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"How is the government going to 'get its money back' if the [auto bailout] money has been spent and the firms are bankrupt?"

Mickey Kaus asks.

1) How is the government going to "get its money back" if the money has been spent and the firms are bankrupt? Only by liquidation, it would seem. So does the bailout deal eliminate the option of restructuring (as an ongoing enterprise) under the aegis of the bankruptcy court? Either the firms are saved under the "czar," or they are liquidated, apparently. 2) The big "stick" is to kill the firms, then. Isn't that too big a stick? Like a nuclear weapon is too big a stick? Come April 29th, if the choice is to approve a half-assed "restructuring" plan that has maybe a 35% chance of succeeding, or to kill General Motors, there's going to be an awful lot of pressure not to kill General Motors, no? The threat is so big it pressures the auto czar, not the executives, investors and union members. What's needed is an intermediate threat that's more credible. How about empowering the auto czar to declare the companies' labor contracts null and void? And to indefinitely delay payment of all executive salaries and bonuses? That would get the "stakeholders" attention, maybe. 3) Shouldn't there be a different "czar" for each firm? Having a single czar for the whole industry muffles what might be salutary competitive pressures. Maybe Chrysler's workers are so desperate they'll give up more in terms of pay and work rules than Ford's workers. Shouldn't that sort of choice be encouraged? Dueling "czars" would encourage this viability-enhancing reverse solidarity. ...

Good questions! As to #3, can someone explain why 3 car companies with 1 head isn't an antitrust problem?

Also, Mickey, don't say "auto czar." It's either car czar or auto autocrat. Poetry's important when everything is going to hell.

IN THE COMMENTS: AJ Lynch offers: Motor City Mogul. Campy says: Detroit Despot.

Full post as published by Althouse on December 11, 2008 (boomark / email).