Follow BeltwayBlips on Twitter
Bailing Out in the Real World
Matthew Yglesias —
... like this and like that and like this then it’ll all be okay, therefore we should do it.” Which is fine. But we also need to ask ourselves, if we accept the proposition of Detroit’s management, the UAW, and Michigan politicians that what’s good for General Motors is good for America, how likely is any of this stuff to happen.
TNR’s Jonathan Cohn, for example, makes the most persuasive case for a Detroit bailout. Per Krugman’s summary:
If the economy as a whole were in reasonably good shape and the ...
Chapter Book
Matthew Yglesias —
... Incidentally, if it’s really the case, as Paul Krugman says, that “If the economy as a whole were in reasonably good shape and the credit markets were functioning, Chapter 11 would be the way to go” but trouble in the credit markets makes that impossible, I don’t understand why we can’t use federal funds to facilitate GM’s transition into Chapter 11 protection rather than a full-scale bailout designed to avoid bankruptcy. ...
More Bold
Talking Points Memo —
... Over the weekend I was discussing the question of whether or not we should be bailing out the auto industry. One issue that has come up over the weekend is that we may be wrong to assume that bankruptcy just means conventional Chapter 11 reorganization (which in the abstract at least could be a good thing) rather than liquidation. In the current economic climate and with the credit markets still out of whack, bankruptcy might actually lead directly to liquidation. That probably means at least a million jobs eliminated at in one fell swoop -- something I don't think we can ...
Today in The Nation: Why Save GM?
The Nation: Top Stories —
... of reasons -- not the least of which is I think it would be demoralizing and economically destabilizing at a difficult time. But after listening to Ron, it because clear that the most daunting task before GM is the rehabilitation of its brand. The $1000 per car legacy costs pale beside the $4000 devaluation due to lack of consumer confidence. If it's possible for GM to come back, the hope really does rest with the Volt. Its $40,000 pricetag means it's not going to be a cheap mass-market car, but much like the " ...
Can GM Survive? A Wall Street Analyst’s View
Firedoglake —
... of reasons -- not the least of which is I think it would be demoralizing and economically destabilizing at a difficult time. But after listening to Ron, it because clear that the most daunting task before GM is the rehabilitation of its brand. The $1000 per car legacy costs pale beside the $4000 devaluation due to lack of consumer confidence. ...
TNR on why we can't afford to let the auto industry fail
AMERICAblog News| A great nation deserves the truth —
It's a good analysis, arguing that it is precisely because of the economic crisis we're in that we can't let the industry fail (via Krugman): One reason for the casual support for letting GM fail is the assumption that bankruptcy would be no big deal: As USA Today editorialized recently, "Bankruptcy need not mean that the company disappears." But, while it's worked out that way for the airlines, among others, it's unlikely a GM business failure would play out in the same fashion. In order to seek so-called Chapter 11 status, a distressed company must find some ...
