Everyone says that part of the conditions of doing a bailout is going to have to be some major restructuring of this and that. But normally Chapter 11 bankruptcy is precisely the means through which such restructuring is done. If unusual circumstances mean we can’t do Chapter 11 and we need extraordinary congressional intervention, then it seems to me that the extraordinary intervention should be aimed at making Chapter 11 possible. Of course key GM stakeholders on both the management and the union side would prefer to avoid that scenario. But the reason they’d prefer to avoid it is precisely that they’d prefer to avoid major restructuring.
Monday, November 17, 2008
Yglesias on the bailout: