Let Detroit Go Bankrupt: Brooks, Krauthammer

Auto bailout throws good money after bad, goes against US capitalism itself
By Nick McMaster,  Newser Staff
Posted Nov 14, 2008 12:31 PM CST
Let Detroit Go Bankrupt: Brooks, Krauthammer
General Motors Chairman and CEO Rick Wagoner reveals the production version of the new extended-range electric Volt vehicle during the company's 100th Anniversary celebration at GM world headquarters September 16, 2008 in Detroit, Michigan.   (Getty Images)

American prosperity relies on creative destruction—the failure of nonviable companies and their replacement by defter rivals. The government endeavors to protect the worker in periods of transition, writes David Brooks in the New York Times, but not the firms themselves. That’s why the auto-industry bailout is a bad idea: Extending the life of the Big Three means preserving their unworkable business models.

The financial bailout ensured that the system itself continued to function, Brooks writes, but “a federal cash infusion will not infuse wisdom into management” at GM, Chrysler and Ford. Charles Krauthammer, in the Washington Post, agrees, writing that the Detroit bailout underlines philosophical differences between Republicans and Democrats: “In this crisis, we agree to suspend the invisible hand of Adam Smith— but not in order to be crushed by the heavy hand of government.” (More bailout stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.