George Mason Law Prof Todd Zywicki’s class is in session at the WSJ. After explaining the benefits of Chapter 11 for companies that need restructuring to compete in a still thriving industry (because, for example, they are burdened by unrealistic compensation/benefits arrangements with workers and top management), he adds:

Those Washington politicians who repeat the mantra that “bankruptcy is not an option” probably do so because they want to use free taxpayer money to bribe Detroit into manufacturing the green cars favored by Nancy Pelosi and Harry Reid, rather than those cars American consumers want to buy. A Chapter 11 filing would remove these politicians’ leverage, thus explaining their desperation to avoid a bankruptcy.