, you’re exactly right to point out the incredibly simplistic economics employed by defenders of the GM bailout. And of course, they also ignore the alternatives that existed for GM, the brazen lawlessness of various elements of the bailout, and the constraints it has put on the American auto industry going forward.
Todd Zywicki does a great job of laying out the grisly details here
. He notes, as you do, that the attitude behind the bailouts—and the implications of that attitude for our economic policy more generally—may well be the most disturbing aspect of the whole story.