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But that's Keynesian philosophy right there! In essence, you're shutting down an inefficient part of your economy, razing it to the ground (in an economic sense) and rebuilding it leaner. If you don't agree with demolishing factories to build them up again (better, stronger, faster) then you have to be 110% against Obama's policies which are, basically, rebuilding bridges or schools or whatever it is like a true Keynesian. Remember the old metaphor to explain it? Keynesian policy is a storm that destroys a window, and the economic stimulus is the owner buying a new one? That's all throwing GM and Chrysler would have been. Throwing their, old, broken windows to the floor and having new, fresh and optimistic companies replace them.
Not that I disagree with you from an economic stance in efficiency, but I'm focusing more on the cost and effects from the reduction in employment. In an ideal world, that's how we'd do it, but in our world having millions more unemployed is hard to stomach. Furthermore, the impact on unrelated industries from having such a spike in unemployment would in a sense, erase such efficiency gains. As you later point out the financial sector is a good example for both of us. Letting it fall and rebuild would put us on better footing for the future, but it would have taken down many industries and businesses all of which were unrelated aside from financing. In a sense we'd be sacrificing efficient companies to rebuild an inefficiency sector. Are we really any better off?
The longer we draw out inefficiencies in the market, the worse they'll hurt when it finally falls to pieces. For a reference, I point you to the recent financial crisis. You fix things before they get totally destroyed.
But what if in the process of fixing you get destroyed? The financial crisis is a no-win game. No modern economy can function without a banking financial sector. But at the same time not fixing the problems has produced a ticking time bomb. We are now more consolidated then before. IMO, the next financial crisis will be worse for that reason. We may have avoided total collapse now, but we've setup the next one.
I think everyone would get a piece. It doesn't really matter.
What makes you think they'd want a part of GM or Chrysler?