I’ve gotten quite a few hits on the web version of my Examiner column Wednesday on the Chrysler deal in which I said we were seeing an episode of Gangster Government. Another thought on this has occurred to me.
Remember that bondholder lawyer Tom Lauria said that an Obama administration official threatened that the White House press corps would destroy his client’s reputation unless it agreed to the White House Chrysler deal.
The threat sounds just a tad bit bizarre: most members of the White House press corps may be pussycats for the Obama administration, but it’s not very likely they’re going to go out of their way to investigate and blacken the name of a bondholder firm. But let’s assume that the White House official in question was Steve Rattner, and keep in mind the fact that Lauria and his client are based in New York.
They might very well know that Steve Rattner is reputed to be one of the best friends of Arthur Sulzberger Jr., publisher of the New York Times. The threat starts to sound like a threat of character assassination by the NYT. Of course it may be true that it would be out of character for Rattner (who was once a very good NYT reporter himself) to suggest a story line to Sulzberger or to a Times reporter—or it may not.
Mickey Kaus makes the useful point that hedge funds are afraid of bad publicity or indeed of any publicity because they fear it will prompt their investors to redeem, i.e., take their money out of the firm. And the NYT would be one newspaper that just about every investor would see every day.