Posted by
Andy Zarowny on Saturday, June 13, 2009 9:44:29 PM
This week may go down in
history as when America was
finished. The rule of law, the
U.S. Constitution, was further
torn and trashed, by the very
people who are tasked to pro-
tect and enforce it. On this
past Tuesday, the United
States Supreme Court, denied
a stay to hear the case of the
State of Indiana versus the
Federal Government.
The Indiana State Pension
Fund is amongst the many
holders of secured loans to
the Chrysler Corporation. Now
in bankruptcy, Chrysler is obli-
gated, under U.S. contract law,
to compensate secured lenders
first, in full if possible. Instead,
the Obama Administration has
intervened in the bankruptcy
and such secure lenders are
instead moved off their 'pay-
back-first' status.
The secured lenders, pension
funds for retirees (mostly state
employees like public teachers)
will get only 23 cents on a dol-
lar for their investments. The
UAW, through their health care
organization, will get 43 cents
worth of Chrysler's remaining
equity. The secured lenders,
who purchased bonds from
Chrysler in the past, are what
the law defines as "senior
creditors". Others with a finan-
cial stake, such as the UAW's
benefits group, VEBA, are
"junior creditors".
Under the rule of law, which
has managed bankruptcies in
America for over 200 years,
senior creditors must be com-
pensated first before junior
creditors. A deal devised by
the Obama Administration has
reversed this precedent. In
addition to contract law being
turned on it's head, the senior
creditors have been denied
their 5th Amendment rights to
"due process" by the govern-
ment.
The law is what shapes society.
Our Constitution was a colaber-
ation amongst the "several
states", each relinquishing a
small amount of power and
authority to the Federal govern-
ment. The states saw the need
for the Federal government to
have authority for national de-
fense and other aspects, such
as the coining of money, inter-
state commerce, etc. Under
the 10th Amendment, any
functions or aspects of society
not specified in the Constitu-
tion to the Fed is the province
of the Several States.
Our rule of law is derived from
long legal traditions stemming
back some nearly 5,000 years.
Mosaic Law, Roman Law, and
Anglo-Saxon Common Law,
all combined to form a base of
our way of life. Honoring writ-
ten agreements, contracts, is
at the heart of our society. It
is the glue that binds us and
provides us with the confidence
to plan for the future. Without
it, we are forced to into the
savagery of grabbing what we
can now, for tomorrow is un-
certain.
One of the earliest documents
that defines what a government
can and cannot do is the
Magna Carta. Latin for "Great
Charter", it was conceived in
1215 when landed barons and
noblemen in England sought
to end the tyranny of the whims
of then King John. It forced
the king to respect certain
rights of his subjects. It pro-
tected them against arbitrary
imprisonment, seizure of pro-
perty, and provided a means
to appeal the king's actions.
After John's older brother,
Arthur, disappeared myster-
iuously, John ascended to
the throne following the death
of the eldest brother, Richard.
John's actions, such as marry-
ing Isabella of Angouleme,
who had been engaged to
another nobleman, many be-
gan to question John's claim
on the throne and rule over
England's holdings in France.
John then picked a fight with
the Church in Rome over his
choice for Archbishop of
Cantebury. John was excom-
municated from the Church
in 1209.
This resulted in King Philip
of France attacking England
and it's holdings in Normandy.
John needed cash to raise
an army, and levied a series
of taxes. He even instituted
the first income tax on nobles.
Needless to say, that was
enough to send the nobles
into revolt. With support from
France and Scotland. the
nobles and their troops entered
London. On June 15th, 1215,
King John agreed to the nobles'
demands at Runnymede and
the Magna Carta was since
been the foundation of English
Law, and our law ever since.
The Chrysler bankruptcy, and
that for General Motors, has
now established a precedent
that any contract may be ignor-
ed or modified retroactively at
the whim of the government.
There have been other inci-
dents over the decades which
have diluted the law and the
Constitution. But the signifi-
cance of the decision this week
by the Federal courts now sets
the stage for the terms of any
investment, any loan, to be
changed or ignored without
due process.
The law makes possible our
economic system, Capitalism.
Without the law upholding the
rights agreed to under a con-
tract, protecting property rights,
Capitalism cannot function.
The incentive to invest is gone.
The Obama Administration
is whittling away at the law,
the Constitution and the funda-
mentals of the marketplace.
The end result can surely only
lead to disaster for our country
and our way of life.