Basically, General Motors CEO Rick Wagoner is promoting the idea that his company is (in the new magic catchphrase) "too big to fail," and should get a little bit of the government's AIG-style lovin', possibly as an aid to merger with Chrysler.
For the record, we at the Egg have always been a tad confused by the last auto industry bailout, when the government "saved" Chrysler, much less by the weird idolatry offered afterward to Lee Iacocca. It has never been clear to us that $1.2 billion in loan guarantees did more than delay the inevitable. So far, the "inevitable" has meant a merger with Daimler-Benz, followed by a breakup when the Germans realized what anybody with half a brain has known since the 1970s: the American auto industry is doomed. Which is why, twenty years later, Detroit shows up in Washington, again with its begging bowl in hand.
Of course, the fact that an industry is doomed doesn't mean it should be abandoned hastily. We're all for avoiding panic and massive disruption of the nation's economic life, which the Chrysler bailout probably did, and which the more recent bailouts may or may not do. (And heck, that first one was only $1.2 billion, which right now looks like chump change.) There's a lot to be said for easing the pain, and allowing the death to be gradual.
But the government does eventually have to make a choice: let the wounded animal die, or put it on permanent life support. And, given the failure of previous efforts at state-run industry (anybody drive a Yugo lately?), there really isn't much choice at all.