Nov
17
WSJ – Why Bankruptcy Is the Best Option for GM
ByMichael Levine explains in today’s WSJ why GM is better served by bankruptcy than a bailout.
Last week, Thomas L. Friedman in his New York Times column “How to Fix a Flat”, makes the case for restrictions that need to be placed on GM if a government bailout is made.
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1 Comments
November 17th, 2008 at 5:23 pm
NO MORE BAILOUTS!
Yes, I agree that chapter 11 reorganization bankruptcy is the best option for GM, and for other failing companies and industries.
In September, when the bailout was being debated, I was telling anyone who would listen that the federal government should not be purchasing troubled assets. If there had to be a bailout, then the federal goverment should be doing what Warren Buffet did with GE, purchasing preferred stock and providing liquidity, so the troubled company could fix its own troubled assets. Though I was disgusted with every Republican who voted for the bailout, especially John McCain, I was happy to see that Henry Paulson finally came to his senses, when he announced last week that the TARP program had heretofore purchased no troubled assets and likely would not puchase any trouble assets in the future, choosing instead to buy preferred stock.
While Paulson announced that, Barney Frank was convening a meeting to work on the auto industry bailout. So Barney Frank, who is as responsible as anyone for the recession, continues to destroy our economy. Of course, Barney Frank isn’t the only problem, there is plenty of blame to go around.
But let’s look to solutions, not blame. More bailouts are not the solution. Failing companies already have a mechanism for survival, and its called Chapter 11 Bankruptcy.