Wednesday, May 06, 2009

Should I Worry About Chrysler?

Perhaps it's idealistic of me, but the American bankruptcy system actually works very, very well. I think we should be very cautious about mucking with it, particularly when there's no reason to. The administration didn't need to beat up the creditors in order to reorganize the company--or at least, they wouldn't have needed to do so, if they weren't trying to make the creditors take less than they'd get in a liquidation. Nor did it need to do so to keep the UAW at the table--unlike capital, the UAW isn't going anywhere. The administration is beating up the creditors because a) it wants to give the UAW a much better deal than they'd get in liquidation and b) they'd like someone else to pay for it.

Read the whole thing.

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