It’s amazing that we’re debating whether or not to bail out the US car companies. They’re insolvent! They’ve got to reorganize, pursuant to the bankruptcy laws. Any other approach rewards unsuccessful managers. Both the Democrats and Republicans were prepared to bail out management teams that have failed in the free market. The only difference is that the Republicans wanted the auto workers to accept a drastic cut in their standard of living as a precondition to a deal. Impoverishing workers is no way to reinvigorate a consumer-driven economy!
Meanwhile, Bloomberg reports that the Fed has issued Two Trillion Dollars of emergency loans, but the Fed won’t disclose the borrowers or the collateral. This cloak of secrecy wouldn’t be necessary if the transactions were honest.
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