We wondered whether President Obama was play-acting when he announced the Chrysler Chapter 11. He sure sounded peeved (video) when he said about TCW, Oaktree and the other secured debt holders of Chrysler, “While many stakeholders made sacrifices, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout…I do not stand with them.”

Was this just a bit of political theater? Before deciding, let’s review some history. The NYT has some background:

As with so many issues in his action-packed 100 days in office, Mr. Obama confronted choices few of his predecessors encountered. His ongoing intervention in an iconic sector of the economy offers a case study in the education, management and decision-making of a fledgling president…

Mr. Obama, often after dinner with his wife and daughters, devoured briefing papers until midnight to master the intricacies of the auto industry. But he had advisers deal directly with the car companies and never spoke with the G.M. chief executive he effectively fired…

the discussions began with a heady optimism that the crisis could provide an opportunity to push the industry to produce cleaner “cars of the future,” an idea Mr. Obama had often invoked…

A former community organizer with little business experience, Mr. Obama had developed a basic knowledge of the auto industry during the campaign, touring factories, stumping with Ron Gettelfinger, a powerful ally as president of the United Auto Workers, and meeting with William Clay Ford Jr., the executive chairman of Ford who later recalled discussing “the electrification of our industry.”

The WaPo added another comment by Obama: “I know that, if the Japanese can design an affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same…So my job is to ask the auto industry: Why is it you guys can’t do this?”

Our observations: (a) Obama wasn’t acting, he was really mad at the funds because they insisted on their legal rights as secured creditors and thought they could get better than Obama offered through a court process; (b) Obama has chosen to get deeply involved in the details of dealmaking with two car companies, a strange choice of Presidential priorities; and (c) Obama thinks that it’s his “job” to get American car companies to produce Japanese hybrids — even though hybrids are less than 3% of the auto market.

Hmmm. Poor and idiosyncratic business judgment, a personal arrogation of power in areas foreign to most Presidents, and pique at the insistence of others on their legal rights — this can’t end well, can it? If this President decides he is interested in an issue, watch out. If he approves your undertakings, all well and good. But if you are found wanting, perhaps by insisting on the rule of law, beware. The Eye of the One will be upon you.

This entry was posted on Saturday, May 2nd, 2009 at 4:25 pm and is filed under business, Democrats, General, Law, Left of Left. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.