One of my favorite financial writers is James B. Stewart, and I'm always eager to read his column in The Wall Street Journal.

Today he writes that "Washington seems on the brink of extending a lifeline to the Detroit auto industry. In my view, it could actually be a good investment."

He goes on to describe his recent forays into car dealerships where he found strong demand for many American cars and difficulty finding them at anything much below MSRP. Anecdotal evidence aside, the sales numbers released by General Motors (NYSE: GM) and Ford (NYSE: F) tell a different story.

Without getting into detailed projections of consumer demand and discounted cash flow, here's my rebuttal to the good investment argument: If it's such a good deal, why is the U.S. government the only party even considering the investment of another nickel into the Detroit auto industry? I know credit markets are tight, but there are still plenty of sovereign wealth funds that could pony up a few billion for this once-in-a-lifetime opportunity to own a piece of Detroit at a bargain basement price. The silence of sophisticated investors is deafening, especially when considered in the context of the significant short interest in shares of GM and Ford. The smart money seems to be betting on a less-than-brilliant future for the industry, and we're kidding ourselves if we think of the bailout as anything other than a handout.

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