Associated Press
Romney still wishes policymakers had let Detroit go bankrupt.
Looking back over the last three years, there's arguably no better example of a policy Republicans got wrong than the rescue of the American auto industry.
When President Obama launched his ambitious policy in 2009, he was taking a major gamble -- not only with the backbone of American manufacturing, but with his presidency and its ability to use the power of government to repair a private industry facing collapse. As First Read noted at the time, "As the GM bailout goes, so goes the Obama presidency."
We now know the gamble paid off. Chrysler has posted its first profit in 15 years; GM is building new American facilities; and plants are operating at a capacity unseen in a long while. General Motors went from the brink of total failure to reclaiming its spot as the world's top automaker, and as the Wall Street Journal reported earlier this month, "The auto industry hasn't just turned the corner. It's starting to accelerate."
Had it not been for the Obama administration's policy, these heartening headlines would have been impossible. And yet, Mitt Romney still isn't happy.
In a new Detroit News op-ed, the former Massachusetts governor says he's glad the industry still exists, but proceeds to complain anyway about the way in which Obama rescued GM and Chrysler from an imminent collapse.
Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry. The indisputable good news is that Chrysler and General Motors are still in business. The equally indisputable bad news is that all the defects in President Obama's management of the American economy are evident in what he did.
Instead of doing the right thing and standing up to union bosses, Obama rewarded them.... By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.
It takes a fair amount of chutzpah to face a crisis, get it wrong, then whine about the way in which the other guy got it right.
This is a subject Romney would be better off ignoring. After all, in 2009, he famously urged policymakers to "let Detroit go bankrupt." Romney was so certain Obama's policy would fail, he said Americans could "kiss the American automotive industry goodbye" if Obama's policy moved forward in 2009. Indeed, at the time, Romney called the administration's plan "tragic" and "a very sad circumstance for this country." He wrote an April 2009 piece in which he said Obama's plan "would make GM the living dead."
With the benefit of hindsight, we now know all of Romney's warnings were wrong. For him to double down today on the virtues of letting Detroit go bankrupt is just bizarre.
I'm reminded of this clip, which Democrats gleefully put together last summer.
Of particular interest is the last quote in the clip, in which a Chrysler executive responded to a Romney quote by saying, "Whoever told you that is smoking illegal material. That market had become absolutely dysfunctional in 2008 and 2009. There were attempts made by a variety of people to find strategic alliances with other car makers on a global scale and the government stepped in, as the actor of last resort. It had to do it because the consequences would have been just too large to deal with."
In other words, Romney wasn't just wrong; he was drug-addled wrong.
To be sure, the former governor wasn't the only Obama critic whose predictions now look foolish, but Romney is the one who still likes to pretend he was right.
Even the complaints themselves are strange. As Marcy Wheeler explained, Romney's "basically complaining that the bailout preserved the healthcare a bunch of 55+ year old blue collar workers were promised. He's pissed they got to keep their healthcare. He's also complaining that banks took a haircut."
I haven't talked to the White House about this, but I suspect if 2012 comes down to a debate over who was right about the auto-industry rescue, Obama likes his chances.
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In the editorial Romney wrote in the NY Times in 2008 he had it exactly right. In the editorial he argues that just infusing money into the auto companies will just delay their inevitable demise. Instead, he argued, what is needed is for them to go through a chapter 11 bankruptcy so their debt can be restructured, their pension obligations can be restructured, and they can reduce manufacturing and distribution facilities to better match their current market share. That is exactly what the Obama administration did. Without the bankruptcy that both GM and Chrysler went through they wouldn't be around today.
mg, it seems as though you're saying that Romney deserves credit for knowing how to have handled GM and Chrysler. In fact it seems that he should be saying what you've outlined out on the campaign trail. But he's not. And I can only surmise that he's not because as President he would have had them file bankruptcy and fend for themselves (find private money to support the restructuring) from that point on rather than be bailed out. I don't believe the reality of that would have been anywhere near as good as where they are today.
Obama took a bit of a gamble and won. But I believe he did it knowing the devastation that would have otherwise taken place in Detroit and every small town fanning out from there. Obama is the one deserving credit for this, not Romney.
Ho hum. Hard to get excited over right winged pig snorting anymore. Even the three stooges start going from funny to sad after the umpteenth show. Sad to think that these candidates have a following. Should we blame the schools or their parents?
Gotta be the parents or private school teachers, Paul; public school teachers belong to unions.
The White
House believes it can win back depressed and economically stressed voters by
turning President Obama into the storyteller-in-chief again. But victims of
Obama’s Chicago politics don’t want to hear any more of his own well-worn
tales of struggle and sacrifice. They’ve got their own tragedies to tell —
heart-wrenching dramas of personal and financial suffering at the very hands
of Obama.
Consider
the real-life horror story of 20,000 white-collar workers at Delphi, a leading auto parts company spun
off from GM a decade ago.
As
Washington rushed to nationalize the U.S. auto industry with $80 billion in
taxpayer “rescue” funds and avoid contested court termination proceedings,
the White House auto team schemed with Big Labor bosses to preserve UAW
members’ costly pension funds by shafting their nonunion counterparts.
In
addition, the nonunion pensioners lost all of their health and life insurance
benefits.
The
abused workers — most from hard-hit northeast Ohio, Michigan and neighboring
states — had devoted decades of their lives as secretaries, technicians,
engineers and sales employees at Delphi/GM.
Some
workers have watched up to 70 percent of their pensions vanish.
John
Berent of Marblehead, Ohio, lost one-third of his pension:
“I worked as a salaried employee for GM (30 years) and Delphi (10 years). After 40 years of
dedicated service, I was forced to retire. Then Delphi terminated my health care, life
insurance, vision, dental, then terminated the pension plan. Everything I
worked 40 years for was wiped out.”
Kelly
Fabrizio of Franksville, Wis., saw her pension reduced by 55
percent after working 30 years at Delphi/GM: “I am truly scared for my
future. Every day I wake up, shake my head and say out loud — This Is Not How
It Was Supposed To Be.”
Roger
Hoke of Columbus, Mich., and his wife were both longtime Delphi workers. His pension shrunk by more
than 40 percent: “After 33 years with GM and another 10 with Delphi, what did I do wrong to deserve
such a fate?”
Paul
Dobosz of the Delphi Salaried Retiree Association recounts how they got
screwed: “The Auto Task Force knew that the only thing standing in the way of
GM getting what they wanted out of Delphi was the already frozen pension obligations.”
They
hatched a plan to dump those pensions on the federally run Pension Benefit
Guaranty Corporation, while at the same time “devising a clever way to make
the UAW pensions whole using GM and TARP money to accomplish it.
“The
scheme was documented in sworn depositions (that) revealed ... that some
groups of workers were more ‘politically sensitive’ and would be afforded
special treatment (i.e. subsidy using TARP money) while others less
politically worthy would be left out.”
In other
words: Obama’s team of autocrats — stocked with Big Labor-friendly appointees
and self-admitted know-nothings about the car industry — decided to “cherry
pick” (one Obama official’s own words) which obligations the new Government
Motors company would assume and which they would abandon based on their own
political whims and fealty. Due process and equal treatment of union and
nonunion workers be damned.
Administration
officials assert that the Delphi workers’ pension fund was underfunded, but two separate
actuarial analyses undercut the claim.
The Delphi workers sued the feds and will
have a day in court tomorrow, Sept. 24. They are not asking for a bailout.
They are simply asking for fair treatment under the rule of law.
Delphi supporters also point out that
the very scheme used to “top up” the union workers’ pensions with taxpayer
subsidies was challenged by the federal government and ruled illegal by the
Supreme Court in the 1990s.
A
separate investigation by TARP inspector general Neil Barofsky, announced
last week, will also probe “whether political considerations played a role in
favoring hourly over salaried retirees.”
It
shouldn’t take long to unearth the facts. Obama’s own former auto czar Steve
Rattner admitted in his new memoir that “attacking the union’s sacred cow”
could “jeopardize” the auto bailout deal.
While
Obama conducts his worker empathy tour at staged town halls and rallies
across the country, his Treasury Department continues to stonewall and
refuses to answer questions about the Delphi disaster.
But many
workers left out in the cold know the truth: Lip-biting, yarn-spinning Obama
doesn’t feel their pain. He caused it. I AM A X OBAMA SUPPORTER WHO PLANS ON
DOING EVERYTHING I CAN TO GET HIM BEAT IN THE SWING STATE OF OHIO FRO HIS
DISPARATE TREATMENT OF THE DELPHI SALARIED WORKER JAMES G GEVEDON
"Obama's two goals are 1. spread the wealth and 2. strengthen the union." contessa61 @ 2:32 PM
Obviously you have a problem with that; the rest of the country? Not so much.
Why not ensure that those actually responsible for the manufacturing, marketing, distributing (and purchasing) of products receive due compensation? It's not as if the "job creators" have produced any economic "miracles".
Well, maybe for the Caymans...
So in just one year.. if you figure the auto bankruptcy would have left 1.5 million people unemployed for even just one year and those workers earned an average of 30k/yr (low) then you're looking at ~2.9billion in lost Social Security taxes, ~4.5billion in lost income tax (low estimate), and 18billion paid in unemployment benefits. These are all estimates, but fair ones I would say... so one year alone would have cost 25.4 billion just in income lost, money out. That doesn't even begin to factor in the lost money in the economy and lost income off those jobs, etc from these people not spending... Even if we never see another dime of GM money, this was tax dollars WELL SPENT!