Should the federal government have bailed out General Motors and Chrysler? Some might say yes, especially now that the two companies have repaid the loan portions of their federal bailout.
Last week, Chrysler paid back the money it borrowed two years ago from the United States and Canada. Or more accurately, it refinanced the loans at lower rates than the interest of up to 20% that it was paying them.
My sense is that the bailout was as much a political decision as an economic one. Unions backed President Obama during the election campaign. Michigan, Ohio, Indiana and other states with GM and Chrysler plants gave the president a lot of votes. It is industrial policy of a sort, and the full implications have yet to be truly understood.
So let me ask you: would you have bailed out the companies? Why, or why not?