It’s about free markets versus fascist corporatism.
[Update early afternoon]
Sorry, but yes, it is fascism. Which is not identically equal to Nazism.
[Update a few minutes later]
So much for the rule of law:
As much as anyone, we want to see Chrysler emerge from its current situation as a viable American company, and we are committed to doing what we can to help. Indeed, we have made significant concessions toward this end – although we have been systematically precluded from engaging in direct discussions or negotiations with the government; instead, we have been forced to communicate through an obviously conflicted intermediary: a group of banks that have received billions of TARP funds.
What created this much-publicized impasse? Under long recognized legal and business principles, junior creditors are ordinarily not entitled to anything until senior secured creditors like our investors are repaid in full. Nevertheless, to facilitate Chrysler’s rehabilitation, we offered to take a 40% haircut even though some groups lower down in the legal priority chain in Chrysler debt were being given recoveries of up to 50% or more and being allowed to take out billions of dollars. In contrast, over at General Motors, senior secured lenders are being left unimpaired with 100% recoveries, while even GM’s unsecured bondholders are receiving a far better recovery than we are as Chrysler’s first lien secured lenders.
Our offer has been flatly rejected or ignored. The fact is, in this process and in its earnest effort to ensure the survival of Chrysler and the well being of the company’s employees, the government has risked overturning the rule of law and practices that have governed our world-leading bankruptcy code for decades.
Hey, there are omelettes to make.
It’s been a while since I’ve studied bankruptcy law, but can’t ANY creditor of GM file a Bankruptcy suit once the company is insolvent (Liabilities exceed Assets)? Aren’t there special provisions allowing a creditor to force a debtor into bankruptcy once the debtor starts taking actions to give preferential treatment to non-senior creditors? If so, why hasn’t anyone started the ball rolling?
For whatever reason, creditors do not seem eager to put a business into bankruptcy court. The thing that really bothers me here is that these are supposedly secured creditors in Chrysler getting shafted in favor of unsecured creditors (namely the employees).
There are two things bothering me here. First, that the priority of creditors is being violated by the federal government. Secured creditors should have priority over unsecured creditors like pension funds or poorly thought out government bailouts. The UAW seems to be getting favored treatment in this mess even though, at best, they represent the employees who are unsecured creditors.
Second, what is Fiat’s role in this? Why do they get a share of Chrysler? In every story so far, I see no mention of what they had to offer to get that.
Sorry, that post doesn’t read well. Should have proofread it before I hit “submit comment”.
This culture war is lost if the government is allowed to shut down alternatives. Without an example of something that works, they can claim their solution works and argue they need to do more to make it work better (regardless of the fact that it hardly works at all.)
Can these illegal activities be challenged when judges are part of the problem?
The problem with correctly identifying fascism is the denotation may be right, but the popular connotation shuts down peoples ability to reason.
They argue whether government actions under this admin are socialism when the facts would leave no room for argument. How do these people get to be the voice of the nation? How do they go unchallenged? When someone does challenge them, they are immediately smeared and marginalized with a permanent attempt to forever destroy their credibility. They play for keeps.
I don’t know if history records a case where a true fascist state has liberalized itself peacefully. The usual options seem to be (1) military defeat (Germany), (2) revolution (ancien regime France, Tsarist Russia), (3) economic prostration (USSR), or (4) being overrun by barbarians (Roman Empire, pre-Mongol China).
In short, it tends to look like centralization of power is a one-way ratchety kind of thing. It seems to be human nature to think that the solution to some people have too much power is give other people even more power, to watch over them.
I’d consider economic prostration peaceful. But I agree with the gist. When there are problems with a fascist state (or any totalitarian government), the solution isn’t going to be letting go of power until all other options have been exhausted first.
“I don’t know if history records a case where a true fascist state has liberalized itself peacefully”
Spain. South Africa, Rhodesia. Nicaragua. Phillipines.
Romania, Hungary, DDR, Poland.
South Africa and Rhodesia – errr, no. Both preceded by extensive terrorism; and in fact, Rhodesia is now worse than fascist – it’s a kleptocracy, and went from fascist to that (assuming it was fascist in the first place) without passing GO. (I would have said “without collecting £200” as well, but that would have been incorrect – Mugabe has collected several billion.)
The latter case was predicted, too. I saw this in several places before the “election” that ushered Mugabe into power – “One man, one vote – once”.
Ok
Spain, Nicaragua, Phillipines, Romania, Hungary, DDR, Poland.
The Phillipines was a set of cartels run by the marcos family, and the marcos people assissanated their greatest rival on TV walking off a jet on TV. There was a peaceful set of street protests and the government just collapsed.
Well, jack, the communist fascist states you mention (Romania, Hungary, the DDR and Poland) freed themselves only in the context of the massive struggle between the US and USSR. The Cold War, remember? Hardly what I’d call a “peaceful” transition, unless the word “peace” is very narrowly interpreted as “no deaths in battle.”
Furthermore, you would most definitely not want to go to Poland, for example, and tell them their freedom came about without a long and ugly twilight struggle, in which quite a number of people suffered and died (albeit not in open battle).
In the other cases — Spain, Nicaragua and the Phillipines, you have confused, as people often do, a dictatorship or oligarchy of the right with fascism. They are not at all the same. Fascism is a movement, a society-wide philosophy and behaviour, total control by the state, not just the fact that there aren’t elections and El Presidente for Life makes the final call.
In some cases a dictator is just the apex of a fascist organization, e.g. Hitler and the Nazi organization, or Stalin and the Party, or Chairman Mao and the rest of the Chicoms. In these cases, as you’ll note, the death of one dictator just brings another one up. Very little changes. These systems need to be destroyed, it seems, either by pressure from without (military or economic) or by utter collapse.
In other cases a dictatorship really is personal, not a reflection of a society-wide sickness, and that means the death or retirement or change of heart of the dictator can profoundly change the society, quiet possibly liberalizing it. That is certainly what happened with Franco’s Spain or Pinochet’s Chile. The case of the Phillipines is more complicated, because its liberal traditions are poor, but still seems to fall under the heading of a oligarchy of wealth.
One of the things I have been doing for the past few years is learning some history. I was appalled after reading Howarth’s 1066 about how little I knew regarding the history of the land where my forebears came from.
In 1066 William the Conqueror (sometimes called the Cruel) replaced a more democratic English culture with a more authoritarian Continental one. It took awhile, but the still free — to some extent — English resisted and eventually triumphed over their Continental oppressors.
One of the things I don’t like about the current conflicts is the tendency of some to defend corporations when they are attacked by government without noting that the corporations themselves are hardly beacons of “free minds and free markets.” Corporations make demands on their workers that are hard to resist. They similarly can restrict what they sell and how they sell it. There are times when such authoritarian approaches can be, within significant limits, beneficial to humanity. I think that today those limits have been significantly exceeded to the detriment of our nation.
Complaining about government — but not protesting companies who want people to work 80 hours/week for as little as can be paid — is addressing only part of the problem.
Fortunately Obama is helping to consolidate the two.
I’d have to disagree with you, Chuck. Businesses (not just corporations) can make these demands of their workers, but they are very limited in how much they can coerce their workers to comply with those demands. Even the worst cases, employees on work visas (like the H1-B) can always leave the country and the coercion in that case is created and enforced by the federal government.
My view is that an authoritarian culture which you can readily opt out of is more than an adequate fit with a democratic society.
Further, one can always sue a business. Governments are immune to a lot of means for redressing harm.
Ultimately, businesses are a lot less powerful than governments, they hire a lot of people, and they exist to serve some purpose in society. Why shouldn’t we defend businesses in this blog when they are wronged by government? Even a greedy, amoral business deserves some respect for what it does.
Karl,
Try telling a lowly employee that he can resist corporate demands that are out of line. Yes, business has less power than government but it still has much more power than normal individuals.
And, by not addressing that part of the problem, you will alienate people who might otherwise support you.
I will ask a simple question. How many people here have been fired by a corporation for standing up to abusive bullies? I have.
How many people have been jailed and shot by corporations?
You don’t have a right to be employed by a particular company – it’s a contract between two parties. You can get another job anywhere. That’s why complaining about companies is usually less important than complaining about a government that can detain, jail, or kill you or your family; or simply confiscate all your belongings and send you to a work camp.
—
Hey Jack, why don’t you tell that to Richard Fernandez. I’m sure he’d love to hear your interpretation of Philippine history, especially that last sentence.
Brock,
You are not listening. You are reciting libertarian philosophy.
There is a severe imbalance of power in modern American society between corporations and individuals. We do not live in a society in which individuals can all that easily walk off the job and find something better. A few people can, but most cannot. Quitting becomes even harder when one understands a problematical business culture can and does extend beyond a single company or even well defined subset of companies.
Citing the worst behavior of governments (e.g,, Russia throughout most of the 20th Century, Germany in the 1930s and 1940s) and then saying corporations are not as bad is ducking the issue.
Mr. Divine;
The problem with your view is precisely that elucidated by Mr. Pham above. I.e., there is a problem with corporations having too much power therefore the solution is to give even worse people even more power.
However bad corporations are, growing government power will make things worse, not better. If you have some other suggestion, we’d be happy to read it.
Chuck, you’re not thinking this out. Yes, an individual employee has very little power compared to a corporation. But what’s wrong with that? A corporation represents many people: the other employees, the stockholders, the customers who depend on it, and so forth. Don’t you believe that each man’s influence should be in some rough way equal? Then how can you demand that, say, the interests of the thousands of people who work for Microsoft be held hostage to the interestes of one customer, or one employee. You’re not asking for your individual liberty if you do — you’re asking to be a tyrant over everyone else who works for that company.
What is true is that employees as a class, taken all together, have as much (or more realistically more) power than companies. If all of the employees (or even a significant fraction) decide they hate what the company is doing, and quit, or even threaten to quit, the company will change very fast indeed.
But, no, a large corporation that represents hundreds or thousands of people is not going to be dependent on the opinions or wishes of only one person. Nor should it be, any more than the Federal government should bend itself to implement what any one voter wants.
Your last post reeks of entitlement, a modern disease. Where do you find it written that you’re entitled to a job? To an income, regardless of whether anyone finds the work you do valuable or not? You’re like the oddball who posted on Slashdot a while ago, complaining that Amazon banned him from their site “merely” because he returned for minor complaints several multi-thousand dollar pieces of electronics over the past year. The guy apparently felt Amazon was obliged to do business with him even if it cost them money.
Apparently you feel a company is obliged to keep paying you for your work, even if your work isn’t worth nearly what you’re paid. I wonder how you’d feel if that same philosophy was applied to you. Suppose you were obliged to buy from certain corporations, even if their products weren’t worth the money to you? Suppose you were obliged to hire a particular babysitter or mower of lawns or contractor, even if their work was so crappy, or their interaction with you so poor, that it wasn’t worth the money? Wouldn’t that suck? And yet that’s the deal you want to impose on others. Not nice.
The starting point for a free society is not for each of us to demand as much power for ourselves as possible. It’s to recognize and respect the liberty of others to do as they please, just the way we’d like to. If you aren’t willing to give others — CEOs and bankers included — the same liberty you’d like for yourself, then you’re not ready for a free society. You’re better off in a police state, where you won’t mind being told what to do and what to think because you have the satisfaction of knowing that others are, too.
It seems to me that the corporations that produce some the most egregious abuses of employees do so with the assistance of the gov’t.
For instance, when some of the early unions tried to organize strikes to protest miserable working conditions the protests were often broken up by the local city police.
To me I think it is best to judge these things from a morally neutral position. On one side, yes, union action is necessary to better the work environment and provide fair pay. The quality of the product that an employee turns out when they are well paid and not being worked to the bone will probably go up. This is a win/win for both the worker’s well being and the corporation’s bottom line. However, on the other side, over regulation and nitpicking of every little perceived injustice can just as well be a lose/lose for all those involved. One gets a lazy workforce more intent on belly aching and ducking out on producing anything tangible and the company’s bottom line as a whole rots and withers.
So, unions by and large are like a lot of action groups who start off with noble intentions. Rarely comes a time, though, when they say, “Okay, we did it, we got what’s fair” and then close up shop. No, they scope creep into worrying about what’s offered in the vending machine, is there enough yellow warning labels marking the steps out by the smoke break area, or debating whether the temporary contractors should be able to partake in next weeks pizza social.
Further, one can always sue a business. Governments are immune to a lot of means for redressing harm.
Is a statement by someone who does not know what Tort Reform means.
Carl, Annoying,
I submit you are not paying attention to certain aspects of life. There are things called hierarchies. They exist in government and corporations and, for that matter, throughout education, religion and a variety of other kinds of organized life.
It is possible for hierarchies to be oppressive of large numbers of people, be they employees, students, customers, citizens, members, etc. When hierarchies are subjected to the limits of free, democratic societies, they actually can function for the benefit of most people.
Rants about government interference ring hollow unless people start challenging the excessive power of other hierarchies. Unions and professional organizations are two similar ways of challenging such power. Taking complaints to a democratic government and asking for moderate regulation of people who have obtained power over others through various undemocratic means is yet another. Speaking truth to power (no, I am not a member of the Religious Society of Friends but I do greatly respect them) is yet another. There are other ways.
As far as being “entitled” I am entitled to live as a free citizen in a free community. Too many businesses treat their employees as closer to chattel that free human beings.
Lectures that I have not thought this through also ring hollow. What I have done is thought things through and arrived at a conclusion that some libertarians do not like — that contemporary business is in need of significant reform.
Of course there are heirarchies, Chuck. We’re all born equal, at least in the eyes of the law, but after that we start diverging pretty quick. Don’t you have some area of expertise, something at which you’re very good? Say, you’re a genius at fixing cars, and have spent 25 years doing it. Don’t you think, then, that your opinion on that subject is worth more than most other people’s? Don’t you think if there are important questions about fixing cars your opinion should count more than J. Random Ignoramus?
Fact is, life is full of heirarchies, because people are at any given moment, and for any given purpose, quite unequal. There are some who are well-informed experts on the situation, and a whole lot of others who are inexperienced newbies. It’s sane that the expert gives orders to the newbies, just like it’s sane for an army to have a commanding general. Indeed, anything else is nuts, playground chaos.
So the question isn’t should we have heirarchies. The question is what kind of heirarchy should we have? How should they be formed, and who should be on top?
In a free market of labor and capital, under ideal circumstances, the heirarchies are all purely voluntary and based pretty closely on merit. Your boss is your boss because he has proven himself better able to convince customers to send their money to your company to pay both your salaries. If your positions were reversed, and you gave the orders and he obeyed them, the company would do worse and you’d both starve.
Of course, if this isn’t true, then solutions are available. Maybe your performance comes to the attention of your boss’s boss, and your boss gets fired and you take his place. Maybe you leave and form your own company in competition with your old firm, and you’re so much better you drive them out of business. There’s a lot of possibilities for how the system can correct itself, because it’s all based on voluntary associations. No one gets to a position of power without being “voted” into place by happy customers and employees, and without surviving endless “votes of confidence” where customers and employees decide whether to stay or jump ship.
Not so with government heirarchies. These are set up by the power of guns and jails, and they are very difficult to change. If you don’t like the things the Democratic majority in Congress is doing, your next chance to affect that is 2010, and even then the President himself and 2/3 of the Senate are immune to your anger until many years later. More importantly, if you don’t like what you get from Microsoft or Verizon for your money, you can not give it to them and do without Windows or your cell phone. Not fun, necessarily, but not what happens to you if, in the same spirit, you refuse to pay your taxes on April 15 or you refuse to pay the new assessment on your property to fund a new courthouse you don’t think is necessary.
Similarly, if you don’t like working at your job you can quit. Hard times, to be sure, but not like what happens to you if you refuse to show up for jury duty, or you refuse to vacate your house when government decides it’s a blight, or you think it’s perfectly safe for you to drive 100 MPH on Interstate 80 in the middle of the night with no car in sight for miles.
You’ve basically fallen prey to the age-old drean of Caesarism. You want Big Daddy Caesar to come rid you of all the pestilential big brother corporations that are making life annoying. You’re the horse that so badly wants the biting flies kept off him that you’ll gladly let the Man come along and put a bit and bridle on you, so long as he also puts you in a clean barn without flies. Your choice, of course. But others of us feel differently.
When we’re wailing about corporations, it’s pretty crucial to note we’re really talking about mega-corporations. And even there, we’re focused on any field where competition has been crushed and we’re down to a small number of competitors.
If “Joe’s Daily News Inc.” decides to blacklist you and hound you – no loss. No one’s ever heard of him. Your number one freedom (which is oddly not in the BoR) is the ability to vote with your feet.
But if ABC blacklists you, it is entirely a different story. There’s the slim chance that FOX might hire, but there’s a long, long list of GE affiliates that may be an impediment.
My approach to the mega-corp bailouts would be the AT&T approach. Slice that sucker into -at-least- five pieces before they get a dime. Government intervention wouldn’t be a lingering multi-year insanity. Nor would any sane company dare ask for help unless the situation was truly dire.
In a company like AIG’s case, there’s a long list of profitable divisions with one complete screwup division. Well, after a little slicing – suddenly the remaining pieces aren’t “too big to fail.” And a fair number of the pieces are -still- turning record profits.
As an added bonus, the top tier executives are the guys getting the axe. All the division heads are getting the instant promotion – but the entire overarching executive level can just get the instant axe.
Try telling a lowly employee that he can resist corporate demands that are out of line. Yes, business has less power than government but it still has much more power than normal individuals.
I just did tell those lowly employees that they can resist corporate demands. The consequences may be that they end up looking for a new job, but life isn’t always fair. There are plenty of stories of people successfully resisting such demands. Usually it’s via simple matters like reading contracts before you sign them, communicating with your boss and management to make them aware of the risk of performing hazardous or legally dubious actions, and putting critical requests into writing.
And, by not addressing that part of the problem, you will alienate people who might otherwise support you.
What can I say here? If pretending (without imposing an significant burden on business) to be harder on “corporations” buys enough consensus to deal with the real problem of excess government power, then by all means pretend to be hard on “corporations”. This is a democracy, I don’t expect to get everything I want. I’m willing to grant low cost face saving gestures or rituals, if that means we have a better, freer society as a result.
Also, we’re not allowed to cheer the efforts to bring democratic political values to certain countries by military action (Iraq, Afghanistan) unless we favor military action to bring the same benefits to China and North Korea.
Right?
In a free market of labor and capital, under ideal circumstances, the heirarchies are all purely voluntary and based pretty closely on merit.
Reading you guys sometimes reminds me of the lefties at university bleating that the problem with Communism was it hadn’t been done right yet.
Sure people are free to change jobs. They’re also free to lose their homes, their health insurance, their ability to pay for their kids education and lots and lots of other things.
To most people the terms in a contract are irrelevant compared to earning a living.
I used to live in a town where you could still see the bullet holes in the front of the Corn Exchange where the local mill owners had the town bring in the army to shoot at strikers. I’m sure that the workers hadn’t read their contracts either…
In the real world, failure is always an option — where people are, as you say, free.
Eliminate the freedom to fail and you eliminate freedom.
This thread is astounding and amazing. A number of contributors have engaged in give-and-take, taking positions pro and con regarding the power of individuals, governments, unions, industrial corporations, and none of this has been spoiled by a reflexive talking-points post by Jim. Enlightening discussion.
Eliminate the freedom to fail and you eliminate the freedom to fail?
Bollocks. Utter crap. That is such santimonious cruz that it doesn’t even dignify a cogent reply.
Sorry but that can only be said by somebody who hasn’t had to deal with people whohave failed in life. I have. And oddly they’re still people.
Paul Itrust I have been reflexive enough for Jim and myself.
I actually find some of the opinions posted here to make me feel personally I’ll.
Daveon, I’d like to point out that Paul’s argument is that without the freedom to fail, you are not free – period. Not free at all, in fact. I have to agree. And that’s coming from someone who’s currently unemployed – and spent more time as such than not, in the last couple-three years. So no, it need not “only be said by somebody who hasn’t had to deal with people who have failed in life.” If there exists a mandatory safety net, that must cost something – and in order to bear the cost, less risk is going to be taken by those who provide the work (and bear that cost). Expansion projects are delayed if not abandoned, outsourced overcapacity work is brought back in-house, orders for external suppliers dry up, and there simply isn’t enough production to support the mouths that need to be fed. That is how people like me end up whacked over the head in these times. I bear my past employers no animus for this; one can easily see such problems coming months in advance, and take steps to mitigate the damage. Whom I do have a problem with, are those who think they know better how to run a business – no, say better, run the whole blasted economy! – than the people who actually do so, and who have the power to make stick the dictates of their “received wisdom” from the Cesspool of the Potomac under penalty of law. Who, “coincidentally,” are the very people who initiate the error cascades that lead to these periodic meltdowns. That such persons exist, and really do meddle in the economy – that is what makes the current system more than slightly fascist. Remember, all of us are smarter than any of us when it comes to such broad overarching decisions. This is the whole point behind the notion of the “Invisible Hand.” It is a lesson that the aforementioned “all of us” seem to have forgotten, as we periodically do, and re-learning it will be about as pleasant as it ever is. I look forward to the end of the lesson, when it has sunk in for a time and I can go back to working for a living in my chosen field.
The self-serving statement from the hedge fund creditors needs to be taken with a grain of salt. Moody estimates that they might get 20% recovery in liquidation, and they were offered more than that.
It’s entirely possible that some of them are holding credit default swaps that make it more profitable to trigger bankruptcy than to accept a fair offer short of bankrupcty.
Sorry but that can only be said by somebody who hasn’t had to deal with people whohave failed in life. I have. And oddly they’re still people.
As I see it, nobody said people who lose jobs aren’t people or that we don’t care what happens to them. What I said at least was that changing jobs is a reasonable solution for someone without a job due to bad luck or in a bad job with an employer. We don’t need to consider government solutions to problems that just require people to move to a new job.
I’ve been fired three times. Yet I still believe the above, because that’s been my experience. None of my employers have exercised undue control over my life. While I’ve had some trouble finding new jobs, I’ve also been well-prepared for losing a job.
One can’t prepare for everything so there is some use for government. But to worry of the power of businesses is folly. They grow steadily weaker as government takes more and more and are not in a position to threaten the existence of the US. Growing government power is.
I find it peculiar that some of the supposed examples of abuse of business power are actual abuses of government power, for example, Daveon’s example of a supposedly private strike being broken up by the local government using the army. There are examples of private armies (eg, Pinkerton’s early days as a brutal strike-buster), but these date from the 19th century.
While should we crack down on businesses today for abuses of the distant past? It doesn’t make sense.
My view has always been that you don’t deserve a job, you earn it. And by “earning it”, I mean that your employer willingly pays your salary without government coercion.
I actually find some of the opinions posted here to make me feel personally I’ll
My, my, such a delicate, sensitive flower.
Somebody mentioned it above, but the right to vote with your feet is fundamental to freedom. Centralization tends to take away that right. Whether a big corp that should feel the pressure of antitrust, or a central government that abuses the rights of states to have their own laws. When states are made to conform to federal laws, changing states, voting with your feet, no longer applies and freedom has been lost.
When people feel they can’t leave their jobs for another… can’t vote with their feet, freedom again is lost.
Freedom is not an absolute, it’s about opportunity. The powerful are often tyrants that like to restrict opportunity even as they smile and tell us how good it is for us.
> Somebody mentioned it above, but the right to vote with your feet is fundamental to freedom.
FWIW, Obama doesn’t like that right either.
Apparently I don’t understand what bankruptcy means. This guys that are bitching will now get a judge to give them what they actually deserve. Rule of Law will prevail. They did not want to take the haircut that was offered in negotiations so they will take the haircut the court will give them. Nothing has been imposed to them as of right now. But when you buy bonds, what you’re betting on is on the recovery rate after liquidation and that’s what they’ll get. BTW they could’ve sold their bonds on the open market whenever they wanted to.