Everybody's mad at the financial institutions for spending their bailout money on bonuses and other seemingly irresponsible things. Because these companies are not bankrupt, they're not able, as far as I know, to renegotiate much of anything they've committed themselves to contractually.

From inane Union concessions (job bank) to executive compensation and stupid parts contracts, the domestics are shackled with the cumulative damage from decades of mismanagement. Bankruptcy is the tool they need in order to actually recover from the mistakes they made.

When you start talking about dissolving large scale manufacturing enterprises, however, there are people that start asking who will build the tanks in the next large war. I don't understand the military aspect of that but I suspect if all of the plants go foreign owned they'd just be nationalized in the event of a crisis. Maybe the bailout is the nationalization and they're just thinking ahead -- I don't know.

Fortunately, GM doesn't build our tanks.

Also, when people argue about how if GM fails then all these jobs will be lost--remember this: Detroit still has leftover production infrastructure for light rail. Not a whole lot of retraining necessary, and it would work with the inevitable Keynesian domestic spending we'll have.

I hear ya. Let them go bankrupt. I believe that there is no reason why we should be saving them because of their inability and refusal to adapt and change.

The fact that these US automakers have blocked legislation to make cars more fuel efficient because the profit margins are gigantic is ridiculous. They are wholly responsible for their failure while other car makers around the world are creating better cars and not, you know, going bankrupt.

Isn't Chapter 11 bankruptcy made exactly for this?

The trouble now is the loss of jobs and the effect it will have on our economy. I have some trouble with this, but I also feel like these people could be better used creating and working at companies that progress their products, and not produce the same SUV across all of their lackluster brands.

In theory I'd say die die and die some more. I'd like to think that if we let GM just die then out of work car people will move on to creating the cars we actually want/need. Rather than arguing with unions over health care and labor standards, and begging for hand outs.

If they just died we could move onto the next stage of creative destruction, and those car people would build cars using alternative fuels, electric cars, fuel effecient, cool looking cars (not buicks, SUVs, and La Sabres).

However, I think we have to consider that if America stopped making cars then we'd just be sitting ducks for all the other manufacturers out there that are doing fine. Toyota, Germany, the Chinese, and Koreans. I think they'd just dump cheap imports on us, and we wouldn't get an environment where entrepreneurs could innovate new products without competition from larger manufacturers.

So I think the die argument, even without considering the pain of job loss, is naive to think we'd get better products made by American companies. I'm not convinced we would be better off letting them die.

This is slightly missing the point - if GM goes through a Chapter 11 bankruptcy they will not "stop making cars". Their stock will go to zero, they will default on most of their borrowed money, they will probably have to fire a lot of people, simplify their product line, and sell off some brands to other groups. But they will keep operating as a company.