Would You Buy a Used Car From This Man?David Brooks on the
car-dealer in chief:
The Bush advisers decided in December that bankruptcy without preparation would be a disaster. They decided what all administrations decide — that the best time for a bankruptcy filing is a few months from now, and it always will be. In the meantime, restructuring would continue, federally subsidized.
Today, G.M. and Chrysler have once again come up with restructuring plans. By an amazing coincidence, the plans are again insufficient. In an extremely precedented move, the Obama administration has decided that the best time for possible bankruptcy is — a few months from now. The restructuring will continue.
But, no surprise either, Brooks' take on the matter is incomplete. Read Tom Maguire to find out why GM has been
so busy restructuring; Brooks completely whiffs on that part.
And the point? Obama is trying to extract concessions from General Motors bondholders, all of whom know that the free riders will pick up a windfall after Obama shocks everyone by deciding not to take GM into bankruptcy. The free riders could be controlled in bankruptcy, of course, but that won't be happening. However, a lot of huffing and puffing has to take place over the next few months to scare some bond holders into submission somehow. Clearly, the ordinary Washington Kabuki won't be enough - look for Super Kabuki!
Let me say here too that I have been sorely tested by Brooks this year. I know most of my readers probably consider me a squishy moderate, but compared to David I'm the Rock of Gibraltar.
Labels: David Brooks, GM, Tom Maguire
