The left’s misfire on gun control legislation
Apparently Barack Obama threw a bit of a hissy fit when the gun control legislation went down in the Senate. And, as James Taranto points out, Gabby Giffords managed, in a 900 word screed, to employ about every logical fallacy one can employ in here denunciation of the failure of the legislation to pass.
Finally, the NY Time’s Jennifer Steinhauer weighs in claiming that the vote went against the will of the people and that it was the gun lobby’s fault.
Gun lobby? Oh, we all know about the NRA. However here’s something I don’t think the left fully comprehends. The real “gun lobby” is the majority of the American people. In the US, there are 88.8 guns per 100 people. The highest in the world. Yet all the rhetoric about increased gun violence simply doesn’t pan out. Certainly there have been some high profile sprees and shootings, but on the whole, there hasn’t been an increase in gun violence, and certainly nothing like being claimed.
The left’s problem may be that the people of the US know that. And they’ve also sniffed out the ulterior motive for this incremental attack on the 2nd Amendment.
So while they throw their hissy fits and put forward their fallacious arguments, they continue to miss why there is so much resistance to gun control legislation.
Because, quite frankly, a large portion of the people simply don’t trust government. And you can add to that a fundamental understanding that self-defense is a personal responsibility and right.
The left just can’t wrap it’s head around that concept. If they pass laws and give the responsibility to government then we’ll all be safer, right?
Sarcasm aside, don’t even begin to think this is the end of the struggle.
They’ll be back again soon.
Just hide and watch.
~McQ
NYT: Raise the minimum wage!
You may find this interesting … I did. The New York Times editorialized about the minimum wage on the 12th of February. Unsurprisingly, they’re for raising it:
New York is an expensive place to live, and unaffordable for workers struggling on $7.25 an hour, the federal minimum wage. Nineteen other states, recognizing that the federal minimum is too low for survival, even with food stamps or other government assistance, have increased their minimum above that level. Lawmakers in Massachusetts raised it to $8 an hour. Connecticut’s is $8.25, and it is $9.04 an hour in Washington State.
It is time for New York to raise its minimum wage enough to help more than 600,000 struggling workers. Assembly Speaker Sheldon Silver is vigorously pushing a bill to raise the minimum to $8.50 an hour immediately and to adjust it each year for inflation. This should not be a controversial measure.
Want to know what would be a controversial measure, at least as far as the NYT would be concerned? George Mason University economics professor Donald J. Boudreaux (Café Hayek) answers the Times:
In the same spirit of demanding that government improve people’s economic well-being simply by ordering that people be paid more, allow me to make a similar plea on your behalf.
The newspaper business today is in difficult straits. So I hereby call upon the legislature in Albany to force you and other newspapers in New York to raise your subscription and advertising rates by 17.2 percent (the same percentage raise that you want to force low-skilled workers to demand from their employers). Voila! If your economic theory is correct, your profits will rise. And the magnitude of these higher profits, we can assume (just as you assume in the case of low-skilled workers), will be greater than any negative consequences that might be unleashed by such legislative interference in your ability to determine the terms on which you sell your services.
I. Loved. That. Answer.
It is the perfect comeback to those who would use the force of government to arbitrarily raise wages and commit your money to their priorities. As with most things, they’d never stand for you doing the same to them. Boudreaux’s answer highlights that in spades. It’s perfect. And he challenges them with “if your economic theory is correct …”. I laughed out loud reading that.
Oh, and we demand that the NYT adjust their subscription and advertising rates each year for inflation.
That shouldn’t be a controversial measure, should it?
You can hear the huffing and puffing in the NYT boardroom from here.
[HT: Villainous Company]
~McQ
Twitter: @McQandO
The NYT tries to revive the “crazy vet” meme
One of the most enduring themes of the Viet Nam era was that of the badly damaged Vietnam vet who came home and created mayhem – all because of his experiences and training. It was a myth that died hard only because the war was so unpopular and so many people wanted to believe it.
BG Burkett in his book Stolen Valor, completely takes all the underlying premises that supported that myth apart with facts and statistics. I don’t have time to relate them all but I cannot recommend that book highly enough.
That said, this article by Luke Mogelson in the New York Times Magazine (via PJ Tatler) entitled “The Beast In The Heart Of Every Fighting Man” is a travesty. It’s subhead gives you a clue why:
The case against American soldiers accused of murdering Afghan civilians turns on the idea of a rogue unit. But what if the killings are a symptom of a deeper problem?
Instead of telling the story of the now infamous “kill squad” from the 5th Stryker Brigade out of Ft. Lewis WA, and the reasons for their actions and activities, Mogelson does what many hacks do and tries to conflate what happened in a single platoon out in the middle of nowhere in Afghanistan with a problem that infects the entire military.
Granted – no, stipulated – war is hell, it changes people, it is something which anyone who has ever experienced it up close and personal would never wish on another person. And yes, there are stresses that come from multiple deployments, leaving your family behind and watching men you think more of than anyone in the world die in action. But those stresses aren’t unique to these wars. Yes, multiple deployments are fairly unique. But then the alternative is the duration – which my parents did in WWII – 4 years of war, from beginning to end.
But that’s not the point of the article. Mogelson does a credible job of telling the “kill squad” story. It’s a horrible story in which a deviant but charismatic junior leader, in an isolated outpost, talks some impressionable squad members into doing the unthinkable all while the weak leadership in charge of the platoon failed in their roles.
Had he left it here, I could actually find myself saying nice things about it. It is a story that must be told.
But he didn’t leave it there. He started to veer in that old and predictable lane in which the military is indicted for making robot killers out of their charges and becoming so good at it that things like this happen.
In fact, just the treatment of the title outlines his attempt. And interestingly, later on in the article, he uses the full quote from Gen. George C Marshall from which the line comes:
“Once an army is involved in war, there is a beast in every fighting man which begins tugging at its chains. And a good officer must learn early on how to keep the beast under control, both in his men and himself.”
Mogelson deals with the first part, but he makes absolutely no effort at all to understand the second part and how critical it is to the institution he attacks. That is, “good officer[s]” and NCOs do keep control of it and they comprise the vast majority of the leadership in our military. That’s why the military spends so much time and effort training them to do so.
Mogelson is reduced to using the Philippine insurrection and My Lai, two isolated examples decades apart as some sort of proof of his premise. They are, instead, outliers. As was Abu Ghraib. There are always going to be bad people found in good institutions. We see bad cops – but we don’t think all policemen are bad nor do we pretend that law enforcement as a whole deserves blanket condemnation. We realize that with any organization of size which deals in a deadly business that there may be some bad people who we will have to weed out at some point or another.
However, Mogelson, via sociologist Stjepan Mestrovic, rejects that premise:
If we lack a sense of collective responsibility for these more recent war crimes, Mestrovic blames this on our readiness to believe that such occasional iniquities are aberrations perpetrated by a derelict few, rather than the inevitable result of institutional failures and, more generally, the nature of the conflicts in which we are engaged.
Institutional failures? A military that fights the cleanest wars imaginable, does everything in its power to avoid collateral damage, demands that its leadership monitor and control that so-called “beast” by being totally involved and leading from the front. A military that has fought like no other military has ever fought in history is an institutional failure?
Yeah, it was 40 years ago too according to these experts. Except it wasn’t.
Welcome to my world of those long gone days of the Viet Nam era when exactly this sort of nonsense was written about Viet Nam and it’s vets. And, if you read the comments to this story, you’ll find “mission accomplished” is appropriate:
These men and women return to abuse and often kill innocent people stateside. Their minds are permanently mangled.
The United States military is not protecting us but putting every US citizen in grave danger from the killing robots they have created..
END the military. We will all be safer.
And
In sum, the military’s purpose in training young men and women is to twist, destroy, and pervert basic human decency, empathy and consideration of other human beings– everything that most likely his or her family has also strived to cultivate in him or her– in order to serve the aims of empire.
Thus, the military is essentially an evil institution.
The old meme is resurfacing and gaining some traction. As I said way back then, “never again”.
The military is both an honorable profession and a extraordinarily necessary one. Its members are not “victims” of some evil institution. They’re not robots. They’re not “killing machines” who come home to “abuse and often kill innocent people stateside”. The purpose of our military isn’t now nor has it ever been to “pervert basic human decency”. It’s to do a necessary and often distasteful and dangerous job for the BENEFIT of those back home – for their safety and freedom.
Ironically the NYT publishes this garbage just after some hard men heroically risked their lives in a daring raid to kill a mass-murdering terrorist who struck the very city they print this in.
This is the thanks they get.
~McQ
Libyan update
Not much new to report – stalemate continues. However what we seem to be finally learning is that the so-called “rebels” aren’t organized enough to do much of anything to force the situation:
Too little is known about Libya’s rebels and they remain too fragmented for the United States to get seriously involved in organizing or training them, let alone arming them, U.S. and European officials say.
U.S. and allied intelligence agencies believe NATO’s no-fly zone and air strikes will be effective in stopping Muammar Gaddafi’s forces from killing civilians and dislodging rebels from strongholds like Benghazi, the officials say.
But the more the intelligence agencies learn about rebel forces, the more they appear to be hopelessly disorganized and incapable of coalescing in the foreseeable future.
However, that hasn’t stopped the rebels from asking for a $2 billion dollar loan from the West. They’re never too disorganized to demand money, are they? Hey, this is the Arab League’s baby – let them front any loans. Oh, and check out this photo for a little picture of the reality we’re talking about.
Meanwhile, NATO could use a few more aircraft:
Nato Secretary General Anders Fogh Rasmussen has told a foreign ministers’ summit the alliance needs "a few more" aircraft for its mission in Libya.
Mr Rasmussen said he had received no offers from any ally at the meeting in Berlin to supply the extra warplanes, but he remained hopeful.
I’m sure he does. Of course, this situation has little if anything to do with the stated mission of NATO (a defensive pact), but it is an organization in search of a mission. One of the reasons it has to beg for other participants is there’s nothing binding about war’s of choice on NATO members and, as you might expect, a good number of them ore sitting this one out.
Finally, our leaders fight back with a NYT editorial. Obama, Cameron and Sarkozy have an op/ed there addressing Libya. This particular paragraph caught my eye:
We must never forget the reasons why the international community was obliged to act in the first place. As Libya descended into chaos with Colonel Muammar el-Qaddafi attacking his own people, the Arab League called for action. The Libyan opposition called for help. And the people of Libya looked to the world in their hour of need. In an historic resolution, the United Nations Security Council authorized all necessary measures to protect the people of Libya from the attacks upon them. By responding immediately, our countries, together with an international coalition, halted the advance of Qaddafi’s forces and prevented the bloodbath that he had promised to inflict upon the citizens of the besieged city of Benghazi.
Tens of thousands of lives have been protected.
I’m sorry, but I couldn’t help but think “jobs created and saved” when I read all of that monkey poo.
Meanwhile in Syria, they’re issuing instructions not to kill over 20 protesters a day because apparently that’s a threshold they know the great protectors of certain civilians will ignore. Besides, some Democrats think Assad is a reformer, and don’t forget, he hasn’t used airplanes on the protesters – yet.
~McQ
Japan’s nuclear plant problems and what they mean – a little context
Right now we’re seeing all sorts of reports come out of Japan as to what is happening at the Fukushima nuclear plants. All of them are tinged with sensationalism, and many of them contain no context to enable the reader to understand what is being reported in terms of the severity of the problem. For instance:
Readings reported on Tuesday showed a spike of radioactivity around the plant that made the leakage categorically worse than in had been, with radiation levels measured at one point as high as 400 millisieverts an hour. Even 7 minutes of exposure at that level will reach the maximum annual dose that a worker at an American nuclear plant is allowed. And exposure for 75 minutes would likely lead to acute radiation sickness.
Yes, but what does that mean outside the plant? And, how many millisieverts an hour do we naturally absorb just going about our daily lives. Both of those answers would help the reader assess the real danger of such radiation levels.
What you’ll find is that if you take an airplane and fly from say Atlanta to Chicago at 39,000 feet, you can expect to absorb 2 millirems of radiation.
So how does that convert to millisieverts? You math whiz types can figure it out here with these conversion factors:
- 1 rem = 10-2 sievert (Sv)
- 1 millirem (mrem) = 10-5 sievert (Sv)
- 1 millisievert (mSv) = 10-3 sievert (Sv)
- 1 millisievert (mSv) = 0.1 rem
To help others, 1 millisieverts equals 100 millirems. And 1 Sievert equals 1000 millisieverts. To give you an idea of what the number above means in millisieverts (mSv), we typically absorb 6.2 mSv per year in the US.
Now that number has some context and you can relate it to the danger outlined above.
As to the effect. Here’s a good table outlining the effects of different levels of absorption:
- 0–0.25 Sv: None
- 0.25–1 Sv: Some people feel nausea and loss of appetite; bone marrow, lymph nodes, spleen damaged.
- 1–3 Sv: Mild to severe nausea, loss of appetite, infection; more severe bone marrow, lymph node, spleen damage; recovery probable, not assured.
- 3–6 Sv: Severe nausea, loss of appetite; hemorrhaging, infection, diarrhea, skin peels, sterility; death if untreated.
- 6–10 Sv: Above symptoms plus central nervous system impairment; death expected.
- Above 10 Sv: Incapacitation and death.
So given the information above, 3 hours at 400 mSv is equivalent to 1.2 Sv. It’s recoverable but with damage.
As for exposure outside the plant – the levels of radiation drop sharply away from the plant. So those in the most danger, obviously, are those within the plant trying to contain the problem. Reports say that most of the plant workers have been evacuated and about 50 continue to battle the problems in the reactors. Where the problem for the public may occur is if there is a release of radioactive clouds of steam, or through explosions that eject material (think dirty bomb). And naturally much of the impact would be determined by wind direction. If it is blowing directly east over the ocean, the cloud would do much less harm than if it blew west over populated areas of Japan. Additionally, the materials effect would dissipate as the cloud expanded and traveled. The possibility of any significant amount of radiation reaching the US, for instance, is not particularly high.
Finally, this article by the NYT is actually a good one for background about the problems the Japanese face and the possible outcomes. For once, they attempt to keep the reporting less sensational and more focused on relating facts.
~McQ
Libya: ruthlessness winning while the world dithers and religion takes over the opposition
A week or so ago I wrote a post about ruthlessness and how that usually wins in contests like we see in Libya. Of course, the fact that the opposition is amateurish in the field and remains unorganized hasn’t exactly helped their situation. But Gadhafi has been and continues to be ruthless in his pursuit of maintaining his power.
Meanwhile, given the deteriorating situation for the opposition, the time for a “no-fly zone” appears to have passed. When it might have had some effect was early on in this battle. As the battle has matured, the advantage seems to be going to the Gadhafi forces. Not only are they more brutal, they’re better organized (relatively speaking) and performing better in the fight (again, relatively speaking). At some point, one has to expect Gadhafi’s forces to take control of key areas that will signal, for all intents and purposes, that the revolution has pretty much failed (that’s not to say the civil war won’t go on for some time, but at a much lower key than now).
But back to the opposition and an article in the NYT today. It’s interesting for a number of reasons, not the least of which is a discussion of why the opposition formed and what is happening to it according to the NYT.
Nearly 70 percent of Libya’s population is under the age of 34, virtually identical to Egypt’s, and a refrain at the front or faraway in the mountain town of Bayda is that a country blessed with the largest oil reserves in Africa should have better schools, hospitals, roads and housing across a land dominated by Soviet-era monotony.
“People here didn’t revolt because they were hungry, because they wanted power or for religious reasons or something,” said Abdel-Rahman al-Dihami, a young man from Benghazi who had spent days at the front. “They revolted because they deserve better.”
So the argument can be made it was started by the youth and the aim is secular – they have the luxury of oil but they’ve not enjoyed the benefits of that vital commodity within their country as they think they should. Got it.
But, do you remember this quote from the older post? It’s a quote from David Warren:
As we should surely have observed by now, whether or not the Islamists command Arab "hearts and minds," they are not only the best organized force, but the most ruthless. They are also in possession of the simplest, most plausible, most easily communicated "vision."
Religion, speaking here of Islam, is ubiquitous in the Middle East. It just is. And those who live there, whatever their other desires, sift everything almost unconsciously through the filter of Islam. That’s why it isn’t difficult for religious leaders or radical religious leaders to quickly gain a foothold they ruthlessly expand in any situation like this. And that’s precisely what the NYT discovers:
The revolt remains amorphous, but already, religion has emerged as an axis around which to focus opposition to Colonel Qaddafi’s government, especially across a terrain where little unites it otherwise. The sermon at the front on Friday framed the revolt as a crusade against an infidel leader. “This guy is not a Muslim,” said Jawdeh al-Fakri, the prayer leader. “He has no faith.” [emphasis mine]
Other’s continue to fight against that trying to keep it (or change it into) a secular fight:
Dr. Langhi, the surgeon, said he scolded rebels who called themselves mujahedeen — a religious term for pious fighters. “This isn’t our situation,” he pleaded. “This is a revolution.”
But, it seems it is turning into their situation. Again back to the Warren quote – what is ingrained in the opposition fighters no matter what their ostensible reason for fighting may be? Their religion. And what has the “simplest, most plausible, most easily communicated “vision.”?” Their religion. When viewed against the complicated process of democratic governance, religion as a one stop shop for both their spiritual needs and their political needs makes the former much more difficult to sell than the latter. Religion, whether it is a fundamentalist brand, or a more moderate strain, is going to emerge as a huge force in all of the struggles in that part of the world.
Something else to note from the NYT article that is interesting:
Sitting on ammunition boxes, four young men from Benghazi debated the war, as they watched occasional volleys of antiaircraft guns fired at nothing. They promised victory but echoed the anger heard often these days at the United States and the West for failing to impose a no-flight zone, swelling a sense of abandonment.
Obviously their feelings for the US and the West aren’t particularly good these days. One has to wonder if they ever were, but clearly, now that they’re starting to get rolled back they are complaining about the West’s dithering and lack of response.
I’ve said it before, I don’t support the US imposing a no-fly zone. That’s not to say I’m necessarily averse to a NFZ if Europe wants to take that bull by the horns. But I see this as Europe’s fight, not ours.
That said, any good will we in the West had prior to today with the Libyan rebels seems to have dissipated and may, in fact, be in the negative column now. The outcome could be the beginning of an even bigger problem for the West:
None of the four men here wanted to stay in Libya. Mr. Mughrabi and a friend planned to go to America, another to Italy. The last said Afghanistan. Each described the litany of woes of their parents — 40 years of work and they were consigned to hovels.
Why Afghanistan? Well not to fight on the side of the US, you can be sure. As for the other two, disaffected and disenchanted immigrants provide a fertile hunting ground for Islamists. Should the two get to where they want to go is there a possibility that they, at some future date, become radicalized? Of course there is.
Again, who has the “simplest, most plausible and easily communicated “vision”?”
~McQ
Have you spotted the evolving narrative yet?
Today at his press conference, President Obama claimed that people may have been confused by what he did early on with the massive spending because it was an “emergency” and he had to do something quickly. Or said another way, he rushed everything through as quickly as he could – despite his promises – because the situation demanded it. It wasn’t because he wanted too – it was because he had too.
You know, like the pure pork stimulus bill, most of which was scheduled to be spent in later years. And, of course, although many would like to lay TARP completely at Bush’s feet it should be remembered it was a Democratic Congress that passed that and Obama voted yes.
The point this new meme, of course is to cast himself as much more of a deficit hawk who was put in the position of saving the world (and his reaction argues against any claim of being a deficit hawk, by the way) – the emergency he continued to talk about today.
Timothy Egan at the NYT employs a variation on the theme in an article hilariously entitled, “How Obama saved Capitalism and lost the midterms”. No. Really – that’s his claim. Obama saved Capitalism. Because intruding on the natural processes of capitalism and not allowing them to take their natural course actually saves capitalism from, well, I suppose capitalism.
Yeah, it’s a pretty funny in a weird sort of NYT kind of way.
Most, except perhaps Egan, understand that capitalism isn’t something that “fails”. It is as much a process as anything and it is built upon the trillions of private individual interactions that voluntarily happen daily. What Egan claims Obama did isn’t at all true. What Obama did was prop up crony capitalism by bailing out institutions that had been incentivized by government to behave badly. End of story. And then he went on to prop up manufacturers (car companies) that had been managed badly and were failing all on their own. Neither action has a thing to do with capitalism per se. Markets reward success and are brutal to failure. Propping up failure has nothing to do with markets and thus nothing to do with market capitalism. Had both GM and Chrysler gone under, the best parts would have emerged under some other car company. The fact is we’d still be going cars today had they gone under, just not those cars.
Obama may not have been among those who created the incentives that created the financial problems – although it was rather disappointing to see one of them win reelection in MA – but the fact remains that at base, Obama was using borrowed money to keep the government/private bank scam it precipitated from collapsing the whole economy as the bubble they’d created burst. Again, that’s not a problem of capitalism.
So Egan’s premise? Well, it’s simply nonsense.
On the eve of the day after a “shellacking” as Obama called it during the presser, I suppose the left is looking for any silver lining it can find. Even if it is to be found in that for which they claim the president supposedly didn’t get proper credit. Egan might have had a slight chance at credibility if he’d claimed that the “emergency” actions of the Obama administration had kept the recession from being deeper – that’s at least debatable.
But saving Capitalism?
That’s just ignorance on a stick.
~McQ
Deficit Spending – Pimping The Great Lie
When the NY Times entitles anything, especially an editorial, starting with “The Truth About …”, you should be immediately suspicious. As Arnold Kling says, that normally means “The liberal elite narrative about …”. And it’s editorial, “The Truth About The Deficit” is no exception. The first part of the editorial is spent on a selective history lesson which makes all of our troubles, as you might imagine, something brought on by the GOP’s focus on tax cuts for the wealthy. Nevermind that they were across the board marginal cuts – this narrative won’t die.
The entire bit of revisionist history (with the normal “blame Bush” tautology) is aimed at justifying this paragraph:
Americans should be anxious, for reasons including the huge deficit. But the cold economic truth is this: At a time of high unemployment and fragile growth, the last thing the government should do is to slash spending. That will only drive the economy into deeper trouble.
What the NYT and the Krugman’s of the world believe is government spending can be substituted for private spending and have the same result – economic growth. And that economic growth, spurred by this spending, will create jobs. But if you think about it, unless the government is buying goods and services produced by the private sector, that’s most likely not going to happen, is it? Temporary jobs located in “infrastructure improvement,” unemployment benefit extensions and jobs “programs” don’t create jobs. Private sector growth does. And when government is borrowing .40 cents for every dollar it spends, it starts to dry up the private credit market. That means if there is a desire to expand, the credit isn’t as readily available as it would be if the 800 pound credit hog weren’t in the market.
Then there’s this:
To truly tame deficits will require serious health care reform …
To which Kling replies:
In Washington, serious health care reform means “fixing” private health insurance. But our deficits are caused not by problems in private health insurance. They are caused by the structure of Medicare and Medicaid. That is where we need reform. But the Times and other liberal mouthpieces need to create a narrative that makes it sound as though unsound government programs are the fault of the private sector.
Spot on. This has been the most irritating part of the “health care reform” issue. It is the public programs – which neither party will touch – that are breaking the bank, yet we continually hear politicians on the left talk about “greedy [private] insurance companies” as the sole reason health care costs or so high. In fact, without private health care insurance to pay the difference, Medicare and Medicaid would have foundered long ago. But the point is the deficit problem is not one caused by private insurance. It has no effect on public debt. That is caused by the mismanagement of the government programs. And other than a passing wave at “stopping waste, fraud and abuse” – the promise of every politician since the inception of those programs, and accomplished by none of them – this “reform” package ignores the real problem while attacking the private market.
But back to the primary point of the NYT’s attempt to persuade you that deficit spending – massive deficit spending – is a good thing:
Here is an unpopular but undeniable fact of life: When private sector demand is weak, the federal government must serve as the spender of last resort. Otherwise, collapsing demand sets in motion a negative, self-reinforcing spiral in which lack of demand — for goods, services and new employees — leads to ever deepening economic weakness.
And here’s the undeniable economic truth about the snake oil they’re peddling:
The narrative is that we are suffering from a shortfall in demand. The reality is that the private sector has decided that workers should be hired on the basis of profits, rather than on the basis of debt. The government may choose to make a different decision, of course, but that will not necessarily strengthen our economy.
One of the many economists not at all in agreement – despite President Obama’s claim to the contrary – with the prescription that deficit spending is not only good, but necessary. And while they can blame the situation on anyone they choose, the decisions being made to run up this massive debt based on some pretty flaky economic logic are theirs and theirs alone.
~McQ
NYT Asks: “Why Can’t Cerberus Foot the Bill?”
Welcome to the club. I’ve been asking that question for some time now. Better late than never, I suppose:
Chrysler said the only reason it was back asking for more money so soon was that the car market was worse than it had expected two months ago.
This cavalier approach to the public purse raises a very big question. If Chrysler is really on track for a turnaround and all it needs is some financing to get over a bad patch in sales and debt markets, why doesn’t Cerberus Capital Management, which owns 80 percent of the company, put up the money itself? Why should taxpayers have to take the risk? That’s what private equity funds like Cerberus are supposed to do.
Cerberus and Daimler, which retained a stake in Chrysler, have promised to convert $2 billion in loans to Chrysler into equity, which should help reduce its debt. But Cerberus said giving fresh money would violate its fiduciary duty to investors, breaking company rules limiting how much it can commit to any given investment.
We suspect these rules would be more pliant if Cerberus deemed Chrysler to be a good deal.
It seems the secretive private-equity fund is willing to gamble on Chrysler’s survival with the taxpayer’s dime, but not its own.
The real question is, if it is violative of Cerberus management’s fiduciary duty to bail out its own company, why is it fiscally responsible for the federal government to do so?
And what does it say when the leader of liberal opinion has more qualms about a bailout than the federal government? Nothing good I would think.