A Lawless Presidency - Part 6 - "Gangster Government" Author David Freddoso Explains Obama's Abuse of Bankruptcy System

Bob Price and David Freddoso "Gangster Government" Author

President Barack Obama has been on a mission of abusing the bankruptcy courts to move forward his political agenda of redistribution of wealth and making paybacks to unions for political support. This directly affects voters in key battleground states. The Delphi, General Motors and Chrysler bankruptcies are perfect examples of how the Obama Administration abused the process of bankruptcy courts to steal pensions, violate contract law and provide rewards to unions he needed for support in this election process - particularly in Ohio, Michigan, Pennsylvania and Indiana.  While in Washington D.C. I stopped by the Washington Examiner office and spoke with David Freddoso, author of New York Times bestseller, Gangster Government.

Gangster Government focuses on the Obama Administrations abuse of the bankruptcy process. President Obama announced during his 2008 election campaign that he would reform the courts to redistribute wealth.  Freddoso confirmed this explaining, "What we had was a case of Rahm Emanuels famous quote that you dont waste a crisis. In fact, in election 2012, were seeing how the auto bailout is being used as a political tool. The whole bumper sticker slogan that GM is alive and Osama Bin Laden is dead has become one of Obamas tools for winning in states like Michigan and Ohio. What we saw in the Chrysler bankruptcy especially was a method of gaming the bankruptcy process, creating a shell company and then selling all the assets to the shell company to create the new Chrysler. In doing so, dumping the claims of the senior creditors in a way that basically the whole bankruptcy code was set up to prevent."

Freddoso went on to express outrage about the General Motors bankruptcy and the literal theft of pension benefits from the salaried pensioners at Delphi.  He said, "The GM bankruptcy, the most egregious, the part that really cries out to Heaven for a lot of people has been the way in which salaried workers for Delphi were left out in the cold while the union workers got their pensions restored, and its complicated how they pulled that off, but its something that just the injustice of it is very clear. The salaried workers are stuck with the tiny fraction that the benefits that they would have gotten through the quasi government agency or the government agency really that backs up pension plans and benefit plans, whereas the UAW workers, their pension plan was fully honored because of the governments involvement with GM, and in both cases, for both companies, the bailouts so heavily favored the UAW."

Bob Price and David FreddosoUnder the control of The Lawless Presidency, General Motors was forced to build unprofitable cars that no one wants to buy.  This and other administration policies has kept our economy from recovering.  Freddoso explains, "Nobody blames President Obama for the crisis we had right before he was elected, but theres a lot of blame to go around when it comes to why isnt the economy recovering? Well part of it is this Administrations political policy, in some cases conforming to the law and in many cases not conforming to the law as with the drilling moratorium and that sort of thing is working against an economic recovery by trying to get business to conduct itself according to a politically correct model."

Gangster Government is a critically important book for voters to understand before going to the polls on Tuesday.  Certainly listen to this interview, but also get a copy of the book.  President Obama tells us what he is going to do.  If only we will listen.  And if only we will vote.  The candidates have done their work.  Now it is up to you.  If you have already voted, get your like-minded friends to the polls on Tuesday!  If you have not - this is on you!  Get out and vote!

TRANSCRIPT OF INTERVIEW

Bob Price: As part of my series on the lawless presidency and doing research on this topic, I came across a book Gangster Government by David Freddoso of the Washington Examiner. David, we appreciate you having us in here today to talk to you about your book and about President Obama and about President Obama and his Administration. I understand that this book came about as a result of a deliberate plan or tool, if you will, being used by the Obama Administration to use the bankruptcy courts to affect political change. 

 

David Freddoso: Right, thats exactly right. What we had was a case of Rahm Emanuels famous quote that you dont waste a crisis. In fact, in election 2012, were seeing how the auto bailout is being used as a political tool. The whole bumper sticker slogan that GM is alive and Osama Bin Laden is dead has become one of Obamas tools for winning in states like Michigan and Ohio. What we saw in the Chrysler bankruptcy especially was a method of gaming the bankruptcy process, creating a shell company and then selling all the assets to the shell company to create the new Chrysler. In doing so, dumping the claims of the senior creditors in a way that basically the whole bankruptcy code was set up to prevent. This is something that has been written up in scholarly articles. In the late nineteenth century, this was a common practice to where you had these sort of rubber bearing bankruptcies where the management would sell, and their friends and others that they favored would end up getting everything in the end when the company went under in the new company  that got formed and other people got left out in the cold, and the bankruptcy process was supposed to establish a fair way for everyone to get in line that there was a standard for different levels of creditors, whether its the contractors, the employees, the creditors, the junior creditors, the senior creditors, that there was supposed to be an order in which things were broken up in amounts that were supposed to go to various entities, and that was just sort of overthrown. We went back to the nineteenth century with that bankruptcy. The GM bankruptcy, the most egregious, the part that really cries out to Heaven for a lot of people has been the way in which salaried workers for Delphi were left out in the cold while the union workers got their pensions restored, and its complicated how they pulled that off, but its something that just the injustice of it is very clear. The salaried workers are stuck with the tiny fraction that the benefits that they would have gotten through the quasi government agency or  the government agency really that backs up pension plans and benefit plans, whereas the UAW workers, their pension plan was fully honored because of the governments involvement with GM, and in both cases, for both companies, the bailouts so heavily favored the UAW. It was something that was clearly engineered to save them from themselves. Thats what the bankruptcies really were about, helping important interest groups that are going to be crucial for President Obamas reelection.  

Bob Price: Let Freedom Ring has got an ad running right now and part of that ad shows Senator Obama, at the time, running for office and saying a deliberate policy that he was going to use the bankruptcy courts. He said that currently the bankruptcy courts favor the creditors and ignore pensioners, and he said he was going to change that to protect pensioners, but what weve seen in effect is what he really meant was that he was going to really do was protect the union pensioners.

 David Freddoso at Washington Examiner

"Gangster Government" Bestselling Author David Freddoso at The Washington Examiner 

David Freddoso: Right, not all pensioners are created equal, and not all jobs are created equal for this Administration. If you want to look at another way that President Obama is certainly exceeding whats traditionally understood as presidential authority, it has to do with attempting to reshape entire industries to make them conform to his image and likeness. We see GM going on this binge building cars that are greener but dont make any money that are more environmentally friendly but are losing $50,000 for every Chevy Volt supposedly they produce, and whether thats the exact number, theres dispute about that, but thats the main point is that businesses do not survive by engaging in politics with their business model. Some businesses are political businesses right, but if youre selling cars, you sell the car that makes money, you dont sell the car that President Obama likes. In several industries, including energy, including the automotive industry, youre seeing the administration throwing its weight around to the extent possible in order to cause the industries to reshape themselves. Its a very clunky and inefficient, frankly counterproductive, way of reviving an economy thats in huge trouble, as it was when Obama inherited it. Nobody blames President Obama for the crisis we had right before he was elected, but theres a lot of blame to go around when it comes to why isnt the economy recovering? Well part of it is this Administrations political policy, in some cases conforming to the law and in many cases not conforming to the law as with the drilling moratorium and that sort of thing is working against an economic recovery by trying to get business to conduct itself according to a politically correct model. 

 

Bob Price: The House of Representatives has been very involved in trying to resolve the Delphi issue in particular, its such a great injustice. I read today that the chairman of the House Ways and Means Committee is actually going to throw the full weight and power of the Ways and Means Committee behind this issue as well. Where do you see this going in finding a resolution. Will the Obama Administration bow to this power thats coming after them or are they just going to leave these people hanging? 

 

David Freddoso: I dont see any reason why they would have to at this point. The height of government power over GM was right when the bailout happened. That was when they had all the leverage. That was when as Obamas auto czar Steve Ratner wrote they probably should have exacted more concessions from the union. That was when political power in deciding which dealerships would shut down was at its highest. I think its certainly diminished since then, and that theres no political incentive anymore because that whole thing is now done, were headed into an election, and after the election is over, theres certainly no leverage anymore. President Obama has said hell have more flexibility after the election. Thats absolutely true, and so theres no reason to come back and save Delphis salaried pensioners unfortunately unless you do so out of a sense of justice. Theres no more reason to do that than there would be to take it away from the UAW people at that point. So as far as the Houses and Congresss involvement , one of the things I discuss in Gangster Government is hoe President Obama has augmented his executive power at the expense of Congress and how people in both parties should be very worried about this because you know someday were going to have a Republican president and when he starts appointing people when the Senate isnt in recess using recess appointments, there are going to be a lot of Democrats very upset. Congress, in theory, has power and can try to affect these issues, but theyre very limited in what they can do. Ultimately Obama has decided that he has this we cant wait agenda, hes going to do a lot without Congress and he has the luxury of ignoring most of what Congress does because he has the veto power over most things except over Constitutional amendments and possibly things like the budget resolutions so there may not be a whole lot of hope, but its better to have a powerful advocate than not to have one, and so where the salaried Delphi employees have some hope is simply that theyre not completely being ignored. Someone in government is paying attention to their plight. 

 

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