The Banks had been recipients of billions in TARP funds and there was no need for the Administration to say out loud how it would look to Americans for rich bankers to demand every dime while tens of thousands of blue-collar workers in factories and local dealerships were thrown out of work.
Not the same as sending in armed troops, but using the power of the Treasury Department as a club to get private companies to do the government's bidding is a little creepy.
Nevertheless, the creditors turned down a government offer of a settlement of about 29 cents on the dollar. So, according to the WSJ: At noon the next day, April 30, Mr. Obama said Chrysler would file for bankruptcy. He blamed "speculators" who had turned down the $2 billion offer for their $6.9 billion of debt.
Think that deciding how much Chrysler's debtors should get is a one-time intrusion by the Obama team? Think again.
A headline in today's Advertising Age:
Obama Halves Chrysler's Planned Marketing Budget
It seems the company wanted to spend $134 million over the next couple of months while it's plants are closed and the deal with Fiat is finalized, but "the U.S. Treasury's auto-industry task force gave it half that."
If the Obama administration can put the United Auto Workers on Chrysler's board of directors, negotiate the terms of its bankruptcy, give a third of the company to Fiat and can even decide how much marketing it should do … does anyone see a functional difference between Hugo Chavez' and Barack Obama's views of private companies?
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