I have no brief for the auto companies. Clearly, their plight is due to years, decades of mismanagement — much more than the demands of their unions, and in many cases because they’ve spent years lobbying Washington to stop the kinds of regulatory changes that might have helped them on the way they’re now going to have to go now. But there’s no ignoring the massive disconnect between the controversy, attention, number of hearings and general controversy over the relatively small number of dollars it would cost to bailout the auto makers.
I want to be clear: what I’m saying here is not necessarily that we should go easier on the automakers or that we act carelessly about allowing the banking system to collapse because it’s managers have acted like idiots. But I do think a big, not very good, and really underappreciated reason for the disjuncture is that the auto makers are structured in a way, are economic entities in a way, that most of us can have some basic understanding on how they operate, what they do. And to the extent that they’ve been habitually mismanaged we are, as a country, understandably reluctant to reward incompetent management. On the other hand, I think the financial services giants are getting some level of a free ride because a lot of us (and this would seem to include some of the people running the big financial services giants) just have a really hard time understanding what it is they even do or how their fundamental business model works.