unions who rely on the dues from those employees to purchase political power and influence; and not the politicians whose own personal status and wealth is built on such union largesse. U.S. bankruptcy laws adhere to the same basic premise that animates and sustains all modern liberal democracies: the premise that individuals who voluntarily place their personal property at risk in the furtherance of a commercial enterprise, have a right to expect their claims to supersede all others, should that enterprise fail. This is not arcane legal minutia, but a bedrock moral principle, recognized and supported by federal law. Consider the following passage from the SEC’s own web site:
How Does Chapter 11 Work?
The U.S. Trustee, the bankruptcy arm of the Justice Department, will appoint one or more committees to represent the interests of creditors and stockholders in working with the company to develop a plan of reorganization to get out of debt. The plan must be accepted by the creditors, bondholders, and stockholders, and confirmed by the court. However, even if creditors or stockholders vote to reject the plan, the court can disregard the vote and still confirm the plan if it finds that the plan treats creditors and stockholders fairly. Once the plan is confirmed, another more detailed report must be filed with the SEC on Form 8-K. This report must contain a summary of the plan, but sometimes a copy of the complete plan is attached.
Pay special attention to the following phrase in the above excerpt “The court can disregard the vote [of the creditors, bondholders, and stockholders] and still confirm the plan if it finds that the plan treats creditors and stockholders fairly.” So how well was that principle applied in the section 363 sale of Chrysler Motors to Italian auto manufacturer Fiat? The Chrysler sale to Fiat was approved, over the objection of bondholders, after the President of the United States openly berated those bondholders as greedy “speculators”, who were “refusing to sacrifice like everyone else”. Not content to publicly attack these fund managers for fulfilling an ethical obligation to defend their investors’ property, the Obama White House privately assured them that any further resistance to the administration’s wishes would invite an all out propaganda assault from the White House press office, intent on destroying their public reputations and crippling their professional credibility. Had this threat originated from any other source, “main stream” media personalities would have clamored for an FBI blackmail investigation (given the prima facie criminality of the threats). Since they emanated from the Obama White House, they were not considered particularly newsworthy.
And just exactly who are these greedy speculators, who refuse to share the sacrifice our president insists we all experience in equal measure? According to the the Governor, Treasurer and legislators from the State of Indiana, they are retired police officers, school teachers and their families. These retirees, and the honest fund managers who invested responsibly on their behalf, placed their trust in a very simple idea. They trusted that any man or woman elected to be President of the United States – who ascended to that office by swearing an oath to support and defend the Constitution of the United States – would fulfill that oath by actively supporting, rather than subverting, laws written to protect their constitutionally affirmed rights to life and property. They trusted that, should they find themselves challenged by forces and circumstances beyond their control, their ability to assert their own legal rights would be bolstered and championed by judicial and executive servants of the people, still committed to the ageless American principle of equal protection under the law. Instead, they found themselves subject to a new and radically different judicial and political philosophy – the philosophy of empathetic justice. Sadly for these retirees and their families, despite the validity of their legal claims, their own personal stories just weren’t compelling enough to win the hearts and minds of those who have determined their fate. Forgive these families for finding no consolation in the fact that they did not lose a legal argument on its merits – that they were simply voted off the island. Still, we must all acquaint ourselves with this reality TV philosophy of justice, since adherence to its tenets has become the new litmus test for Supreme Court nominees.
So if these families from Indiana, and millions more like them in communities all over America, were tested and found unworthy of the empathy with which the Obama Justice Department swept aside the legal principle of equal protection, who was the target of all this newfound judicial affection? The answer is nauseatingly simple. One almost hates to have to say it out loud, because the analysis is not a complex exercise.
- A pre-bankruptcy equity stake in Chrysler is essentially worthless today, so we can put to rest the question of what shareholders get – the answer is nothing.
- Under threats and intimidation from Obama’s Treasury Department, most bondholders accepted $0.29 for every dollar they were owed – not exactly a winning proposition for retirees on fixed incomes.
- Contrary to these financially catastrophic outcomes for the only two groups with legitimate claims against Chrysler assets, the United Auto Workers union will be handed a controlling 55% equity stake in the newly restructured company. Why?
At the risk of reaching a cynical conclusion, consider the following facts submitted by the Washington Examiner:
UAW’s political action committee spent $13.1 million last election cycle, a slow year for the union’s political arm. Of the PAC’s $2.3 million in direct contributions to candidates and candidate PACs, more than 99 percent went to Democrats. Of 42 Senate candidates to get UAW money, only one was Republican, and that was Arlen Specter.
The union’s PAC also reported $4.5 million in independent expenditures supporting Obama, plus an additional $423,000 opposing John McCain.
The truth the Democrats and their lapdogs in the media refuse to trumpet is that the United Auto Workers, their political puppets in the Democratic Party and decades of politically timid corporate managers actively destroyed the American automobile industry and squandered the personal retirement assets of millions of Americans in the process. The only sensible response a consumer can offer to such monumentally pathological conduct is to boycott union made automobiles. Honda, Toyota and Nissan all employ American workers to produce better products than Ford, Chrysler or General Motors. They do this not in spite of their refusal to bend over for labor unions, but because of it. Labor unions in America have systematically destroyed the quality and competitiveness of American industries, service organizations and educational institutions. Continuing to support these criminally irresponsible labor gangs is not patriotic. It is idiotic.
Libertarians rightly believe that each consumer should make purchase decisions primarily on the price, quality and perceived net benefits of the product or service in question. In a perfectly free society, governed by justly enforced laws, designed and implemented to secure the rights and responsibilities of free labor and free capital (i.e. a society of the kind the framers of our Constitution envisioned), this sort of contextually agnostic consumerism would not only be practical, it would comprise the most moral form of commerce. Sadly, we do not live in such a society. While we each may wish to act with enlightened self-interest in the commercial sphere, rarely scrutinizing the provenance of the products or services we buy, few of us would knowingly use our economic freedoms to secure the product of slave labor or the proceeds of theft. For better or worse, we each find ourselves examining the purchases we make from both economic and moral perspectives.
From this point forward, an American who purchases an automobile manufactured under a UAW contract is materially supporting that organization in its theft of billions of dollars rightfully belonging to their fellow citizens. Anyone who traffics in the purchase and sale of stolen goods actively, knowingly and morally participates in the theft itself. This message is not intended to appeal to those Americans who cannot correctly identify the century in which the Civil War was waged. Nor is there any hope that it will resonate with those whose conception of political enlightenment involves a tingly feeling in the extremities. But in this vast sea of expanding idiocracy, there remains hope that some Americans still possess both an active mind and a moral compass. The federal government will spend millions of taxpayer dollars to convince American car buyers that purchasing a union-made automobile is both prudent and patriotic. Given the likelihood that these products will benefit from tax incentives, regulatory imbalances and incessant propaganda, all designed to tilt the playing field in their favor, many Americans will convince themselves to move with the herd, give in to short-term self-interest and soothe their troubled consciences with the balm of Big Brother’s absolution. But for those in whom a free mind and an honest soul remain, the path could not be more clear…
…Save America’s future! Boycott America’s labor unions.
