Pur Autre Vie

I'm not wrong, I'm just an asshole

Friday, June 05, 2009

Don't Trust Anyone Who Doesn't Understand Section 1129

Will121 says in comments:

"Regarding the errors at the start of the piece I'll just mention that when this guy blogged about finance, I'd pointed out that he often had no clue about what he was talking about. Now that he's mentioning someone in your profession, you've come to the same realization."

Will121 is referring to my previous post, in which I pointed out that the first sentence of Brad DeLong's recent piece contains two glaring (and so far uncorrected) errors.

Fair enough. It is clear that DeLong often indulges his temptation to write about things he doesn't know anything about (ironically, a very Posnerian tendency). For instance, is he under the impression that Carbozo Cardozo was a good judge? Or is he being ironic? [Carbozo joke stolen from a law school professor]

Either way, lesson learned. Big grain of salt going forward.

And an even bigger grain of salt for Felix Salmon, who defended the GM 363 sale with this logic:

"As far as I can make out, the main legitimate complaint of the GM bondholders is that they’re getting paid out less than other unsecured creditors (specifically the UAW) with whom they’re pari passu. But I don’t think there’s a legal right anywhere for all pari passu creditors to receive exactly the same treatment. If you owe money on four different credit cards, there’s no law saying you have to pay them all the same proportion of the total amount outstanding."

Sigh. As is often the case, this is a complicated issue, and if one were inclined to be charitable, one could support a version of this argument. There are all kinds of situations in bankruptcy in which claims with identical priority are treated differently.

But this does not mean that a debtor can crudely pay some unsecured claims more than others. It's awfully hard to embrace the idea that, for instance, you could pick and choose which credit card debts you were going to pay off in bankruptcy and which you weren't. Or confirm a plan of reorganization providing for the payment in full of your trade debt but leaving a pittance for your unsecured notes. Again, there are ways of achieving these outcomes, but they involve mechanisms that serve other bankruptcy purposes. They are exceptions to the general principle of equality of recovery among claims of identical priority.

I could go on, but it's not that interesting - the point here is that once you catch someone confidently misstating the way things work, it's awfully hard to trust him again. So maybe I shouldn't really trust anyone until I have read something he wrote about bankruptcy.


Blogger Alan said...

I guess this is a feature and a bug of blogging -- it's good if a blog is quasi-real-time and not too narrowly focused, even at the expense of some precision and nuance. It's nice to read people such as Yglesias who are generally on the ball even when they stray into uncharted territory, because you can cover at a lot of ground without having to read a lot. It's a boon to those with little time and/or motivation.

That said, I agree that bloggers should write more carefully, and I think they can do so in certain ways without sacrificing much of the benefits noted above. For one, they can do a better job of linking to their sources, especially when it comes to complicated or expert analysis that they've distilled. Additionally, they can note when they're straying outside of their comfort zones, which would be especially beneficial to readers who haven't had a chance to divine the contours of such zones. Always preface what you say.

Perhaps the echo chamber effect is such a powerful countervailing force that many bloggers who are aware of these options nevertheless confidently spew their share of ideological half-truths in our to stoke and/or appease their readerships. But I think when it comes to blogs that target the intelligentsia, commenters who know what they're talking about -- and other blogs -- should be able to keep them in check. Thing is, is there enough of an incentive?

Hopefully these here kudos will at least keep you keeping them honest when it comes to matters of the Code.

2:06 PM  

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