What's The Chrysler Bailout Really All About? Two Views

I asked Megan McArdle, and here she responds.

The administration isn't kowtowing to the unions; it's trying to prevent massive job loss.  Chrysler employs about 60,000 people.  This is a rounding error in the number of jobs that have been lost since this recession began.  

To put it another way, we could have taken the $8 billion or so we gave to Chrysler and given every one of the company's employees $133,000 to start their own War on Poverty, while still providing much of their pensions through the PBGC.  Of cours, the new Chrysler is going to cut many of those jobs, so the cost of actual jobs saved will probably top $200K per.  For as long as the company lasts.  Which most analysts do not expect to be long, given that their super secret surprise scheme for turning everything around is to have Chrysler sell retooled Fiats to a country with one-seventh the population density and almost twice the birthrate of Italy.

They're bailing out Chrysler because the company is systemically important.  Really?  When Lehman failed, huge other portions of the financial system quite unexpectedly quit working. Yet when I look out on the streets, I see no noticeable dimunition of the number of cars there.  When I turn the ignition key in my car, it still starts. 

My best sense of the administration's argument is that of a very sick patient who needs, among other things, his gall bladder removed. Better to let that patient recover before the surgery, as it's never a good thing to operate on a guy whose immune system is  challenged.  Translated: Chrysler's probably gonna fail at some point. But if it were to fail during a perfect storm of adverse economic conditions, it could take the entire economy down with it. Better to prop up the company for a few years until the economic recovers... let it fail when the economy can sustain a blow like that.

Whose argument do you believe? Megan's? Or the White House's?