First, before I start, I need to get this out there: I was/am firmly against the auto industry "bailouts." I don't care who did it; I do not believe the government should have rewarded poor business decisions. It's quite simple in my book. If you make good business decisions, you survive. If you don't, you fail. By bailing out GM and Chrysler, the government ultimately mitigated risk away from a company and ensured that they would be preserved no matter how badly they performed. The cost of setting this precedent outweighs the short-term benefit of saving these companies. I wrote about this in one of my first ever blog posts: http://loudmouthelephant.blogspot.com/2011/11/too-big-to-fail-dangerous-precedent.html
But why am I writing about this now? For one, Vice President Joe Biden and Vice Presidential nominee Paul Ryan are set to debate tomorrow, and I'm sure this will come up. Joe Biden is often heard at campaign rallies touting the "Bin Laden is dead and GM is alive" line. Take a look: http://www.detroitnews.com/article/20120903/POLITICS01/209030369. He even said it in his DNC speech in Charlotte, North Carolina earlier this year: http://www.youtube.com/watch?v=bKCwQnIygcw
It's interesting: President Obama tends to blame George W. Bush for the bad things he "left" us, but he doesn't give Bush the credit he deserves for the good things. No, Obama tends to take credit for those himself in the most cherry-picked fashion he could. Never mind that the mission to hunt Bin Laden began under Bush, and Obama merely continued the task... I won't even get into that. I want to talk about the claim that Obama saved the auto industry.
Going forward, I ask a simple question: how does one dole out credit for a success? Well, if I built 75% of a house, and my partner built 25%, I think I would get 75% of the credit and he would get 25%. Or heck, maybe I'd be a nice guy and say it's even. That's not the case the democrats are making with respect to "saving" the auto industry. In my opinion, Team Obama tends to think Americans are stupid. They champion the phrase, "we saved the auto industry" while also repeating, "Mitt Romney would have let them go bankrupt." I will get to that later.
Let's focus on some simple facts surrounding the auto industry bailout. According to this CBS article (read it here: CBS Fact-Checks DNC Speeches), the auto bailout was started by Bush. Out of a total of $17 billion given to GM and Chrysler, George W. Bush authorized the release of about $13 billion of it. According to the New York Times (Bush Aids Detroit), Bush even left Obama with a manageable situations with various options on handling the developing crisis. The Times article states, "The auto bailout plan sets 'targets' rather than concrete requirements about what those concessions may be, meaning that Mr. Obama and his advisers have enormous latitude to decide how to define long-term viability." It sounds like George W. Bush did a swell job and even left Obama with options. In fact, with respect to whom spent the most money, Bush gave $13/$17 billion, and Obama gave $4/$17 billion. In my book, Bush should get about 76.5% of the credit, and Obama should get about 23.5% It's sad, however, that we don't hear this discussed much in the media, and we constantly hear that phrase "Mitt Romney would have let them go bankrupt."
So when the left talks about Mitt Romney's recommendations, what are the referring to? As it turns out, Team Obama is referencing an op-ed Romney published in the New York Times (see it here: NYT Mitt Romney Op-Ed). Interestingly enough, Team Obama plays on the word "bankrupt," again, while thinking Americans are stupid. They think that if Americans hear the word "bankrupt" they will feel the negative connotation behind it, forgetting the fact that it's a regulated, potential company-saving instrument. Yes, Mitt Romney advocated for a restructuring of the automaker's business operations, and most importantly, he called for new leadership. He said:
- "Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations."
Perhaps the last line of the article is the most important:
- "In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check."
You know who else advocated for the auto industry to go through bankruptcy? That's right: President Obama. As seen in the CBS article highlighted above:
- "Where Mr. Obama put his real stamp on the bailout was setting the parameters in March 2009, allocating General Motors and Chrysler an additional $4 billion in exchange for agreeing to major restructuring of their operations...
Bankruptcy was not off the table for Mr. Obama: in his March 2009 restructuring announcement, Mr. Obama gave GM and Chrysler one month to shape up or face bankruptcy. In fact, Chrysler did file for bankruptcy at the end of April 2009, GM shortly thereafter, though both emerged from bankruptcy stronger than before."
Wait?! WHAT?! President Obama "let Detroit go bankrupt?!" Yes, you read it correctly: President Obama and Joe Biden, while thinking that Americans are sheer suckers (there really is no other way to put this), gave a minority amount of bailout cash to the automakers and chastised Mitt Romney, all while implementing the EXACT SAME program that Mitt Romney himself suggested.
To go "off the cuff," I just want to say, "come on, President Obama. Do you really think you can fool us?" I fear, based on how many times I see Team Obama's "we saved GM" claim on Facebook, I think he believes he can. Please, Paul Ryan, when Joe Biden comes out with his deceitful little quip, be sure to give him a cold bucket of water known as facts.
Yes, facts are facts, truths are truths, and I think it's my job to pass this one on. What do you think? Please share this with a friend.