Much has been written about the possible bailout of Detroit auto manufacturers — by Greg Mankiw, The Economist here and here, Baseline Scenario, Salon and Richard Florida here and here, to name just a few — and nearly everything I’ve read points to the bailout being a terrible idea. The American car manufacturers have been classic examples of mismanaged companies (see the chart above from Professor Mark Perry) who would rather lobby against change than profit from it.

This could be the first big test of character for soon-to-be-president Obama. If he bails out Detroit without serious conditions attached (he’s made preliminary statements to this end, but nothing at all concrete) it would only be for political reasons