John Gapper's blog: With regard to the proposed Detroit bail-out, I find it curious that most people have accepted that it needs to be all or nothing - that either General Motors, Ford and Chrysler should all get government money or none of them should. Since my column last week noting the reasons a Detroit bail-out would be a bad idea, the mood has become more hostile to the idea (I am not, by the way, claiming any causality: lots of other people argued against it). But the argument has generally turned into a three-way bail-out versus none at all. So I want to reiterate my suggestion that the US government should provide some finance to GM and Ford while letting Chrysler go bust.

Felix Salmon notes in Portfolio that the government could provide the necessary finance for a restructuring in bankruptcy of the industry, rather than preserving all of them as is. That sounds like a plausible way forward. Alternatively, it could simply provide debtor-in-possession financing to Chrysler, provoking a downsizing of the industry and a move from the big three to the big two. This would at least eliminate some of the overcapacity in the industry.