Shelter of Squalor

Oh, a storm is threatening
My very life today
If I don't get some shelter
Oh yeah, I'm gonna fade away
--Rolling Stones

General Motors (GM) seems destined for bankruptcy--perhaps with the US government buying an equity stake. Keep in mind that bankruptcy of the restructuring kind, which this would be, is not the free market at work. It is an intervention.

Restructuring bankruptcies shelter weak firms from creditors seeking to liquidate resources. In a free market, those resources, once liquidated, would then move into hands that are more capable of satisfying market needs.

Because scarce economic resources are likely to remain under the control of less competent allocators, society at large is worse off. Restructuring bankruptcies tend to hinder, not help, collective standard of living.

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