President Obama wants social justice instead of equal protection of the laws.  Social Justice is what was implemented under Communist Soviet Rule in Russia after the October Revolution of 1917 and the ensuing civil war between the Red and White armies.  The Red army won and the traditional protection of the laws was thrown out in favor of social justice.

President Obama is seeking a similar situation in the Bankruptcy Courts on multiple fronts.  (Hat Tip to Neal Boortz.)

First there was the effort to change the powers/jurisdiction of the Bankruptcy courts to allow them to rewrite mortgages for better terms for debtors.  Frankly, I can see that this would be a good idea and that perhaps mortgages should not be any different than any other debts people are facing right now, but I don’t see the justice or fairness in allowing this to happen after all of the mortgages have been written.  The original debts were entered into based on one understanding of debtor/creditor law and to change the rules after the contracts were entered into is fundamentally unfair.  If you were to pass the law and then only apply it to the new mortgages, fine.

Now President Obama is seeking to cheat secured creditors in the Chrysler Bankruptcy.  The President has already changed the terms of ownership of Chrysler so that approximately 90% of the company will be owned by the Government of the United States and the Unions.  Now in bankruptcy, the secured creditors are supposed to take a backseat to unsecured creditors when the unsecured creditors are union employees depending on pension benefits that Chrysler is now unable to pay.  Under the recognized bankruptcy laws if you are a secured creditor, you are supposed to have preferential treatment by the Bankruptcy Courts because your debt is tied to a tangible item, much like a home mortgage or car loan.  

Presidnet Obama is now trying to demagogue the secured creditors as the evil rich who don’t care about the poor working man.  The problem with this is that the bond holding creditors are likely to be companies who invested other people’s money which was supposed to be “secure” in the “bond market”.  If you are an investor who put your money in bonds, and some of those bonds were purchased from Chrysler as an investment vehicle, President Obama expects you to simply give your money to the more favored union members who are not able to collect their pensions because Chrysler is going bankrupt.  Note to President Obama, not all people who invest in bond markets are rich and in fact may be depending on the security of these bonds for their own retirement as well.  President Obama has decided that the retirement of union members is more important than the retirement of non-union members who may be using a 401(k) instead.

The solution of course is to enforce the laws as written.  The security of laws governing finance, contracts, secured transactions and debts, and an orderly court system provide the stability required to allow a free market to grow and prosper the people willing to work and create value for others.

President Obama has decided that it is more important for him to favor his politically powerful allies instead of allowing people to have the benefit of the laws we have been operating under for decades. 

President Obama wants a nation of weak men dependant on government largesse, not laws and free men.

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