In an editorial on Chrysler’s tussle with the Obama administration over the carmaker’s Chapter 11 filing, National Review brings up the travails of a local banker: BofA’s Ken Lewis.
Liberals took their cue from the president and immediately denounced the holdouts [Chrysler creditors that didn’t take TARP money and wanted Chrysler to enter Chapter 11] as ?vultures,? too consumed with greed to think of the national interest. But the law compels these firms to act in their shareholders? interest. Bank of America?s Ken Lewis ignored this responsibility and paid the price. Henry Paulson and Ben Bernanke all but forced Lewis to go ahead with the acquisition of Merrill Lynch even after he learned that the firm was in deep trouble. Lewis finally broke his silence this month, and Bank of America?s shareholders promptly stripped him of his chairmanship.
(Jeff Taylor weighed in Lewis’ troubled end a week ago here.)
An editorial I wrote in November for the Rocky Mountain News suggested bankruptcy was the best of a series of bad options for Detroit — certainly preferable to making another major American industry a ward of the federal government.
Tim Jackson, head of the Colorado Automobile Dealers Association, took issue with that, saying “Continued federal support for the U.S. automakers would not be ‘corporate charity,’ as the Rocky editorialized.”
Jackson was right, to a point. It’s not charity when your patron becomes a business partner. Auto dealers selling domestic cars also face the prospect of having another party besides Uncle Sam in the boardroom: the UAW. Some bargain.
