Mick Weinstein The Week's Best Stock Blogs

While the market tests new lows and the economy continues to weaken, a decision that could further impact every American taxpayer stands right now before Congress: Should Detroit's auto makers be tossed the same sort of lifeline that some financial institutions received from the U.S. Treasury - tens of billions in aid to ensure safe passage through this crisis? Market bloggers weigh in. As always, click through to read the entire item if it piques your interest:

The 'No Way' Camp

University of Michigan professor Mark Perry compares average salaries for Big Three auto workers with industry peers and the market at large and asks pointedly: "Should U.S. taxpayers really be providing billions of dollars to bailout companies that compensate their workers 52.5% more than the market...54% more than management and professional workers, 132% more than the average manufacturing wage, and 157% more than the average compensation of all American workers?"

Always insightful Megan McArdle, blogging at The Atlantic, believes the money would be much better spent on other goods and services: "Bailing out the auto industry offers no net gain to society. It is a straight transfer of resources from one sector to another: we tax money, or borrow it from a finite pool of capital available to the nation, and spend it on auto workers. The people who pay the taxes, or the people who would have borrowed that investment capital, now have less to spend. Whatever they would have bought goes unbought; whoever would have made it goes unemployed... We have the illusion of a gain only because that other group of people is invisible... we're just pouring money into the same deep hole that will periodically reward our efforts by coughing up the Pontiac G6."

Ryan Avent at The Guardian thinks it's a terrible idea, and sees a big difference from the efforts to save AIG and the banks: "a bail-out involving tens of billions of taxpayer dollars ought to hold out the promise of helping the people it's supposed to help. Saving Ford, General Motors and Chrysler provides no such hope. In all probability, a bail-out will hurt the very region it's meant to help... Political energy in the Rust Belt is geared toward maintaining the status quo at the expense of other priorities."

Jim Wiandt of IndexUniverse questions the President-elect's advocacy of a Detroit bailout: "Obama's lead with aid for automakers is not an auspicious start... To me it's right up there with Bush's opening with steel tariffs when he started 8 years ago. Let's take our least efficient, most poorly run and least competitive industries and prop them up. Great idea!"

UC Berkeley econ professor Brad DeLong: "I understand that the argument 'you saved X from bankruptcy, why won't you save GM from bankruptcy?' is very hard to deal with in a soundbite. And I believe the federal government has an obligation to autoworkers and retirees. But this obligation is not well-exercised by keeping GM out of bankruptcy."

Justin Fox, blogging at Time.com, agrees that GM's arguments against Chapter 11 don't hold water: "GM is headed for bankruptcy without government intervention. So any government intervention ought to be structured like a bankruptcy: Current shareholders wiped out (they're almost there already), debt converted to equity, top management out. We could just, for the sake of not scaring car buyers, call it something else. 'Government-arranged workout'? 'Bailoutruptcy'? 'GMerdämmerung'? 'Economic stimulus'?"

Ockham Research finds an amusing parallel: "You cannot help but laugh when you hear that GM is the world's leading purchaser of Viagra. The Detroit News reported in 2006 that GM spent $17 million dollars on the 'little blue pill'. Admittedly, this is a relatively small portion of the more than $5.6 billion per year that GM spends on health care for their employees... but the Viagra problem is a symptom of an overall cost management illness."

The 'Yes, Unfortunately' Camp

Always ready to question popular opinion in the econo-blogosphere, Felix Salmon presents four good reasons to go ahead with a GM rescue package, critically examines those very reasons, then concludes: "count me in on a strategically-oriented bail-in package which benefits the Midwest, rather than GM's bondholders and shareholders."

James Surowiecki at The New Yorker concurs: "[I]f G.M. goes under, so too will many of its suppliers, who do business not just with G.M. but with other car companies as well. That, in turn, will make it hard for those companies to keep the assembly lines going. So the ripple effects of a failure of G.M. or Ford are bigger than we might imagine."

NYU Business Professor Robert Salomon differentiates between GM and Ford on the one hand, and Chrysler on the other: "Although I am not opposed to the idea of providing aid to the auto manufacturers, there is a difference between an investment and an expense. Injecting capital into General Motors and Ford represents more of an investment. An injection of capital into Chrysler would represent nothing more than an expense."

John Lounsberry thinks the money should flow to the automakers, but in the process, those firms should be at least partially nationalized: "I look back to the Chrysler rescue of the early 1980s and find that to be a good model for the current situation. We did essentially most of the nationalization process there, but kept the management in private hands because of the $1 a year man, Lee Iacocca."

Investment banker John Slater looks for lessons from IBM's descent on Washington in the early 90's: "Yes, let's preserve American jobs, but as we do so, let's invent a new transportation industry that will eclipse what's left of the old car companies and in the process that will position America for energy independence and assure a better environment for our grandchildren."

Finally, Prudent Speculations thinks a bailout should be combined with adoption of Boone Pickens' plan to build out massive wind energy fields and move auto fuel to natural gas: "Congress should put such stipulations in the agreement so that it forces the Big 3 to significantly ramp up their efforts to produce natural gas friendly vehicles as an intermediate solution to our country's dependence on foreign oil."