I agree with just about everything Robert Reich says in his post, "The Real Difference Between Bankruptcy and Bailout."  We always suspected that it might be possible, we may have hoped, but now we have the demonstration.  Sometimes, I think the political spectrum from Left to Right is curved, and that I am so far to the Right that I find myself closer in viewpoint to those far to the Left rather than in the middle of the spectrum.

Here's what Reich says about the conduct of the bailout thus far:

So why, exactly, is the Treasury substituting government bailouts for chapter 11? Even if you assume Wall Street's major banks and insurance giant AIG are so important to the national and global economy that they can't be allowed to fail, that doesn't mean they have to be bailed out. They could be reorganized under bankruptcy protection. True, their creditors, shareholders, and executives would take bigger hits than they're taking now that taxpayers are bailing them out. But they're the ones who took the risk. We didn't.

The Treasury seems to have lost sight of its real client. It's client is not the creditors, shareholders, or executives of any of these firms. Its sole client is the American people.

I have said this myself and will do so again (here and here, for some examples).  But you can just anticipate that this post of Reich's is going to include something about bailing out automakers.  And, yes, I'm not going to agree with everything he writes, but he's got this part mostly right as well:

In exchange for government aid, the Big Three's creditors, shareholders, and executives should be required to accept losses as large as they'd endure under chapter 11, and the UAW should agree to some across-the-board wage and benefit cuts. The resulting savings, combined with the bailout, should be enough to allow the Big Three to shift production to more fuel efficient cars while keeping almost all its current workforce employed. Ideally, major parts suppliers would adhere to the same conditions.

The purpose of the government getting involved in the reorganization beyond the bankruptcy code should be to speed up the resolution of the companies' financial distress, not to shield the stakeholders from the consequences of their actions.