Dick Morris had an interesting article on RealClearPolitics this week. I thought it was a little bit negative, but before i get to that, let me explain what the article said. Basically, RCP is talking about how Washington now controls everything with some financial institutions. He explains how Obama just gave money to Chrysler to prevent workers from losing money and, in the process, jobs. Of course, though, Washington has guidelines. Much like JFK told the steel industry to lower prices in 1962, Obama is making sure that Chrysler, CitiGroup, and other companies, follow strict goals to ensure employee and company economic safety. Towards the end of the article, Morris said like this policy, and "King Obama," can and will bring the country down.
This is a tad bit ridiculous. The stock market is looking good right now. Many are saying we could be coming out of the recession, and yet we still have to hear about this. To be honest, it's a little ridiculous. Seems like a bit of chicken little predicting that this process will lead to the sky falling. But, it seems to never get old though, to fear and fear and fear, and that's what this article is doing.
Country Looking Happier
On a completely different note, Dana Milbank reports that the nation is growing happier with the leadership of the country and the direction it is headed. The economy is showing signs of recovering, the swine flu is becoming less and less of an issue, droughts are ending, and the stock market is rising. It was an interesting article, and part of that article stated that in October 8 percent of people were happy with the direction the nation was going in. Now, that number is around 50 percent.
As an Obama supporter, this article made me feel a lot better than I did after reading the first article. I mean, I am a little bit biased, but I can see the positives this country is making. The first clear sign of that is the fact that the stock market is really, really, really improving. Whereas, it was under 7,000 in January, it now sits above 8,400 in the Dow Jones Industrials, a growth that probably will not take it back to its highest point at around 13,000, but will allow us to recover right now when we clearly need it. Couple that with the fact that the housing market is getting better. I just see times right now as being good, something that is a biparty of the new leadership in government, especially in the federal government.
Obama's Chrysler Plan Could Work
Daniel Gross had an interesting post this week on Newsweek online. Basically, he told people to stop complaining on how Obama is handling the Chrysler bankruptcy. Basically, some small investment firms had a lot of their funds "lacerated" by Obama, who called them greedy, and that they were trying to make a profit and that's it. Federal bailout funds had been given to the larger investment firms, and this is something that Obama is receiving flack for. Here's one of the reasons that Gross says why this plan actually works:
"First, the bank lenders always could have opted out. Chrysler employees couldn't. Over several decades, Chrysler's employees lent a big chunk of their labor in exchange for contracted health care benefits and payments. But there's no secondary market for these types of claims on a company's assets. The employees couldn't cut their losses and sell their pension rights to a third party. Nor could they hedge by trading options or buying credit default swaps. By contrast, holders of bank debt and bonds weren't long-term lenders. They may have jumped in last year, or last month, looking for a quick trade. And when it didn't work out, they had an easy out: sell the debt to another investor."
I thought this article was very interesting. I can't really understand it all, because I don't know the complete situation with Chrysler, but I can safely say that any investor in Chrysler is an investor I would not want to be. I don't really think we should protect anybody in a bankruptcy situation with tax dollars, even if it is the United Auto Workers, and protecting unsecured lenders over secured lenders can be dangerous in the longterm, but I think companies that have received federal aid like Chrysler might be an exception to the rule.
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