Should Bush have Finished off the Automakers?

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.   

Presented by

Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

Google Street View, Transformed Into a Tiny Planet

A 360-degree tour of our world, made entirely from Google's panoramas

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Google Street View, Transformed Into a Tiny Planet

A 360-degree tour of our world, made entirely from Google's panoramas

Video

The 86-Year-Old Farmer Who Won't Quit

A filmmaker returns to his hometown to profile the patriarch of a family farm

Video

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

Video

The Benefits of Living Alone on a Mountain

"You really have to love solitary time by yourself."

More in Business

Just In