Friday, November 07, 2008

Let GM go bankrupt

Today, General Motors announced a greater than expected cash burn, and their dwindling liquidity will spell disaster without a federal bailout.

The case can be made that allowing GM to file Chapter 11 bankruptcy would be an orderly dismantling of a failed business model with atronomical labor costs.  Let them go.  This is far different from having a bank go out of business with a bank run.  

Chrysler's deal in the 1970's was a mistake.


Anonymous said...

I saw this in the NYT. Apparently an auto industry bailout will be a platform (from Obama's perspective) to get into "green" auto technology. Kind of making the industry the lab, so to speak.

An interesting application of command economy notions, perhaps?

Tony said...

Raise gas and carbon taxes... you'll see green technology immediately.