Capitalism Gets a Stay of Execution

U.S. Supreme Court justice Ruth Bader Ginsburg has put a halt to the Chrysler merger -- for the moment.

The Supreme Court on Monday granted an emergency appeal asking it to halt the impending government-backed sale of Chrysler to Italian automaker Fiat.

The order stops for now Chrysler's sale, which the company claims could scuttle the deal.

Justice Ruth Bader Ginsburg signed the order, but it may be only temporary.

A federal appeals court in New York had earlier approved the sale, but gave opponents until 4 p.m. ET Monday to try to get the Supreme Court to intervene. Ginsburg issued her order just before 4 p.m.

Let's hope that the full Court decides to hear the specifics of the merger. That might delay it indefinitely but what is at state is nothing less than the rule of law and the future of capitalism in the United States.

Indiana Treasurer Richard Mourdock said the ruling was a small victory for Indiana pensioners, who brought the request for an injunction for fear of losing their stake.

"The ... thing I hear is, 'Oh, if this doesn't happen, the sale won't take place.' Let's not forget Fiat is not paying one penny for 20 percent of this deal. If I am going to receive $400 million worth of assets on day one and I don't have to make an investment, I don't care so much if it happen Monday, Tuesday or next week, I am going to be there in the end."

The court needs more time to figure out what it wants to do. In order for the stay to have a more lasting effect, five justices need to sign on it. That has not happened, or at least not yet. The court may yet deny the emergency request or grant it and await arguments about why it should actually hear an appeal.

Supporters of the bankruptcy are angry with the Indiana pensioners for trying to protect their investments. They miss that point, and they miss the greater point that the federal government can not just change the rules of financial law to please themselves.

Mourdock said earlier today on the Glenn Beck radio show that if the high court does not uphold the law regarding corporate bonds -- they are supposed to be first in line for restitution in a bankruptcy -- the damage to the American economic system is incalculable. "I don't know who would buy a corporate bond after that," he said.

In a normal bankruptcy, union contracts would have been declared null and void, and that is why the Obama administration ran roughshod over the law. By threatening the big banks that were corrupted with TARP money, banks that held the lion's share of the Chrysler bonds, the Obama team was able to ram a plan through that basically screwed 80 percent or more of the value of the corporate bondholders, while giving a big present to the UAW and the government itself.

Pray that there are enough justices on the Supreme Court who still rely on the rule of law.