Why we should be glad we didn’t let Detroit go bankrupt (like Mitt Romney wanted).
Perhaps the average person thinks that declaring bankruptcy means that you go out of business. But informed people know that this is wrong. Bankruptcy can be a method by which a company sheds itself of costly liabilities in an effort to become healthy. Almost all of the airlines have gone through bankruptcy, and by any measure, they are all better for it.
When Romney (and the rest of us) were suggesting that the auto industry declare bankruptcy, we were suggesting that the automobile industry use the same renegotiation procedures utilized by countless other companies that have returned to profitability. In other words, we were suggesting that creditors (who chose to deal with the auto industry) take the hit instead of taxpayers (who did not choose to deal with the automobile industry). We were suggesting bankruptcy as a way to save the industry, not kill it.
All of those sales, jobs, etc., in the graphic above—all of them might have been had if the auto companies had gone through bankruptcy. And it’s not unreasonable to suggest that the industry might have been better off in the long run if they had gone through bankruptcy.
Whoever made the graphic above probably knows that the average person thinks that declaring “bankruptcy” means going out of business. They probably also know that this is wrong, but they still made the graphic anyway. And the shame of this is that it teaches politicians the worst lesson possible … namely, to lie and pander, rather than talk openly and honestly about real solutions to real problems.