This article in the New Republic look at least initially to be convincing (it has managed to quiet MY "burn baby burn" tendencies at least). Of course, I don't really know much of anything about the subject, like what exactly is being proposed to do to help which companies, how much it would cost if just one of them failed, how they could significantly downsize, what it would cost to cover unemployed workers, etc. Basically, there's no reason anyone should take my opinion seriously. Anyway, here's the link.
Hat Tip: Paul Krugman
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4 months ago
2 comments:
i don't have time to read the linked article, but what's wrong with letting gm to file for bankruptcy instead of bailing them out? they'll have protection and wouldn't fold, and it would give them time to cut back and make the necessary changes to stay afloat
Because as I understand it chapter 11 bankruptcy would allow them to reorganize and refinance their debt, but because of the credit crisis there is no money to be loaned for such a refinancing/reorganization. Right now I think that if the government bails them out they should let them do chapter 11 bankruptcy and then loan them the money necessary for a smooth bankruptcy. If they can't do a chapter 11, the only option is to liquidate everything, which while not necessarily bad, it would add a lot more uncertainty and instability to the already scary economic crisis.
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