Bankruptcy for GM?

In today's NY Times Magazine, Matt Bai has the best argument I've seen for letting GM go into bankruptcy. The heart of his argument comes in response to the shibboleth that no one would buy a car (or an extended warranty) from a company in Chapter 11:

This argument underscores the deeper problem afflicting G.M. over a period of decades now — not simply soaring labor costs or global competition but also an inability to grasp underlying changes in American culture. There probably was a time when a well-publicized bankruptcy would, in fact, have destroyed the viability of a brand. But in the 20 years since Silicon Valley start-ups began transforming the workplace, younger Americans — in other words, those who now make up the heart of the consumer market — have largely dispensed with the mythology of the infallible institution. Transparency and reinvention, rather than stability and regality, are the more valued assets in an economy where entrepreneurs expect to stumble more often than they succeed and where employees expect to have to change jobs (if not careers) multiple times.

Which led me to think about United Airlines, which went into and came out of bankruptcy intact. Indeed, almost all major US airlines (including US Airlines) have done so. Now it's true that buying an airline ticket is not like buying a car: for one thing it's cheaper, and even if you--like the lovely Diane and me--are addicted to buying well in advance to save money--that ticket is not something you expect to keep and use for years. On the other hand, airlines take you really high in the sky and transport you really fast in a extremely inhospitable atmosphere, frequently over very remote places. (If you think the United States is thickly settled, take a plane from coast to coast and gaze down at the vast expanses of the nation that seem not only to be uninhabited, but uninhabitable.)

So maybe we have matured to the point where the public would view Chapter 11 as a sign of stability, not ultimate failure. Would bankruptcy be cheaper than a government bailout? That's for better minds than mine.