Give me money or I'll kill this three-headed dog...

James Kwak wonders why Chrysler needs a government bail-out when Chrysler is owned by a private equity firm. If Chrysler's restructuring plan is so good, the private equity firm should have enough confidence in to provide more funding. Apparently, Cerberus doesn't have quite that much confidence.

However, we can’t reliably infer what Cerberus really believes from their behavior, because even if they were willing to put in their own money, they wouldn’t say so until after the government turned them down. You’ve probably heard this bank bailout analogy: The banker walks into the Oval Office, puts a gun to his head, and threatens to blow his brains out unless he gets a bailout; the government bails him out because they don’t want to have to clean the carpet. The difference here is that no one cares about Cerberus (the three-headed dog that guards the entrance to the underworld), so instead he dragged a hostage named Chrysler into the Oval Office and put the gun to her head. In the end, this feels like a kidnapping, where Cerberus is betting that the Obama Administration won’t be willing to take any risks with the hostage’s life.