The Fables of Aesop is out now!

Where are we headed?

In a crisis it is easy to put politics first, but if lenders fear their rights will be abused, other firms will find it more expensive to borrow, especially if they have unionised workforces that are seen to be friendly with the government.It may be too late for Chrysler’s secured creditors and if GM’s lenders cannot reach a voluntary agreement, they may face a similar fate.

That would establish a terrible precedent. Bankruptcy exists to sort legal claims on assets. If it becomes a tool of social policy, who will then lend to struggling firms in which the government has a political interest?

The Economist

President Obama is a calm and rational person who seems to base his decisions and his public policies on easily manipulated sentiments. I hope that is not true, but he causes me political anxiety.

His desire for empathy on the supreme court is generous, but it also means that people on the court can justify their decisions by appealing to empathy, and then who can argue with them.

In other words, where restraint is most needed, an excuse for assertiveness has been provided. As long as good people sit in the Supreme Court this is great. But what will happen when somebody who isn’t pure of heart sits on the highest judicial seat in the country?

Consider also the handling of the Chrysler bankruptcy. We all care a great deal about the workers who have lost their jobs, but what will happen to the economy when lenders determine that it is dangerous to lend money in a country where political sentiment is allowed to change the rules.

I remain hopeful for what President Obama might be able to do for our country, but I cannot pretend that I don’t worry about this apparent hostility to those who lend money (banks, investors, and everybody else). It’s too easy to attack them, even though they are managing money for the workers who need the money to keep moving in order to keep their jobs.

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