Thursday, December 11, 2008
The democrats seem intent on replicating the structure of a bankruptcy proceeding for the automakers without having them go into bankruptcy. It appears the car czar (or commissar if you prefer) is nothing more than an ersatz bankruptcy judge. However, this all leads me back to my original point regarding the bailout, if what the automakers need is a massive reorginization then what they should do is go into bankruptcy. If they bankruptcy is not a tenable option because automakers cannot obtain debtor in possession financing on credit markets the government can provide the DIP financing. The only purpose this legislation seems to serve is to kick the bucket further down the road and in the mean time give democrats hope of creating a government sponsored enterprise in the form of the domestic automobile industry. This is a stupid bill. That said, I am not sure the republicans shouldn't vote for it. It could be that this bill as awful as it is, is simply the least bad option.