(And I don’t mean Timmy the Treasury Secretary)
Obama Team Said to Explore “Prepack” Auto Bankruptcy
President-Elect Barack Obama’s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.
More than most Presidents, I think it is important to judge Obama by what he does, not by what he says. And so we have to wait before grading him on this one.
Do not get me wrong; I have no desire to see hundreds of thousands of people lose their jobs. And I do not want to see what is left of American manufacturing totally liquidated. But these entities are simply not viable in their present form, so sacrifices will have to be made by management, shareholders, employees, and bondholders (let PIMCO scream). Thus Chapter 11 makes sense.
In the current environment, Chapter 11 could become Chapter 7 very quickly, and even I would not object to seeing some taxpayer money used to forestall that outcome. Just stop bailing out the creditors, dammit.
In any event, spending 1/10 the money on Detroit that was spent on Wall Street justfies at most 1/10 the outrage, right?