I don't own a car, but lately I find myself very concerned over the fate of the American auto industry. Over the past week, I have been trying to decide which side of this debate I should support, but I still can't make up my mind. It seems that there are compelling reasons for both cases: to let the auto makers file for bankruptcy and begin their own restructuring or to shore them up temporarily with a government bailout. Obviously, people far smarter and better-informed than me have been weighing in on this discussion in recent days. In some of the national newspapers, Michael Levine and Mitt Romney have made the case to leave the market alone and let nature take its course. Meanwhile, Jeffrey Sachs and Robert Samuelson have argued for an immediate bailout tied to stringent conditions of reform for the industry.
Right now, I think I am leaning toward the latter solution. It seems better to be proactive and forego arguments of principle and ideology in a time of crises, but I can also see the potential benefits of waiting until these firms are in Chapter 11 to guarantee loans. Any thoughts?