Once the government has a stake in GM, it will never be properly restructured.
Last year, after a small bailout (relative to what was coming), the government replaced the head of AIG with Edward Libby. Once they had a stake in AIG, no amount of taxpayer money was to big to keep the failed shell that is AIG going. Hundreds of billions of freshly printed dollars poured in, never to be seen again.
Any group of people spending other peopleâ€™s money will not make good decisions with it. It just canâ€™t and doesnâ€™t happen.
The right course with GM is to let them restructure. Once decades of labor and dealer sclerosis is cut away, they can be a solid business.
Government involvement ensures that political payoffs run them, not market. That means they will â€œnever failâ€ but they will never succeed again either.