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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: coug who wrote (79142)	5/13/2009 1:29:45 PM
From: longnshort	Respond to of 89467

MAY 13, 2009 Chrysler and the Rule of Law The Founders put the contracts clause in the Constitution for a reason. By TODD J. ZYWICKI online.wsj.com The rule of law, not of men -- an ideal tracing back to the ancient Greeks and well-known to our Founding Fathers -- is the animating principle of the American experiment. While the rest of the world in 1787 was governed by the whims of kings and dukes, the U.S. Constitution was established to circumscribe arbitrary government power. It would do so by establishing clear rules, equally applied to the powerful and the weak. Fleecing lenders to pay off politically powerful interests, or governmental threats to reputation and business from a failure to toe a political line? We might expect this behavior from a Hugo Chávez. But it would never happen here, right? Until Chrysler. The close relationship between the rule of law and the enforceability of contracts, especially credit contracts, was well understood by the Framers of the U.S. Constitution. A primary reason they wanted it was the desire to escape the economic chaos spawned by debtor-friendly state laws during the period of the Articles of Confederation. Hence the Contracts Clause of Article V of the Constitution, which prohibited states from interfering with the obligation to pay debts. Hence also the Bankruptcy Clause of Article I, Section 8, which delegated to the federal government the sole authority to enact "uniform laws on the subject of bankruptcies." The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar. The absolute priority rule is a linchpin of bankruptcy law. By preserving the substantive property and contract rights of creditors, it ensures that bankruptcy is used primarily as a procedural mechanism for the efficient resolution of financial distress. Chapter 11 promotes economic efficiency by reorganizing viable but financially distressed firms, i.e., firms that are worth more alive than dead. Violating absolute priority undermines this commitment by introducing questions of redistribution into the process. It enables the rights of senior creditors to be plundered in order to benefit the rights of junior creditors. The U.S. government also wants to rush through what amounts to a sham sale of all of Chrysler's assets to Fiat. While speedy bankruptcy sales are not unheard of, they are usually reserved for situations involving a wasting or perishable asset (think of a truck of oranges) where delay might be fatal to the asset's, or in this case the company's, value. That's hardly the case with Chrysler. But in a Chapter 11 reorganization, creditors have the right to vote to approve or reject the plan. The Obama administration's asset-sale plan implements a de facto reorganization but denies to creditors the opportunity to vote on it. By stepping over the bright line between the rule of law and the arbitrary behavior of men, President Obama may have created a thousand new failing businesses. That is, businesses that might have received financing before but that now will not, since lenders face the potential of future government confiscation. In other words, Mr. Obama may have helped save the jobs of thousands of union workers whose dues, in part, engineered his election. But what about the untold number of job losses in the future caused by trampling the sanctity of contracts today? The value of the rule of law is not merely a matter of economic efficiency. It also provides a bulwark against arbitrary governmental action taken at the behest of politically influential interests at the expense of the politically unpopular. The government's threats and bare-knuckle tactics set an ominous precedent for the treatment of those considered insufficiently responsive to its desires. Certainly, holdout Chrysler creditors report that they felt little confidence that the White House would stop at informal strong-arming. Chrysler -- or more accurately, its unionized workers -- may be helped in the short run. But we need to ask how eager lenders will be to offer new credit to General Motors knowing that the value of their investment could be diminished or destroyed by government to enrich a politically favored union. We also need to ask how eager hedge funds will be to participate in the government's Public-Private Investment Program to purchase banks' troubled assets. And what if the next time it is a politically unpopular business -- such as a pharmaceutical company -- that's on the brink? Might the government force it to surrender a patent to get the White House's agreement to get financing for the bankruptcy plan? Mr. Zywicki is a professor of law at George Mason University and the author of a book on consumer bankruptcy and consumer lending, forthcoming from Yale University Press.

To: coug who wrote (79142)	5/13/2009 2:46:12 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

The Hidden Hand of Dick Cheney _______________________________________________________________ Out of office, he continues to push his tortured version of reality -- and his vision of an imperial presidency -- and there are signs he is succeeding. by Juan Cole Published on Wednesday, May 13, 2009 by Salon.com Dick Cheney is out there. He is defending torture, dissing Colin Powell, and genuflecting before radio personality Rush Limbaugh as the high priest of what's left of conservatism. His refusal to go quietly, unlike his much-reviled boss, is risky. He was a laugh line more than once at Saturday's White House Correspondents' Dinner. But the media's focus on the sheer spectacle of the ex-veep's antics, and on the Republican vs. Democrat feud he's stoking, underestimates the way Cheney's principles still inform many of the country's most crucial policies. Like the creatures in the "Alien" films, Cheney has planted some vicious spores in the bellies of his successors, which threaten to tear them apart as they mature. Can the new administration truly reverse Cheney's transformation of the United States into a 21st century empire, with the president an imperial figure above the law. The former vice-president is now a more reliable laugh-getter than vote-getter. At the correspondents' dinner, President Obama quipped, "Dick Cheney was supposed to be here, but he's very busy working on his memoirs, tentatively titled 'How to Shoot Friends and Interrogate People.'" Guest comedian Wanda Sykes went further, saying she found Cheney positively terrifying. "He scares me to death. I tell my kids, I say, 'Look, if two cars pull up and one has a stranger and the other car has Dick Cheney, you get in the car with the stranger.'" This week's news is about the grand old pit bull's struggle to continue to define his own party. Cheney emerged last Friday to warn on a North Dakota radio program that it would be a mistake for the Republican Party to moderate its message. (Does that mean it is now radical?) Then on Sunday Cheney told Bob Schieffer of "Face the Nation" that it was a mistake to stop using waterboarding and other forms of extreme interrogation, and that they did not constitute torture. He also poked fun at Colin Powell, questioning his credentials as a Republican and expressing a preference for the waspish Limbaugh as the party's leader. But don't dismiss Dick Cheney as a fading punch line, or as tragedy reprised as comedy. While the Obama administration has adopted large numbers of policies that directly contradict Cheney's positions, it would be a mistake to overlook Cheney's continued influence on the executive branch through the precedents set by the Bush administration. Among the former vice-president's most important legacies is increased government secrecy. Obama's Department of Justice continues to rely on an alleged "state secrets" privilege. It has thus tried to block lawsuits by victims who alleged they were kidnapped and tortured by U.S. intelligence even though they were innocent of wrongdoing, on the grounds that such trials would reveal state secrets. The same state secrets doctrine was used by Obama's DOJ in an attempt to block investigations of Bush-Cheney warrantless wiretaps. Likewise, the DOJ has attempted to block lawsuits seeking the release of Bush-era e-mails and to prevent prisoners held at Bagram air base in Afghanistan from appearing before a judge to challenge their imprisonment. Although the Obama administration is pledged to withdraw from Iraq militarily in a way that Cheney would never have contemplated, it is just as committed as Bush-Cheney to spreading good cheer about the new government in Baghdad. Secretary of State Hillary Clinton called the bombings by Iraqi guerrillas this spring the "last gasp" of "rejectionists," seeming to channel Cheney's allegation in 2005 that we were seeing the "last throes" of the insurgency. Red Washington and blue Washington both want to tell us stories about how Iraq will be OK and is just bedeviled by a few unreasoning malcontents who are on their last legs. On a trip to Afghanistan in 2004, Cheney told U.S. troops, "Your children and my grandchildren will live in freedom tomorrow because of what you're doing today." He warned them of continuing threats there, however, saying, "Our coalition still has important work to do." He added, "Freedom still has enemies here in Afghanistan. And you are here to make those enemies miserable." Obama has, likewise, tied the establishment of a stable government in Afghanistan to U.S. national security, and pledged to defeat the Taliban and al-Qaida (even though there does not appear to be any significant al-Qaida in Afghanistan anymore). Both Cheney and Obama tend to amalgamate al-Qaida (a small, mainly Arab, international terrorist organization) to the Taliban (a form of Pushtun fundamentalist nationalism with local concerns). Cheney's war in Afghanistan envisaged no end, and neither, apparently, does Obama's. Many of Cheney's harshest policies were rooted in a conviction that small terrorist groups might well get hold of nuclear weapons or other very dangerous armaments, and that all necessary steps must be taken to forestall that eventuality, even if it has only slight probability of occurring. (Journalist Ron Suskind called this notion the "one percent" doctrine.) The Obama administration just forced the Pakistani military to invade the Malakand region and to displace hundreds of thousands of civilians in the course of shelling and bombing a few thousand Taliban tribesmen. Among its rationales for this massive application of force was that the Taliban had advanced too close to Islamabad, and, apparently too close to that country's nuclear warheads. (In fact, the idea that a small force of rural Taliban could take over the Pakistani government or get access to its closely guarded arsenal is fantastic.) In the government's commitment to a doctrine of "state secrets" that protect the executive from the scrutiny of other branches of government, in the continued attempt to block lawsuits and release of important documents, and in the shielding of secret programs of torture, unlawful kidnapping and warrantless wiretapping, Obama is preserving policies to which Cheney is deeply committed. In configuring Pushtun fundamentalists in southern Afghanistan and northern Pakistan as a mortal threat to the U.S. and potentially even a nuclear power, the Obama administration is picking up themes from Cheney's old speeches and running with them. Cheney may or may not win his struggle for the soul of the Republican Party. If we are not careful, he will win the struggle for the soul of the country as a whole.

To: coug who wrote (79142)	5/15/2009 7:11:51 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Over 100,000 Americans May Have Swine Flu: CDC 14wfie.com By Steven Reinberg, HealthDay Reporter FRIDAY, May 15 (HealthDay News) -- While the official tally of confirmed U.S. swine flu cases topped 4,700 on Friday, experts at the Centers for Disease Control and Prevention now estimate the true number of infections at more than 100,000 nationwide. Also on Friday, health officials announced two new deaths linked to the H1N1 virus, bringing the nationwide total to five. "Today we had our fourth death reported from Maricopa County in Arizona," Dr. Daniel Jernigan from CDC's Influenza Division said during an afternoon teleconference Friday. "There more deaths and hospitalizations that we are monitoring," he said. The Arizona patient, a woman in her late 40s with an underlying lung condition, died last week, the Associated Press reported. Also on Friday, health officials in Nueces County, Texas, announced that state's third swine flu-related death, an unidentified 33-year-old man with multiple underlying health conditions who died May 5 or 6, according to the AP . The two new fatalities come after two others in Texas and one in Washington state. All of the victims had underlying health problems besides the flu, and most cases of swine flu occurring in the United States appear to be mild. In fact, "estimates of the confirmed and probable cases in the United States is probably not the best indicator of transmission at this point," the CDC's Jernigan said. "The outbreak is not localized, but is spreading and appears to be expanding throughout the United States. This is an ongoing public health threat," he said. It's a little hard to make an estimate of the number of people who have the H1N1 flu, Jernigan said, "but if we had to make an estimate, I would say that the amount of activity we are seeing with our influenza-like illness network is probably upwards of 100,000." He said that there seems to be more cases of flu generally in the U.S. -- both the seasonal and the new H1N1 swine flu -- than is usually seen at this time of the year. "There are 22 U.S. states that are reporting widespread or regional influenza activity, which is something that we would not expect at this time," Jernigan said. In other news, the CDC on Friday lifted its general warning that Americans avoid non-essential travel to Mexico, considered the origin and epicenter of the outbreak. Instead, the warning has been downgraded to a "precaution" that now advises people who might be at high risk for complications from the flu to reconsider travel to Mexico. And in a troubling sign that the swine flu outbreak has yet to run its current course in the United States, three New York City public schools were closed Thursday after dozens of flu-like infections surfaced and an assistant principal was in critical condition on a ventilator, according to published reports. New York City Mayor Michael Bloomberg said Thursday that four students and the assistant principal at a Queens middle school had diagnosed cases of swine flu. More than 50 students went home sick with flu-like symptoms. At another middle school in Queens, more than 200 students were absent Thursday, and dozens more were sick at an elementary school, The New York Times and the AP reported. The assistant principal reportedly had underlying health problems before he fell ill. The students who have taken sick in this latest round of infections seem to be experiencing mild symptoms, similar to routine flu, as has been the case for most people in the United States touched by the swine flu. When the outbreak began more than three weeks ago, hundreds of students and staffers at St. Francis Preparatory School, also in Queens, were sickened. Reports at the time said several St. Francis students had spent spring vacation in Cancun, Mexico. Mexico is believed to be the source of the global outbreak that has now infected more than 7,000 people worldwide. Also Thursday, vaccine manufacturers and other health experts met at the World Health Organization headquarters in Geneva, Switzerland, to plot potential strategies to combat the swine flu virus. The AP reported that drug companies were ready to start producing a swine flu vaccine, but many questions remain. They include how many doses to produce, particularly in relation to needed doses of seasonal flu vaccine. The expert group's recommendations will be forwarded to the WHO's director-general, Margaret Chan, who is expected to issue advice to vaccine manufacturers and the World Health Assembly next week, the AP said. But at least one infectious-disease expert said it was a "foregone conclusion" that drug manufacturers would be told to proceed with a vaccine for swine flu, technically known as H1N1 flu. "If we don't invest in an H1N1 (swine flu) vaccine, then possibly we could have a reappearance of this virus in a mild, moderate, or catastrophic form and we would have absolutely nothing," said Dr. David Fedson, a vaccine expert and former professor of medicine at the University of Virginia. One factor complicating a decision is that most flu vaccine companies can only make limited amounts of both seasonal flu vaccine and pandemic vaccine, such as that needed for swine flu, and not at the same time. The producers also can't make large quantities of both types of vaccine because that would exceed manufacturing capacity, the AP said. Testing has found that the swine flu virus remains susceptible to two common antiviral drugs, Tamiflu and Relenza, according to the U.S. Centers for Disease Control and Prevention. On Friday, the CDC was reporting 4,714 U.S. cases of swine flu in 47 states, and four deaths. For the most part, the infections continue to be mild -- similar to seasonal flu -- and recovery is fairly quick. The World Health Organization on Friday was reporting 7,520 cases in 34 countries. The swine flu is a highly unusual mix of swine, bird and human flu viruses. Experts worry that, if the new flu virus mutates, people would have limited immunity to fight the infection. The CDC is concerned with what will happen as this new virus moves into the Southern Hemisphere, where the flu season is about to start. The agency is also preparing for the virus' likely return in the fall to the Northern Hemisphere.