I don't know why I still expect anybody in the national media to do their jobs. Maybe I had just decided that "politics" was different. That I shouldn't expect fair or responsible coverage. But they could still deal with facts in other cases.
Not so. The Detroit 3 are asking for money. The response from the media, and from much of the Congress, is that they should just file for bankruptcy. "Chapter 11 is the solution".
Now, I am not a bankruptcy expert, or even a semi-expert. Hell, I'm an aboslute novice. But there appears to be a major difference between Chapter 11 (reorganization) and Chapter 7 (liquidation)and it is not at all clear that GM could reorganize under Chapter 11. Some people have mentioned a "pre-packaged" Chapter 11 or the Government (!) ensuring warranties, but as far as I can tell none of the talking heads who throw "Chapter 11" around know any more about bankruptcy law than I do.
It seems to me that the consequences of liquidation vs. reorganization are significant, not only for the companies but for the country. Millions could lose their jobs, their health care and, quite possibly, their homes.
I will admit that the executives of the Detroit 3 didn't do their cases any good by their inability to answer simply some basic questions (like how much cash they needed each month) or to explain to the committee members who advocated Chapter 11 the difference between the two types of bankruptcies. But isn't there a business reporter somewhere in the media (print, internet or TV) who could spend a little time researching the issue?
Personally, I'd rather waste 29 million trying to keep those 3 million jobs than just throw the dice and assume that everything will work out. (A couple of CNBC's guest stars on The Big Deal really threw me with their cool assessment that the 3 million would get unemployment benefits!)
A lot of this talk about "let them fail", "let the market clear out all the riff-raff" isn't new. It was last heard en masse in 1929. I'd like to think we learned something, but it appears that Conservative Economists are convinced that the Government caused the Great Depression and want to do it "their" way this time. Oddly enough, only CNBC's Jim Cramer seems to understand that in the current economic situation, ideology is not a good counselor. As he points out: we can punish all these corporate idiots later. It's more than a bit masochistic to send the world into a Depression just to prove that capitalism penalizes failures.