On Cramdown Tactics

Edward Niedermeyer
by Edward Niedermeyer

Tom Blumer, in the WSJ, says, “Non-TARP Lenders Aren’t Making Up the Stories of White House Pressure,” citing conversations with anonymous Non-TARPies. According to these former holdouts, still masked and anonymous due to fear of reprisal, government officials went to the mats to pressure bondholders into compliance. Seeing as the group has dwindled from twenty to five since Obama called the group “hedge fund holdouts,” these tactics seem to have been highly effective. GM bondholders, pay attention ( if you aren’t already).

According to Blumer,

One person described the administration as the most shocking ‘end justifies the means’ group they have ever encountered. Another characterized Obama was ‘the most dangerous smooth talker on the planet—and I knew Kissinger.’ Both were voters for Obama in the last election.

One participant in negotiations said that the administration’s tactic was to present what one described as a “madman theory of the presidency” in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm.

In less depressing Chrysler bankruptcy news, the government has provided Chrysler with $3.034 billion in DIP financing instead of $3.34 as had earlier been anticipated. Why? According to the WSJ, “Chrysler had some remaining cash, which enabled the government to slightly scale back the aid to $3.034 billion.”

Edward Niedermeyer
Edward Niedermeyer

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  • Geeber Geeber on May 11, 2009
    agenthex: That’s why it’s somewhat reprehensible because they’re just doing it out of spite. So for-profit businesses, just to prove that an increase in the minimum wage isn't needed, increase their costs and pay employees MORE than the going rate for that type of work? That is a non-answer at best, and just plain nonsense at worst. These employers pay more than the minimum wage because they have to in order to attract workers. agenthex: The evidence is quite clear in countries with and without these government programs. The United States has had those programs, too, so we can judge their effectiveness without ever leaving the country. The evidence is quite clear that they are not effective in preventing the formation of a large and permanent underclass - after all, you admitted that it still exists in this country, 40 years after Lyndon Johnson embarked on his ambitious Great Society program. And please note that there is a permanent and growing underclass in Great Britain, France and Germany, too, even with their generous social welfare programs. agenthex: You misread. The places that have this problem are the ones without the central authority to raise the field at the bottom. I guess that includes European countries, too, as I noted above. And please note that the floor has already been raised - private employers have been raising wages ABOVE the minimum rate for quite some time now. agenthex: The funny here is that this is exactly what your beloved revolutionaries thought. Woe be unto those who run counter to human nature. I think that the left has been attempting to prove that one for years, although they either don't realize it, or don't want to realize it...
  • U mad scientist U mad scientist on May 11, 2009
    So for-profit businesses, just to prove that an increase in the minimum wage isn't needed, increase their costs and pay employees MORE than the going rate for that type of work? Wait, I thought you just said hardly anyone employees at those wages, so it doesn't matter as a symbolic gesture. Which one is it? Oh man, I'm so confused. - The evidence is quite clear that they are not effective in preventing the formation of a large and permanent underclass - after all, you admitted that it still exists in this country, 40 years after Lyndon Johnson embarked on his ambitious Great Society program. And please note that there is a permanent and growing underclass in Great Britain, France and Germany, too, even with their generous social welfare programs. People only say this because they haven't seen the kind of underclass in countries without the programs. Comparisons only work when you compare relatively, not against some ideal nirvana in your head. -- I think that the left has been attempting to prove that one for years, although they either don’t realize it, or don’t want to realize it… I'm sure the left in your head does all sorts of crazy things, but I'm not talking about them. In the here and now, there's only one ideology who still talks about humans as rational characters if not fungible commodities, assumes perfect information, and all sorts of idealisms that hardly worked in the pre-industrial era never mind today.
  • Geeber Geeber on May 12, 2009
    agenthex: Wait, I thought you just said hardly anyone employees at those wages, so it doesn’t matter as a symbolic gesture. Which one is it? Oh man, I’m so confused. I said that most businesses pay more than the minimum wage, which goes against your contention that opposing an increase in the minimum wage keeps people poor and proves that conservatives hate them. Most people already make more than the minimum wage. You replied that businesses are only doing this to be "reprehensible because they’re just doing it out of spite". Which, of course, is utter nonsense. Why would a company employ people at a higher wage, and increase its costs, out of spite? Do you really think that McDonalds, for example, is run that way? If you are confused, it is apparently because you can't keep track of your own arguments and counterpoints. agenthex: People only say this because they haven’t seen the kind of underclass in countries without the programs. Comparisons only work when you compare relatively, not against some ideal nirvana in your head. Comparing non-western countries with western countries is difficult because, cultural differences and attitudes about work, money and wealth all play a part in how people fare - just as they affect how various groups WITHIN a particular country fare. The attitudes regarding work, saving and delay of gratification are very different in Pennsylvania Dutch Country than they are in North Philadelphia. That is more important than government programs, or lack thereof. Give someone in Pennsylvania Dutch Country $1 million, and he or she will still probably have $990,000 of it within five years (or, perhaps, have grown it to $1.5 million). Give that amount to most poor people, and he or she will be broke within five years. Look at the example of most lottery winners (most of which were poor, or at least lower middle class, when they won the lottery). Most of them are bankrupt within a decade after winning the lottery. Within a country, we can compare how many people escaped poverty BEFORE the enactment of these programs with the rate after they were enacted. The results are, at best, mixed, regarding the effectiveness of these programs. We can also note that, even after the enactment of these programs, there is STILL a permanent underclass (you just said so yourself), even though some people prefer to pretend that this country isn't spending anything on programs to help the poor. agenthex: I’m sure the left in your head does all sorts of crazy things, but I’m not talking about them. Interesting...I often say the same thing about your characterizations of "the right." The right in your posts only exists in your imagination. You, for example, accused conservatives of "hating on the poor," which is a complete distortion of their position. Let him who is without sin cast the first stone...oops, now I'm going to be accused of being a religious fanatic, because, as we all know, all conservatives are religious nuts!
  • U mad scientist U mad scientist on May 12, 2009
    I said that most businesses pay more than the minimum wage, which goes against your contention that opposing an increase in the minimum wage keeps people poor and proves that conservatives hate them. Most people already make more than the minimum wage. That's what you thought I said. What's actually said is that it's a wedge issue pushed out of spite for the poor. ie. It's not a huge issue on the ground, so opposition is clearly meant as a symbolic gesture, which is in many ways worse. - Comparing non-western countries with western countries is difficult because, cultural differences and attitudes about work, money and wealth all play a part in how people fare - just as they affect how various groups WITHIN a particular country fare. The challenge is not limited to western countries. Pretty much all the relatively wealthy places ON EARTH with very few exceptions have not been on the "conservative" plan. The challenge was thrown down in this thread: http://www.thetruthaboutcars.com/chrysler-zombie-watch-6-bankruptcy-prof-condemns-chrysler-c11/ So take it. - there is STILL a permanent underclass (you just said so yourself) You keep saying this as if there true. Again, the implication is that is almost a 1:1 correlation between relative prosperity and progressive policies. The permanent underclasses tend to be in places run the way you seem to prefer. Just take the challenge. - You, for example, accused conservatives of “hating on the poor,” which is a complete distortion of their position. "Hating" is a figure of speech in the vernacular. The reality is that there is a sense of entitlement not among the poor, but the rich in this country. The culture of individual greed dictates (again strongly implied in you posts) that success (measured by money) is a personal issue to the exclusion of social phenomena. This was exactly the fundamental cause the of our recent downfall. For example, the prime example of this is perhaps AIGFP, whose blatantly destructive financial transactions were rewarded with massive personal payouts. Compare to poor person crimes that are rewarded with massive cell time. Another example closer to the topic are similar execs in Detroit taking very generous paycheck to run companies into the ground. They may not "hate" the poor, but they certainly don't give a shit about putting everyone else in the poorhouse to get their due. And why should they? It's not as if there's a lack of peeps cheering on that culture.
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