A former Bush administration official says the Obama administration is like "an irresponsible third-world regime, skirting the law and handing economic prizes to political cronies."
In an op-ed article published in Saturday's New York Times, former Under Secretary of State for Public Diplomacy and Public Affairs James K. Glassman wrote that credit markets have been damaged for the long term because of the "Obama administration’s attempts to reward the United Auto Workers, one of the president’s strongest supporters in the last election, while trampling decades of legal precedent regarding owners of corporate debt."
Glassman, now president of World Growth, a nonprofit economic-development group, slammed the federal government's recent negotiations with GM and Chrysler, saying "the administration’s actions in trying to force the deals may damage the credit markets for years to come. The treatment of the bondholders is a warning to investors that the federal government won’t hesitate to push them aside in a crisis."
Chrysler filed for bankruptcy protection in April, and GM is likely to do the same by Monday.
Glassman says GM bondholders would get just 10 percent of a new GM, while the auto workers’ union would get 17.5 percent of its stock.
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