Should We Bailout the Automakers?

Do I have a deal for you! Suppose I fly you to Las Vegas in a Gulfstream 650 with all the comforts of home. You gamble for a week. Anything you win you get to keep and I will make up of losses. Do you think these terms are going to affect your behavior? I wonder... Government bailouts alter the incentives to take risk in the same way. When firms take risks and perform poorly, they should fail and be forced into bankruptcy. Bankruptcy is not tantamount to death. Think of bankruptcy as change. The assets are still there. The employees are still there. Bankruptcy is a vehicle to transform corporations from one form into another. Bailouts will only delay the change that will happen eventually any way and it will cost the taxpayers a bundle in the process. The Greek philosopher Hermicles said "Through change one finds purpose." Now is the time for the US automakers to find their purpose.