Have you driven Chrysler into the ground lately?
I was delighted to see today’s New York Times editorial opposing a bailout of Chrysler (or, at least, admonishing caution). Chrysler, let’s remember, was purchased by Cerberus Capital Management; it’s not a public company in the way Ford and GM are. Cerberus made an investment — a bad one — and, to use the Times’ deftly chosen word, has a “cavalier” expectation of the public treasury saving them. Returns are rewards for risk well-made; bankruptcy should be the result of bad investments. Because while we’re at it, what’s to stop Daimler, the previous owners, asking for a do-over?
I feel somewhat differently about GM, which is such an enormous part of our economy that it may be hard-wired into the system. GM’s collapse would take down hundreds of thousands of other jobs in related industries — insurance companies, auto parts stores, uniform makers, and countless other suppliers. For the next 10 years, the U.S. economy would look like that last scene in “Planet of the Apes,” with all of us serving as Charlton Heston down on his knees pounding sand in the wasteland. Of course, that’s not to say that the next 10 years aren’t going to look like that anyway — but let’s do our best not to ensure that future.