Bankruptcy? Nope, It’s Just Another Bailout.

Andrew M. Grossman / March 31, 2009

All bankruptcies are not created equal.

For months, Heritage and other conservatives have counseled that the proper course for an ailing automaker is the same medicine as for any other sick company: the bankruptcy process. All along, industry shills and union activists have pooh-poohed that idea, claiming that bankruptcy filings would be the end of the industry—an argument that’s never made much sense.

So it was a welcome surprise to many conservatives to see President Obama, no foe of big-government bailouts, speak in favor of automotive bankruptcies yesterday. The President’s endorsement of the idea, plus government-backed warranties for new car purchasers, puts the lie to claims that the public can’t or won’t accept bankruptcy and that a bankruptcy filing would spook car buyers. Neither argument ever had much evidence behind it, and now they’ve been exposed as hollow—even GM’s leadership has come to accept the bankruptcy option. (more…)