President Bush gave them a temporary loan, enough to get them through the beginning of 2009—and leaving the industry’s fate up to Obama, once he took office. Under the same law that rescued the financial industry, Obama had unilateral authority to authorize a loan. He didn't have to negotiate with Congress, the way he had with the stimulus and would soon do with health care reform. The decision would rest with him and him alone.

But plenty of people were telling Obama not to act. As they saw it, government shouldn’t be in the business of rescuing companies or industries. The economy works best when the market functions without interference, they said, even if that means companies fail and people lose jobs. Instead of asking government for help, they suggested, Chrysler and GM should do what companies usually do when they run out of money: Downsize and reorganize under the supervision of a bankruptcy judge, using loans from the private sector to finance operations while the reorganization is underway.