Wednesday, September 24, 2008

Words, Words, Words

In my last few blogs, I have been describing how we lawyers have used words to substitute for or manipulate reality, and how Judge Posner even wrote a book about it.

My last blog described how Hank Greenberg used words to draw an artificial distinction between the financial conditions of Lehman and AIG and suggesting that this excused us from re-examining the correctness of our conduct. Recently John Snow, former Treasury Secretary, and now the proud owner of Chrysler was on CNBC describing why the subsidized loans that Detroit automakers seek are not bailouts like Bear, Fannie, Freddie and AIG; he said they are “unfunded mandates”. This means he would like the same bailouts as the other entities, but he does not want shareholder value impaired or his management role terminated.

What were these mandates—Congress wanted the automakers to make fuel efficient cars. Like these automakers could happily skip along making SUV’s but for this Congressional mandate?

-Larry Salibra
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