News today that GM is about to be taken by its new management (the US Government) into bankruptcy. Weeks ago in this blog, I predicted that this (bankruptcy) would happen after a particularly strong speech by the President on the issue. Some thought I was being suckered (especially Goldwater's Ghost), and while it appears that I got the legal call right, I clearly blew every other part of the call. As things turn out, "structured bankruptcy" is another term for "government bailout" and the senior debt-holders are going to get screwed in favor of the unions.
This bankruptcy is not what I envisioned. The heavy hand of the government in this issue brings into question the validity of the entire bankruptcy process. This was not "creative destruction". This is taxpayer-funded redistribution of wealth.