Rules? Who Needs Rules? Part II

Unintended consequences. From Megan McArdle (via Instapundit):

When did it become the government’s job to intervene in the bankruptcy process to move junior creditors who belong to favored political constituencies to the front of the line? Leave aside the moral point that these people lent money under a given set of rules, and now the government wants to intervene in our extremely well-functioning (and generous) bankruptcy regime solely in order to save a favored Democratic interest group. No, leave that aside for the nonce, and let’s pretend that the most important thing in the world, far more interesting than stupid concepts like the rule of law, is saving unions. What do you think this is going to do to the supply of credit for industries with powerful unions?

It's a somewhat alarming modus operandi. The Obama Administration seems to have an affinity for heavy handed tactics to get its way (Jake Tapper @ABC via Instapundit):

A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration’s Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration’s Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation.

The White House said the story was false.

As Glenn Reynolds notes: "read the whole thing, and decide who you believe for yourself." Meanwhile, most of legacy media has been complicit (theAtlantic).