MORE ON BANKRUPTCY AND THE DETROIT THREE:

But the other half of an argument against a bailout is that GM (or the others, but I’ll use GM to illustrate the point) presents an unusually good case for Chapter 11 reorganization. GM is, in fact, the textbook example of what Chapter 11 was invented to do. GM almost certainly will not liquidate, and if it does, then this will almost certainly be beneficial from a social perspective because it will illustrate that the resources are better deployed elsewhere in the economy.

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