Political Quotes

“James Surowiecki outdid himself in the current issue of The New Yorker's financial page as he contrasted the decision of American Airlines to take bankruptcy versus the expectation of American business for how homeowners should behave. It wasn't that American Airlines couldn't pay its bills with its $4 billion in cash. It's just that it would be in a stronger position if it took advantage of the bankruptcy laws, where working with a bankruptcy judge, it could restructure union contracts, pension plans, and bank loans to its advantage. For example, it's perfectly acceptable and legal for a judge to reset the current value of an asset and to permit loans with higher interest rates to be set at lower current market rate. Unfair as it may seem to people who made the loans, it was part of the principle of bankruptcy, to allow people to not be mired hopelessly in debt but to start again under existing market conditions. It's part of what keeps our economy vital, keeping people not tethered to mistakes of the past or bad luck, even if those mistakes were self-inflicted. Contrast this with what business expects from the 25 percent of homeowners whose mortgages are underwater, where the financial institutions have argued about the responsibility of homeowners to avoid the stigma of defaulting, that it was their duty and obligation to pay, even if it was financially irrational and extraordinarily difficult.…”