TAS Trustee Asness Denies Obama the Sanction of the Victim

The Atlas Society's picture
Submitted by The Atlas Society on Tue, 2009-05-12 21:38

TAS Trustee Asness Denies Obama the Sanction of the Victim

May 11, 2009 -- Clifford Asness recently posted an open letter, “Unafraid in Greenwich,” in which he attacks the Obama Administration for smashing the basic legal rules that protect creditors and allow for orderly and just bankruptcy proceedings.

In the deals the Administration has brokered for the Chrysler bankruptcy, the creditors get short shrift so that a favorite Democratic donor group, the UAW, can seize control of the company. The deal has been made possible by bullying tactics that use the power of government coercion as the ultimate threat to bring the owners of Chrysler's debt to the table. "When hedge funds, pension funds, mutual funds, and individuals, including very sweet grandmothers, lend their money they expect to get it back.... [But] without [the bankrupcy] recovery process nobody would lend to risky borrowers. Essentially, lenders accept less than shareholders ([which] means bonds return less than stocks) in good times only because they get more than shareholders in bad times."

Asness is managing and founding partner at AQR Capital Management, a notable financial firm. He is also a Trustee of The Atlas Society.

Asness's letter was liberally quoted in the May 11, 2009 Wall Street Journal, in a piece entitled "Hedge Funds Are Piqued by White House." On the CBS News website, writer Declan McCullagh also discussed Asness’s views in his piece, “Chrysler Bankruptcy Exposes Dirty Politics.” Further, Reuters highlighted Asness in its piece, “ Hedge Fund Manager Lashes Back at Obama on Chrysler.”

It's a disgrace that most media have been unwilling to talk about how Stephen Rattner, Timothy Geithner, and President Obama are strong-arming the financial sector and riding roughshod over what little remains of property rights in America. We at TAS are proud of Asness's efforts to shed the light of truth and moral indignation on the power grab that the administration is engaged in.


( categories: )