The Economy, The Bailout, TNR and the NYT

David Brooks comes out against the Big 3 bailout. I'm torn and under-informed. On one hand Detroit deserves what it's getting, the decades of gas guzzlers and lobbying against any CAFE standard increases (not to mention seat belts, catalytic converters, etc.) shows the short-sightedness of their business plan and shouldn't be rewarded. On the other hand, are they really too big to fail? Are we sure they'll survive bankruptcy? Can't they sell off some lesser brands (Pontiac, etc.) to get them through? I guess if the airline industry can survive bankruptcy, so can Detroit. Let's use the money for something else

If ever the market has rendered a just verdict, it is the one rendered on G.M. and Chrysler. These companies are not innocent victims of this crisis. To read the expert literature on these companies is to read a long litany of miscalculation. Some experts mention the management blunders, some the union contracts and the legacy costs, some the years of poor car design and some the entrenched corporate cultures.

Paul Krugman makes the case for bold economic spending by the Obama Administration - desperate times make for desperate measures. Once we get through this we can go back to balancing the books.

UPDATE: Ok, so now I read Jonathan Cohn's TNR argument in favor of the Big 3 bailout. Essentially he claims that Detroit was already modernizing their business model and making great improvements until the economic crisis occured - therefore, Detroit's reputation is worse than they're actual operations. Furthermore, because they can't cut off creditors (who supply autoparts) they couldn't file for Chapter 11 and continue working - instead they'd end up in Chapter 7 Bankruptcy: liquidation ... causing, at worse, a 1/2 million jobs to disappear (which is the total unemployment as of today). Also, GM is pushing the Volt plug-in car ... something that Japan doesn't even offer, so we'd push that technology back even further.