We get it. GM is going bankrupt
To cut this story in the New York Times short: General Motors was told by the federal government to prepare for bankruptcy. The reason: GM is unwilling or unable (because of all the groups with specific interests upon which they are unwilling to compromise) to push through the major reforms necessary for it to survive.
I have to admit that I am somewhat surprised by Obama’s reasonably tough policy. He could have been even tougher, sure, but he could also have been much, much softer. No, he is not willing to go as far as I would like him to go – he still plans to invest heavily in the troubled company and its probably successor (labeled “New GM” by the NYT) – but he is not prepared to simply throw more billions at it, hoping it will – somehow, some way – make a difference.
Still, American taxpayers should not be too excited:
The rest of G.M. may require as much as $70 billion in government financing, and possibly more to resolve the health care obligations and the liquidation of the factories, according to legal experts and federal officials.
Prepare for the inevitable: GM will go bankrupt (if not this year, then shortly after).
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