Professor Bainbridge makes the case that the best help one could give to GM is to allow it to file for bankruptcy:
Many analysts argue that GM’s structural problems won’t be solved by throwing money at the company. That move will only delay the necessary reckoning. In this view, it doesn’t matter whether the Big 3 are ‘an essential part of our industrial base,’ as Rahm Emanuel asserts. Throwing taxpayer money at the problem only delays the day when America’s car manufacturers can be competitive again — when the automakers can truly serve as the backbone of America’s manufacturing base. Until that shakeout comes, GM seems likely to do no better than ward of the state. So why do it? Perhaps Barack Obama’s early priorities should give us a clue. While Rahm Emanuel has spoken of children’s health and stem cell research as the first initiatives out of the box, it’s clear that card check and the auto bailout are also on the fast track. Those are the top priorities of Big Labor — which spent $450 million to put Barack Obama in the White House, and desperately needs government help to remain viable.
