Investors on the enemies list

By James Morrow in Sydney

8 May 2009

Earlier this week I noted the Nixonian tendencies developing within the new Obama administration. Well, we didn't know the half of it. After reports that "Car Czar" Steven Rattner threatened investors who opposed the Chrysler bankruptcy plan - which puts previously-preferred creditors to the back of the line while delivering a huge chunk of the company to the very unions that helped drive the company into this mess - the administration has gone to ground.

Rather than continuing to issue (to my mind unconvincing) denials, President Obama's press office is now refusing to comment on a story suggesting that the Car Czar was prepared to set the White House Press Corps on so-called "holdout creditors".

Forget the disturbing implications of a president or his staff thinking the press is in his pocket. Anyone with a bit of political experience recognises this as a close cousin of the "non-denial denial": this is not the behaviour of the innocent.

Meanwhile, according to one report - unconfirmed, to be sure - one fund manager was treated to a spray of abuse and profanity, as well as threats of IRS audits for him, his firm, his family and his staff.

Richard Nixon would be proud.

This is a very dangerous game Obama is playing. In treating private investors like this (and let us not forget that many "greedy" fund managers are actually trying to achieve results for individual investors, pension funds, state governments and the like), the Obama administration is worsening the capital strike that is responsible for prolonging the Global Financial Crisis.

More dangerously, as he commits the US to ever-greater debt (spending over $11,000 per American in his first few months in office along, according to one calculation), there is the danger that even the Chinese will begin to balk at buying previously safe-as-houses Treasury notes.

After all, if Barack Obama is happy to interfere in private business arrangements to reward friends, publicly question the patriotism of his enemies - er, Chrysler bondholders - and then duplicate the model across the industry and beyond, who knows where it will end?

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Comments

Becky

10:13 PM on Fri 08 May 2009

And ironically, in this new era of hope and world peace, our good friend Austrailia is planning on increasing their military budget. While our green president is finding his legs, with the complacency of the press, he is becoming emboldened. Now that the press has pretty much abdicated it's duty, how will they be able to pull rank in the future? Obama and freinds are fortunate benefactors of conservatives respect for authority.

Clyde

10:28 PM on Fri 08 May 2009

Where will it end? With the trains running on time...

Mark in Ohio

11:10 PM on Fri 08 May 2009

Any hope that we who didn't vote for him had about his being honest about being post partisan and forgoing the old ways of politics,. are going up in flames. We see this and things like it as evidence, he's deep down inside, much more Hugo Chavez than FDR,. and has no intention of letting anyone stop him, regardless of what tactics he resorts too.

betheweb

12:17 AM on Sat 09 May 2009

Sadly, history teaches us that it will end in sumptuous lives for privileged members of the Inner Party, meagerly tolerable existences twinged with fear for the Outer Party appartchiks and enforcers who keep the Proles confined in wretched misery. America, sic tranist gloria mundi.

Concerned Citizen

1:51 AM on Sat 09 May 2009

"who knows where it will end?" It will end badly -- that's where (how) it will end. Obama's Chrysler stunt just put 20% of the available investment capital in the mattress for the next four years.

Jackson Laurence

2:43 AM on Sat 09 May 2009

I almost whole heartedly agree with all of the above, but only one nit to pick. You said "Forget the disturbing implications of a president or his staff thinking the press is in his pocket." This president doesn't "think" the press is in his pocket, he KNOWS the press is a wholly owned subsidiary of the Democratic National Committee.

ms ari stotle

9:37 AM on Sat 09 May 2009

then why oh why did wall street back barack obama overwhelmingly during the election? anyone who has read saul alinsky, whom obama holds in high regard, is certainly not surprised by the behavior of this thug with the teleprompter in tow. i wonder how much wall street will support barack in the next election?

Stuart Skelton

8:46 PM on Sat 09 May 2009

Where is the outcry in the US media about this?

Very soon the dreaded "surveillance" of the citizenry that the whack jobs of the US left claimed was at its peak under the evil W (sidebar: I know of no instance where anybody was able to, or tried to, prove that they were being surveilled) will be put to better use by the people on the receiving end of these "sprays of verbal abuse" and threats from Govt officials. I mean, really, if you're a "hold-out investor" in a soon to be nationalized company in the US, a little phone-conversation recording at the receiving end would appear to becoming increasingly necessary.

DocinPA

11:58 PM on Sat 09 May 2009

Where does this butthole Rattner live?

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