I am not shocked that Obama is full of sh*t -- all politicians are. But I am constantly surprised at just how awful the press has become.
Here was the Arizona Republic towing the government line, attempting to stampede the country into subsidizing the auto companies because bankruptcy would be a disaster:
Advocates for the nation's automakers are warning that the collapse of the Big Three - or even just General Motors - could set off a catastrophic chain reaction in the economy, eliminating up to 3 million jobs and depriving governments of more than $150 billion in tax revenue.
Industry supporters are offering such grim predictions as Congress weighs whether to bail out the nation's largest automakers, which are struggling to survive the steepest economic slide in decades.
Even if just GM collapsed, the failure could bring down the other two companies - and even the U.S. operations of foreign automakers - as parts suppliers run out of money and shut down....
Automakers say bankruptcy protection is not an option because people would be reluctant to make long-term car and truck purchases from companies that might not last the life of their vehicles.
There was absolutely no background on the chapter 11 process, or any mention by this reporter or in any subsequent AZ Republic article that bankrupcy meant anything but liquidation and disaster. Not even a hint that many large companies, including the largest company based in Phoenix -- US Airways -- have operated seamlessly through chapter 11.
It was left to bloggers like myself to remind folks that the businesses and assets don't just go *poof* in a bankruptcy, and in fact it is generally in creditors' interests to have the company continue to operate.
So, now that Chrysler is heading for bankruptcy, Obama's incentives are now to make chapter 11 look friendly instead of menacing. And the AZ Republic is finally, after 6 months of coverage, explaining what this really means:
Bankruptcy doesn't mean the nation's No. 3 automaker will shut down. A Chapter 11 bankruptcy filing would allow a judge to decide how much the company's creditors would get while the company continues to operate. The goal is for the whole process to happen quickly, Obama said, perhaps within a couple months.
I thought this was priceless:
[Obama] said a group of investment firms and hedge funds were holding out for the prospect of an unjustified taxpayer bailout.
"I don't stand with them," Obama said at the White House event.
I actually don't think this is true -- as secured creditors, they are FIRST in line in a bankruptcy. Obama has effectively told them to voluntarily move to the back of the line, and they reasonably said "no way." Obama is miffed that they have not taken his royal direction, but I think they are correct they will get more out of a process run by bankruptcy law rather than one run by political pull.
But, even if hedge funds had this expectation of a taxpayer bailout, who in the hell do you think has given them reason to have this expectation? Can anyone say "moral hazard?"