Things to Expect When You’re Going Bankrupt

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"Things to Expect When You’re Going Bankrupt"

More trouble in Detroit:

Still, G.M. said that it “will fall significantly short” of the cash needed to run its business in the first half of 2009 unless economic conditions improve and the company gets access to financial aid from the federal government.

Describing it that way is a neat way of trying to imply that federal aid should be anticipated. But it’s not as if a company lacking the cash needed to run its business is some unprecedented occurrence. Businesses go under all the time. And the nation’s lawmakers have thoughtfully written extensive bankruptcy laws to deal with these situations. Of course, for GM or Ford or Chrysler to go under would cause a lot of hardship for a lot of people. And arguably the federal government should do something to help those people. But whatever volume of help you think would be appropriate should be targeted to people in need not handed out to firms as a favor to shareholders and managers who brought the companies to this place.

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