A Better Car-Bailout Plan

The Big Three would bid against one another for bailout money, and only two would get it.

By Eliot Spitzer
Posted Friday, Dec. 12, 2008, at 12:46 PM ET

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A crisis is a terrible thing to waste. This moment of decision about the auto bailout should be when we summon the courage to reject broken policies, not just to throw more capital at them; use market forces to drive restructuring, not just provide bridge loans; and put in place true market-based pressures, not a veneer of government oversight that will substitute poorly for tough decision-making.

The unfortunate reality is that we are straying further from market-driven principles and moving to an economy that relies on government as benefactor. We have nationalized the financial-services sector and are on the cusp of nationalizing the automotive sector, yet we have failed to demand anything nearly adequate in the form of genuine competition, rule changes, or transparency from the affected firms.