Bankruptcy

"Bankruptcy" is in the news a lot these days. GM and Chrysler have filed. The process allows a company or an individual to either restructure their debt or liquidate what they own and pay off as much of the debt as possible. Apparently the administration does not consider liquidation to be a viable means to resolve the car companies' problems. Perhaps they should reconsider.
The real problem is admitting mistakes and correcting them, something everyone is trying to avoid. The car companies and the government have made huge promises to the unions and they are not able to fulfill them. They pay literally millions, if not billions, to people who no longer work, no longer produce. They pay billions more to people who are working, but they cannot sell enough product to meet those obligations. Now it has become unsustainable.
The UAW will tell you, rather loudly, that they have made significant concessions and maybe they have. The problem is, unless you can find a way to sell the cars, it will not be enough.
Still, the focus seems to be on how we preserve the auto industry "as is" rather than how it should look in the future. This is the difference between government intervention to prop up a structure and allowing the market to set the direction.
Why does there have to be a "big three" automakers? Because there always has been? What happened to "change"? Maybe the market would create a "medium size six". We don't know. What we do know is that the Administration is tying itself up in knots to preserve the big three and more importantly to them, protect the U.A.W.'s perogatives.
After the bankruptcy however, we still have the problem of selling cars. Can the companies make cars people want to buy? We hear noises about fuel efficiency standards and other bells and whistles the Administration now wants to put on new cars. Some even suggest taxing certain types of "non preferred" i.e. S.U.V.s cars more, to force us to buy the more fuel efficient models. We have the makings of an unholy alliance between the auto makers and the government to force us to buy certain cars in the interest of saving the big three.
If you are a fan of centralized economic planning then this is all something to get excited about. If you believe that would should be allowed free choice in the products we buy and the cars we drive, be very nervous.
The companies may have filed for bankruptcy and may "restructure" but it is the policy of preserving the status quo at all costs that is bankrupt.