In a perfect world I agree, but we live in a complicated world. While I don’t agree with the Bail out of GM & Chrysler, imagine the economic destruction if they went bankrupt.
No, the destruction if they had gone bankrupt would not have been great. Their assets and production would have been picked up by other, likely more efficient, companies who would have hired pretty much the same workers.
Sorry, while I agree with you about Carrier, GM & Chrysler are bad examples.
If they had gone through a normal Chapter 11 bankruptcy, they would have been able to renegotiate one of their biggest costs: labor. Instead, secured bondholders (who legally had first claim on any assets) were screwed, so that Obama could give stock to the UAW.
GM and Chrysler just kicked the can down the road again, and you can expect to see GM in trouble again. Chrysler is now owned by Fiat, so perhaps they will avoid a repeat.
Yes, an orderly bankruptcy would have affected more employees. But, avoiding it was at the expense of pension funds and IRAs that held what were thought to be investment-grade bonds.