Why does every difficult decision in the world today have to be boiled down to an either-or proposition?
Nations are painted into corners of supporting either Israel or Palestine. States are characterized, sometimes based on the difference of a handful of votes, as being either red or blue. And, in the most immediate circumstance, the American people and their elected representatives are being asked to choose between either a bailout or bankruptcy for the Big Three automakers.
Listening to the talking heads on radio and TV, reading the newspaper columns and editorial pages, watching the deliberations of congressional committees on Capitol Hill and hearing the pleas coming out of Detroit, one is left with the impression that the only two options for General Motors, Ford and Chrysler are a wildly unpopular bailout from Washington or a catastrophic declaration of bankruptcy.
What about a middle ground? What about an infusion of federal money to keep the automakers afloat — with lots and lots of strings attached? What about using the industry’s critical condition as an opportunity to reverse its self-destructive course and put it back on the road to financial health?
Virtually everyone agrees that the American automobile industry has brought today’s hardship upon itself by manufacturing too many SUVs and not enough hybrids, by persistently turning back congressional efforts to impose tougher fuel-efficiency standards and by otherwise losing its edge to European and Japanese competitors.
It is also widely accepted that the future of the American auto industry lies in adapting to 21st-century reality: wildly fluctuating gasoline prices, tighter controls on greenhouse-gas emissions, increased use of transit and heightened demand for smaller, more fuel-efficient and alternatively fueled vehicles.
So why not fashion a response to this crisis with a strategy that neither rewards the industry for its head-in-the-sand past nor burdens it with a start-from-scratch future? Why not structure a rescue plan around a new corporate culture that makes Detroit the world leader in innovation, that directs the automakers to play a prominent role in reducing U.S. dependence on foreign oil, that challenges the Big Three to do more than manufacture vehicles that clog our highways and instead become key contributors to a comprehensive national transportation network (including rail, light rail, bus rapid transit and other alternatives to cars and trucks) that offers a wide range of opportunities for research, development and entrepreneurship?
President-elect Barack Obama has made clear that investing heavily in alternative sources of energy and transportation infrastructure — two areas that have a direct impact on the auto industry — will be among the highest priorities of his administration. He has also championed universal health care, which could potentially lift an enormous burden from U.S. automakers. It costs Detroit $1,500 for every car it produces to provide health-care coverage to workers and retirees, while European and Japanese companies, whose employees are covered by national health insurance, spend nothing.
What the U.S. automakers need is neither a bailout nor bankruptcy, but a bridge loan to a new way of doing business built around a public-private partnership. The public — government — invests in infrastructure, offers incentives for technological innovation, sets fuel-efficiency standards and creates a health-care plan that advances American competitiveness in the global marketplace. The private sector — GM, Ford and Chrysler — responds by manufacturing a wide range of products that not only meet consumer demand, but also promote the national interest in cleaner air, energy independence and a more efficient transportation network.
It may be asking too much for the lame-duck Bush administration to take this kind of measured step toward a reasonable compromise between bailout and bankruptcy. One can only hope that by the time Mr. Obama takes office, it isn’t too late.

