“The rule of law will save us”

May 21, 2009

It saves us from chaos within our own country. It will save us from jihadists who seek to kill Americans and destroy us. So say the Democrats. Lanny Davis said today that “The rule of law is the basis of our security.” Former President Bill Clinton couldn’t have said it better himself. Anyone who has had to deal with the police when seeing a crime committed will see how laughable that statement is. Police usually show up after the crime has already long since occurred. Nothing against them. Just clearing up a misconception.

The law in its best form provides social stability. Nothing more. It’s a compact among us all about restraints we agree to place on ourselves so that we do not unduly distress or hurt each other, and provides compensation, criminal or civil, for harm that one party has done to another. This is designed to promote social harmony. I can agree that this promotes general security, because we won’t be threatening and killing each other to save our own skins, but in terms of addressing threats who have no regard for social harmony to begin with, it has nothing to do with security. The law in most cases can only address them after they have hurt someone. It’s only in the lucky cases where law enforcement manages to catch a criminal before they cause harm.

But the Democrats will say we will be ever vigilante against terrorist threats, but our vigilance will be restrained by our sense of civility. “We will not compromise our sacred values.” They believe in a social scientific sort of way that by showing the world that we live by our “values” (as they define them) at home and abroad the jihadists will not be able to recruit as well as they did under Bush, because we will be less hated, and we will gain the support of countries around the world in gathering intelligence on Al Qaeda’s plans. That may work in Europe (though I’m not counting on it), but I doubt it will work in the Middle East. What, you think the jihadists don’t have a better hold on the imaginations of like-minded Muslims than we do? The truth doesn’t matter. It doesn’t matter what we do to make ourselves look good. It’s a political campaign. You think Democrats care how much Republicans try to make themselves look good? They’re going to try to find a way to make Republicans look bad no matter how much they try to look agreeable to Democrats, and vice versa. Get a clue! It’s all about PR, though in the Middle East we’re dealing with a very different cultural context.

What galls me is that if one were to really look at what Obama is responding to, both complaints about Guantanamo and “torture” were, like the myth of CO2 causing global warming and the “hundreds of thousands of civilians killed in Iraq”, an anti-American PR campaign mounted by certain NGOs and European governments. They never had a basis in reality, but it doesn’t matter. The point was to make us a whipping boy for their own domestic politics, and in some ways to try to influence us to conform to their values. They have succeeded, perhaps beyond their wildest dreams.

The so-called “torture” techniques are the same ones we use to train our own soldiers to resist harsh interrogation! If you believe we have tortured our detainees then you must believe we torture our own soldiers. I have heard from a few soldiers who have subjected themselves to this training–one of them was former Col. Oliver North–and they say flat out it’s not torture. What a joke! I’ve seen one of Fox News’s own correspondents be waterboarded by our military to demonstrate what it really is. He clearly looked uncomfortable, but not in danger of being killed, or in fear of his own life. Now ask yourself, would a sane person volunteer to subject themselves to torture? What if he had been offered, “How about we demonstrate on you how you pull out someone’s fingernails?” You think the reporter would’ve volunteered? Not on your life! Think about this. It’s infuriating that people are getting away with calling our enhanced interrogations “torture” like they’ve succeeded in making people think that our cars, trucks, factories, and the very things we use for energy (not to mention our own breath) cause global warming! These are our new urban legends, and what’s shameful is that our own government is promoting them. Be under no illusions. We live in an age of irrationality.

Today I heard Craig Silverman on the Caplis & Silverman show on 630 AM talk about the “torture” issue. He asked callers “Should the Denver Police Department waterboard criminal suspects?” trying to equate our wartime detainees to “criminals”. I also heard Sen. John McCain say that Abu Ghraib was a situation where we tortured people. Abu Ghraib was not torture, at least as far as I could tell from the pictures. True, the “techniques” used were inappropriate, intimidating, and humiliating, but that’s not what torture is. It was criminal behavior, because the “interrogators” (some weren’t even trained as such) were violating U.S. policy. Torture is doing things to a detainee that cause excruciating pain and bodily injuries. That was never sanctioned by our enhanced interrogation policy and I hate seeing people with a straight face and conviction promulgate this lie. They either don’t know what they’re talking about, but are convinced they do, or they are carrying out a diplomatic feint to appease certain allies. In either case I consider it short-sighted and it risks our national security.

Both Silverman (today) and McCain (in the past) have brought up the history of waterboarding. Silverman said it goes back to the Spanish Inquisition. Both Silverman and McCain have brought up how it was used by the Japanese in WW II, and that we accused the Japanese of torture because of this practice. There’s a problem with this argument. The Japanese form of waterboarding was not the same as ours. They’d pump water into the victim’s stomach until it was full, and then press down on it, causing the water to go up the esophagus (throat) and down the trachea (windpipe), and was potentially deadly.

From what I could see of the Fox News demonstration, water is poured into the victim’s mouth until he reacts, raising his torso and arms, and shaking his head. At this point the water flow into his mouth is stopped, and he is allowed to clear the water from his mouth and throat. It’s a repetitious process designed to induce stress, but not to cause bodily harm. As was stated in the official documents which revealed our full catalog of formerly sanctioned techniques a medical doctor was always just a few yards away in case something did go wrong and the detainee’s life was in danger.

Liberals always pipe up that we violated the Geneva Convention. No we didn’t. The Convention is a pact between governments about rules of war. The reason we made the agreement was to make war a little more civilized. The people we captured did not fit the qualifications for Geneva Convention protection. This whole…(sigh) Overseas Contingency Operation (barf!) is uncharted territory. Even so, we have shown restraint.

People, we need to get real. War is a rough business. It disgusts me that there are still a lot of people who haven’t figured this out yet. We have shown restraint in this war. Our enemies have not. The idea that we’ve violated international law is a lie as far as I can see. I’m open to reasonable argument, but I have little patience for political games being played with our national security.


Obama is the law

May 8, 2009

In “The liberal/conservative divide explained” I talk about an interview with Thomas Sowell from October 2008. The interview is on his new book called A Conflict of Visions. The unconstrained vision describes Obama and the Democrats to a tee. I revisited this interview in light of the recent situation with Chyrsler.

Thomas Sowell had these relevant words to say.

From his book, A Conflict of Visions:

The constrained vision sees market economies as responsive to systemic forces, the interaction of innumerable individual choices and performances. The unconstrained vision argues that this is not how the economy operates, that it is currently obeying the power of particular interests, and should therefor be made in the future to obey the power of the public interest.

In the interview Sowell followed this up with:

They imagine that they can define what’s in the public interest, by themselves. Whereas in a market, each individual defines his own interest himself, and acts accordingly, interacting with other people and accommodating other people, and competing with other people.

I didn’t understand the significance of the situation with Chrysler until a couple days ago when I read Michael Barone’s article on it (h/t Tammy Bruce).

Barone grew up in Detroit, and said he was saddened by Chrysler’s plight…

But my sadness turned to anger later when I heard what bankruptcy lawyer Tom Lauria said on a WJR talk show that morning. “One of my clients,” Lauria told host Frank Beckmann, “was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”

Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.

This of course is a violation of one of the basic principles of bankruptcy law, which is that secured creditors — those who lended money only on the contractual promise that if the debt was unpaid they’d get specific property back — get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.

After that came a denunciation of the objecting bondholders as “speculators” by Barack Obama in his news conference last Thursday. And then death threats to bondholders from parties unknown.

To the untrained reader one might get the idea that Barone is saying that the Obama Administration is breaking the law, but that’s not what he’s saying. He’s saying that the Obama Admin. has in effect sidestepped the part of the bankruptcy law that would normally apply in a case like this, by coming to Chrysler before it went into bankruptcy, with a pre-packaged deal, with most of the other bond holders signing on to it. Barone talks about how all of the partners that have signed on to this deal are banks who have received TARP funds, and suggests they were pressured to go along. Some of the bond holders (hedge funds), who are not TARP recipients, objected, citing the same rule that Barone talked about, and their fiduciary duty to maximize their return for their stockholders. In other words, they’re acting the way a corporation would normally act. The others are not.

The Obama Admin. wanted to get everyone to sign on before Chrysler went into bankruptcy, but that didn’t happen. The issue was going to go to bankruptcy court, but I saw an interview with Lauria today saying that the last bond holder has caved, and the Obama Admin. deal will be accepted.

What’s being violated by this deal is the spirit of the law. The bond holders lent money to Chrysler under explicit conditions in a contract that spelled out what would happen if Chrysler went into bankruptcy. This is called secured debt and if this had been decided in bankruptcy court the judge likely would’ve said the secured creditors must be paid back first. The Obama Admin. has managed to convince the bond holders to forfeit their contractual claims and take a loss, which in most circumstances would seem real odd, because normally they would have a fiduciary responsibility to seek the maximum return they’re allowed in the interest of their stockholders (and in the case of the banks which are using TARP funds, that’s us, the taxpayers!).

Michael Barone gets to what is really troubling about this deal, and he’s the only one I’ve heard talk about it:

Think carefully about what’s happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, is seeking to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party.

Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.

The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series. [my emphasis in bold italics]

A commenter to Barone’s article, named Pablo Panadero, made a good point:

It will be interesting whether Ford is allowed to oppose the deal. If the UAW actually is rewarded a piece of Chrysler, Ford will then have a union that is substancially invested in their competition. Thus Ford’s union employees will have a vested interest in seeing success by their competition. By any reading of the anti-trust laws, this is clearly a violation.

Ford should be front and center on this issue. Just imagine what will happen come bargaining time. UAW will of course select Chrysler as the strike target, and the investors (re:Obama) will be quick to grant their demands to protect the “investment”. Thus Ford will be completely screwed when they come to them for a contract. The best thing for Ford to do is then move all of their production outside UAW’s reach. 

This has all the makings a true financial disaster. But is this really Obama’s agenda? Makes me start to wonder.

Obama acts like the hedge funds are just out for themselves. They are out for themselves. That’s part of the idea, self interest, but one in which there are other people who benefit, people with pensions, people’s retirements.

In the interview I cite above, Thomas Sowell says that in the unconstrained vision the “right leaders” are put in place (“The One”, etc.), and what ends up happening is the leader becomes the law. Rather than a nation of laws we become a nation of people with all of their prejudices and foibles holding sway. The Founders of the U.S. intended for the people’s voice to be heard, but for it to be tempered by a system of competing institutions and competing interests, and a specific process that allows those interests and institutions to set the rules of the road. Obama’s regime of governing violates this idea. Instead of respecting the intent of the laws which were formed by the people’s (and business’s) representatives, he decides what principles of law will be respected. President Bush had some characteristics of this as well. Given how our structures were effectively “hacked” on 9/11 I excused his bending of some rules to help fight the jihadists.

I am making a value judgement here, because I think that the UAW and its members are in denial. They are clinging desperately to what they have left. They have their prize today, but it will continue to slip away from them. They cannot continue the way they have in the past. It is unsustainable. In the process they will continue to destroy value in our economy, and until the government turns off the spigot we the taxpayers will pay for their denial.

Any way you look at it Obama is distorting the market to fit his vision, and in the process he is distorting people’s expectations about the law as well. Obama is taking steps to try to politicize the economy, but it’s going to fail, as all attempts to do this have. Dyed-in-the-wool leftists have believed for generations that if money was directed to the right places, determined by them, that the right people (their constituents, the ones they deem to be the downtrodden) will prosper. Capitalists will be allowed some prosperity, but not as much as they’d like. Historically the end result is one that nobody is happy with. Workers do not end up prospering, and while the wealthy aren’t too happy, because they can’t find as many investment opportunities as they’d like, and they feel pushed around by the government, they end up being relatively better off than anyone else, because they’re smart about their money. Trying to direct “the unseen hand” of the economy always fails. It’s a fool’s game.

It’s true that there are capitalists who take actions that destroy value. I agree that government in its “traffic cop” role should put in prudent regulations that limit value-destroying activity as much as possible. What I see happening is that Obama is also taking actions that destroy wealth-creating activities. Part of maintaining a healthy economy is creating a consistent playing field where capital investors can count on certain conditions, not a capricious economy whose rules change depending on which way the political winds are blowing. They can’t count on a positive return for their money (in most cases), but they can count on certain rules applying to their investments. That’s something that’s needed, and we’re not getting it.

Edit 5/16/09: George Will wrote a column talking about the same subject.

I’d like to close with a couple videos that I think show the fallacy of the political actions of the Obama Admin. Whenever I’ve seen cases of an interest group vying for government help or favoritism, this episode of The Twilight Zone (1980s) comes to mind for me, called “Button, Button”. I can see the point of this story was to show what people will do for money, greed. That’s part of my point here. Obama is replacing one party’s greed for another. The key part of the story for me is where the mysterious man (think of him as representing the government) talks about how the couple’s decision will affect people “they don’t know”, and in the end reveals the catch: The same deal will be offered to someone else, and it will be somebody who does not know them!

“Button, Button”, Part 1:

Part 2: