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Another sad Obama auto bailout legacy


A little earlier, my colleague Rick linked to a Fact Check piece in The Washington Post that took President Obama to task for all the half-truths he recently told regarding the government bailout of Chrysler Corp.

Yet there is another (and I think, even more damning) aspect of the car company bailouts that the Obama Administration certainly does not want brought to center stage during the upcoming Presidential campaign:

Car Bailouts Left Behind Crash Victims

Vicki Denton died several years ago after the airbag in her 1998 Dodge Caravan minivan failed to deploy during a head-on collision in the Georgia mountains. In 2009, a jury found Chrysler responsible for her death because of a manufacturing defect, awarding her surviving son and other relatives $2.2 million.

The family was near collecting those damages on the eve of Chrysler's government-brokered bankruptcy. Now, two years removed from a $12.5 billion bailout, Chrysler Group LLC still hasn't paid the damages, and doesn't have to.

The reason: The company's restructuring allowed it to wash away legal responsibility for car-accident victims who had won damages or had pending lawsuits before its bankruptcy filing. The same holds true for General Motors Co., which discarded the liabilities as part of its own $50 billion bailout and restructuring.

... Among the creditors who suffered most, car-accident victims represent a distinct mold. Unlike banks and bondholders, this group didn't choose to extend credit to the auto makers. As consumers, they became creditors only after suffering injuries in vehicles they purchased.

"This was not a normal case. The government was deciding who was going to be taken care of and who was not," said David Skeel, a University of Pennsylvania law school professor and bankruptcy expert who has testified before Congress on the auto bailouts. Even if the auto makers had legal rights to leave behind product-liability claims, "there is a deep unfairness," he said. "It would have been easy enough to set something aside for them."

Yes, you read that correctly.  As President Obama was ordering his "car czar" Steven Rattner to place one of his administration's top crony organizations, the United Auto Workers, at the top of the creditor lists for both Chrysler and GM's government-supervised bankruptcies, he was throwing the victims of their negligence under the proverbial bus.  Man, it sure is getting crowded under there.

This is our great "social justice" President folks.  Heck of a job, Barry.  Heck of a job.  
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Comments (10)

The JEF does not tell half ... (Below threshold)
TexBob:

The JEF does not tell half truths, he out and out LIES every day.

Wilson had it right. YOU LIE!.
http://youtu.be/qgce06Yw2ro

In a neo-socialist corrupto... (Below threshold)
Caesar Augustus:

In a neo-socialist corruptocracy the 'little people' are nothing more than axel grease for the wheels of cryonism.

Well in Barry's world there... (Below threshold)
GarandFan:

Well in Barry's world there is "fair" and then there's 'fair'. It's all in the nuance.

In a normal bankruptcy (whi... (Below threshold)

In a normal bankruptcy (which is what would have happened had Obama not trampled the process), these people would have been SOL, grouped together with GM and Chrysler's other unsecured creditors. Given that the assets weren't enough to take care of even the secured creditors, the entire class of unsecured creditors (along with the equity holders) would have been left uncovered. In other words, these people are no worse off today than they would have been.

Yes, Obama played games and took care of his supporters and left others on the side of the road. But conservatives should object to the entire process... and not merely to the specific groups that Obama took care of. Arguing in favor of this or that group undermines the principled objection to meddling in the first place.

Yes unsecured creditors los... (Below threshold)
jim m:

Yes unsecured creditors lose in a bankruptcy. But we are not protesting the way bankruptcy is supposed to work when it is done by the law. We are protesting that obama took a non-creditor, the unions, and elevated them above all other creditors for the sole purpose of enriching a political ally. It was nothing less than a political payoff.

Had obama not illegally paid off his union friends there might have been something left for the victims in these legal judgements. THAT is the ugly truth.

I'm opposed to the auto bai... (Below threshold)
Baggi:

I'm opposed to the auto bailout. I'll start with that.

Moving on. 2.2 million because your airbag didn't deploy?

That's what's wrong with America. Thank God they didn't get their money. What's wrong with these people?

Accidents happen. The world doesn't work perfectly. Stop these rediculous lawsuits.

I hope to God that if something like that happened to me someday, my family wouldn't be tied up in a stupid lawsuit for 10 years trying to get money for my death. Bury me and move on.

Jim M nails it. Well done, ... (Below threshold)
Jay Guevara:

Jim M nails it. Well done, Jim.

Well I guess we now know wh... (Below threshold)
Jay Guevara:

Well I guess we now know what "automotive justice" is.

This is our great "socia... (Below threshold)
jim m:

This is our great "social justice" President folks.

Social justice has always been a bunch of crap. No one on the left really cares about downtrodden minorities. If they did they would be using every tool available to help them. Instead they are eliminating every option other than big government.

The schools are failing? No vouchers or charter schools allowed. No we need to make sure that unionized public schools are the only solution, even though they are the problem to begin with.

Workers are being exploited in Indonesia by American companies exporting jobs there. The Horror! But exploit migrant workers here and who cares?

Ultimately the cry for social justice is merely a call to stop people from being successful. Starbucks is making lots of money? Well they must be exploiting South American coffee growers. Let's damage Starbuck's business so they will pay those coffee growers even less money. Because we care about the oppressed.

When I hear the term "social justice" used I know that the one using it is excusing some abusive action to impose their will on someone else not for the betterment of some oppressed minority but for the betterment of some political ally.

Jim, you're on fire!<... (Below threshold)
Jay Guevara:

Jim, you're on fire!

Re "social justice," Reds love to pervert the meaning of words by prepending adjectives that effectively invert the meaning of the noun being modified.

For example, in the UK leftists talk of "industrial democracy," by which they mean union bosses dictating both to management and union members.

And as for the minorities, which party would benefit, and which lose, if minorities were fully integrated into American society and felt that they had no grievances?

The question answers itself, and tells you all you need to know.




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