Washington Post article on the hedge fund holdouts who forced Chrysler into bankruptcy is headlined: “In Chrysler Saga, Hedge Funds Cast As Prime Villain: Firms Say They Were Right to Hold Out”.
I was interested to see what kind of argument the firms would be able to mount for the proposition that their actions were “right,” which I take to be a term connoting something like “ethical” or “morally justified.” It turns out, however, that they mean something rather different:
“Some of the characterizations that were used today to refer to us as speculators or to say we’re looking for a bailout is really unfair,” said one executive who spoke on condition of anonymity because of the sensitivity of the matter. “What we’re looking for is a reasonable payout on the value of the debt . . . more in line with what unions and Fiat were getting.”
George Schultze, the managing member of the hedge fund Schultze Asset Management, a Chrysler bondholder, said, “We are simply seeking to enforce our bargained-for rights under well-settled law.”
They’re not actually saying that what they did was right. Rather, they’re saying that it was selfish but also legal. Which is fair enough. People aren’t allowed to just do any old selfish and greedy thing they like. You can’t break into my house and steal my TV. But the law does afford wide latitude for the impulses of selfishness and greed. So one is within one’s rights, under certain circumstances, to insist on one’s ability to inflict suffering on vast numbers of people in order to make more money for your rich self and your rich clients. But it seems very odd to characterize it as “unfair” to be subjected to moral criticism for one’s conduct.
This, however, is one of the signal properties of our age. It’s one thing to model human activity as driven solely by the relentless pursuit of money. Such models can enlighten various situations. But it’s another thing entirely to actually recommend such a lifestyle as optimal or moral, or to make the claim that any conduct that rationally serves the goal of increased personal wealth is therefore “right” or that to criticize self-interested and socially destructive behavior is “unfair.” I think Obama is to be congratulated for his handling of the situation. He didn’t have the FBI storm in, guns blazing, and take these people’s money. He respects the law. He respects property rights. He’s going to go through the bankruptcy process. But he also didn’t respect the ethic of greed that’s come to dominate American public life. He reserved the notion that some conduct is wrong and worthy of criticism and held out the ideal that selfish people might someday be motivated not only by acquisitiveness but by some kind of shame and a desire to behave — or, at a minimum, be seen as behaving — in a public spirited manner.
Reclaiming the idea that there are ethical issues in life that don’t relate to gay marriage or abortion will be an uphill struggle, but it’s an important one.