The Big Three are a disgrace, but they still need our help.


Why not just let General Motors, and perhaps Ford and Chrysler, just go bankrupt? Even as auto industry executives and their political allies clamor for a bailout, the anti-bailout chorus is growing louder. The shrewd John Gapper makes the case in his Financial Times column, and hedge fund sharpie Bill Ackman seconds the motion. In the National Review, Jim Manzi makes the ideological case.

Of course they're all correct. Allowing the listing Big Three to keel over would be a triumph of free markets. It would punish failure and invite new managers and investors to enter the field. I'm a big fan of creative destruction and its wondrous benefits (I wrote a book about it). But I also think the no-bailout folks are being too cavalier.

Yes, GM's management has been dreadful. As the Israeli diplomat Abba Eban said about the Arabs, they never missed an opportunity to miss an opportunity. And it's difficult to make a case that Cerberus, the private equity firm that thought it was getting a steal when it bought Chrysler, should get any taxpayer assistance. But I'm having a difficult time jumping on the anti-bailout bandwagon. Perhaps it's because I grew up in mid-Michigan, and played little league baseball in the shadow of the Fisher Body plant. Or perhaps because, for a brief period long ago, I covered bankruptcy courts. In any case, what follows is less an argument for a bailout as it is an argument against those agitating for a rapid Chapter 11 filing.

If the Big Three don't get government checks, it's very likely that...

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Date published: Nov 13, 2008


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