You Can't Pick and Choose with the Rule of Law and the Constitution

Todd Zwyicki has a great op-ed in today's Wall Street Journal arguing that Obama's strong-arming of the Chrysler bankruptcy violated Constitutional protections of the rule of law. An excerpt:

The close relationship between the rule of law and the enforceability of contracts, especially credit contracts, was well understood by the Framers of the U.S. Constitution. A primary reason they wanted it was the desire to escape the economic chaos spawned by debtor-friendly state laws during the period of the Articles of Confederation. Hence the Contracts Clause of Article V of the Constitution, which prohibited states from interfering with the obligation to pay debts. Hence also the Bankruptcy Clause of Article I, Section 8, which delegated to the federal government the sole authority to enact"uniform laws on the subject of bankruptcies."

The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the"absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.

The absolute priority rule is a linchpin of bankruptcy law. By preserving the substantive property and contract rights of creditors, it ensures that bankruptcy is used primarily as a procedural mechanism for the efficient resolution of financial distress. Chapter 11 promotes economic efficiency by reorganizing viable but financially distressed firms, i.e., firms that are worth more alive than dead.

Violating absolute priority undermines this commitment by introducing questions of redistribution into the process. It enables the rights of senior creditors to be plundered in order to benefit the rights of junior creditors.

My question is for those on the left who so rightly and eloquently argued against the Bush Administration's violations of the Rule of Law, and defended the Constitution in the process, with respect to the treatment of prisoners and other elements of the"war on terror":

Where are you now? The crickets are chirping once again from where I sit. If the Constitution and the Rule of Law really mean what you said they meant when Bush was president, why don't they mean the same thing now? If the imperial presidency was wrong then, why isn't it wrong now? Where are you, you passionate defenders of the Rule of Law? Has The One blinded you to your principles, or did you never really have them in the first place?