Austan Goolsbee recently complained on television that they're only embroiled in the auto mess because the Bush administration "kicked the can down the road". Keith Hennessy, who was in the Bush administration, says that's not quite how it happened: the administration proposed a more definitive resolution process, but the Obama transition team, which wanted more control over the process, declined.
It seems to me that the Bush administration could hardly have resolved things any more quickly than they did; restructuring a company takes time. Nor did they have much political scope for bold action. But perhaps my old professor was voicing my secret suspicion: that the Bush administration only gave the automakers loans because they wanted to leave the incoming Democrats with an ugly, expensive, mess on their hands. If Bush had had a few more years in office, he might simply have let the automakers fail. But this way, he kept Michigan competitive, and forced the Democrats to spend huge, unpopular sums on a fairly naked bailout of a key labor constituent.
That would imply, of course, that like me, my former professor thinks GM should have been allowed to fail.