This is the Cato Daily Podcast for Friday, May 1st, 2009. I'm Caleb Brown.

Chrysler is entering bankruptcy, but for a company that's been bailed out by the government multiple times, the question

must be asked, why now?

Why not 30 years ago?

And why not six months ago?

Dan Eekinson, Associate Director of the Cato Institute's Center for Trade Policy Studies, explains.

Yeah, it should have happened from the outset.

To a certain extent, bankruptcy is stigmatized in the United States. Most people think bankruptcy means liquidation. That is one form of bankruptcy.

And the concern I think was that in the bankruptcy process nobody was going to buy cars from Chrysler.

Well, nobody's been buying cars from Chrysler anyway on account of the bad economy and

account of the products it has to offer.

The fact that it was portraying itself willingly as sort of a ward of the state,

dangling by a string, is hard to distinguish from it being in bankruptcy.

And in fact, being in bankruptcy at least suggests, when it's defined properly,

that they're trying to do something about the problems and that they could come out. The Obama administration offered a plan, the

the auto task force was working with stakeholders to try and come up with a

plan to try and come up with a plan to that all could agree to to move forward

Some of the stakeholders didn't like the terms of the plan

understandably some of the bondholders didn't want to receive

29 cents on their investment dollar particularly in light of the fact that other

stakeholders for example the UAW was going to walk away under this plan with 55% ownership stake in Chrysler, a company

that the government is implicitly and explicitly backing. That could be a pretty good investment.

...