Alternatives to bailouts

Again, I can draw an implausible inference that folks-in-the-know are reading AQA.
A few posts back I suggested:

I'd really like to see a serious cost/benefit analysis from someone...
What's the likely total cost to "rescue" GM?
Can GM honestly be rescued?
What is the cost of GM failure?

Today's NYT has article suggesting similar point of view:

G.M.’s Troubles Stir Question of Bankruptcy vs. a Bailout
By MICHELINE MAYNARD
Published: November 12, 2008
DETROIT — Momentum is building in Washington for a rescue package for the auto industry to head off a possible bankruptcy filing by General Motors, which is rapidly running low on cash.

But not everyone agrees that a Chapter 11 filing by G.M. would be the disaster that many fear. Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company.

Yes - there are alternatives to bailouts... Yes, bankruptcy would be painful... BUT: what are the relative risks involved?

If a bailout simply postpones the inevitable ("Can GM honestly be rescued?"), getting the worst over with quickly might be the cost-effective path to take.

Atrios over at Eschaton raises similar issues:

"I don't know for sure that just letting GM filing for bankruptcy is the best route, but if it isn't then it just means there's something wrong with our bankruptcy laws and/or our dealings with "too big to fail" companies.
...
The system needs to have standard ways of dealing with these things. If the ones in place don't work, we need new ones, not free money for failures."

I note that Atrios is one of the folks who anticipated the current crisis many many moons ago, for over a year referring to mortgage-backed securities as "big shitpile".

Have a nice day.