MORE ON THE NEW SOCIALIST DETROIT AUTOMOTIVE PROJECT. I characterized Our President's stance. "He is chastising some of the creditors for insisting on being paid in accordance with the seniority of the obligations the company incurred." King Banaian elaborates.

Many bought the debt knowing that bankruptcy was possible. They did so under the expectation that the rule of law would apply in America, that their place in line under bankruptcy law was purchased with that debt. President Obama's ire over their unwillingness to give away that place in line -- a place purchased by those endowments and foundations and pensions not for themselves but for students, pensioners and grant recipients -- is an indication that the president thinks his noble ends are superior to theirs.

Mahablog attempts the case that Our President's ends are superior.

The White House strong-armed Perella Weinberg Partners into signing on to the $2 billion deal in order to leave something left of Chrysler to restructure. This in turn will, it is hoped, save thousands of jobs (you’re saving not just Chrysler, remember, but also suppliers) and at least some portion of employee health and retiree benefits. And this is good not just for the employees and retirees, but for the state and local economies in which these businesses are located.

Left unsaid: this is bad for employees of other companies that will not grow as rapidly as resources those companies might otherwise have claim on flow instead to the legacy car companies; this is also bad for younger employees of the legacy car companies, who will have to face yet another round of difficulties thirty years from now. We see the people spared termination notices at Chrysler. We do not see the job offers from employers that never start up. We do not see the tax collections from those businesses, in the states that are more conducive to business than Michigan. Betsy's Page places more emphasis on those losses.

What sort of precedent does it set for future investors if the government starts ignoring the established rules of bankruptcy in order to benefit favored supporters such as the UAW? Who is going to want to invest in the future?

What is the sound of Atlas, shrugging?