It was criticised by the Treasury secretary as “contrary to the principle of free enterprise”, while General Motors’ chairman called it “a basic challenge to the philosophy of America”. But Chrysler’s controversial 1979 rescue merely involved $1.5bn in loan guarantees that eventually netted the government a profit, and was for a more significant company – the nation’s 10th largest manufacturer and a key defence contractor during the cold war. Nearly 30 years later, the government’s investment is at far more risk and its interference in the private sector more troubling.

Tuesday’s “breakthrough” deal with unsecured lenders appears inequitable and heavy handed. Shareholders Cerberus and Daimler are rightly being wiped out, but the deal to pay $2bn in cash to retire $6.9bn of unsecured debt was struck with four lenders – all government supplicants, forcing others to adhere to the same deal. By contrast, a $10bn debt to the union will be paid in a 55 per cent equity stake and a $4.6bn interest-bearing debenture. Taxpayers, meanwhile, get only a 10 per cent stake for the $4bn in loans already committed and will provide $6bn more at a lower interest rate than the union is receiving. And Fiat will get 35 per cent of the company with no recourse for these debts.