Lawrence Lessig: the mistake in bailouts

Lawrence Lessig posted a good rant about bailouts today:
These bailouts are an awful idea -- the worst of K St. capitalism (== kapitalism) inviting an insanely bad future for the industries affected. If there's one thing worse than Detroit managed by the managers who have been driving the American auto industry into the ground for the past three decades, it is Detroit managed by politicians.

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People speak about this as if not bailing out Detroit means automobile production in America ends. That's not what failing to bailout Detroit means. Not intervening now would be these automakers would enter bankruptcy. And bankruptcy means the assets of these dinosaurs get reorganized: Someone else buys these companies, at a price the market sets, and runs them profitably, because of the price the market set.