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.
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This actually highlights what is one of my bigger problems with our political system and the atmosphere it fosters. This might not be a popular viewpoint, but I’ll elaborate.
ReplyDeleteFirst, let me just say that what you point out here is absolutely correct LME. The auto bailout was started under Bush, and most of it had already passed before Obama even came into office.
To make things even more complicated though, keep mind that it was passed by a Democratic Congress and was largely opposed by Republicans. But at the same time, Bush could have chosen to rally his administration against it and/or veto it, and did not.
So in reality, no matter how you look at it, both parties had a fair amount of contribution towards the ultimate passing and results of this bill. Which, many people seem to ignore, is the case for the overwhelming majority of the bills/legislation. Patriot Act? Both parties. Deregulation of banks? Both parties. Wars in Iraq/Afghan? Both parties. Tax cuts? Both parties. Medicare? Both parties. Social Security? Both parties… etc.
Yet, for the overwhelming majority of the cases where these issues are discussed in media, campaigns, and/or general politics… these bills are near-always attempted to be labeled as “Bush’s tax cuts” or “Obama auto bailout”, as if one single person (or even party) is fully responsible for a bill and its results in its entirety. But this is very, very rarely the true case here.
That, is a major problem to me.
But I’ll even go as far to say that this is merely a symptom of a bigger issue here, with this atmosphere encouraging the exploitation of both the political ignorance of the general populace in combination with many having passionate party loyalties. Many people wear their political party affiliation like it’s a badge as close to their heart as their religion or morals, but that is not and was never the intention of having a two party system. But this high sense of loyalty/pride fosters the idea that your party can do no wrong, and anything/everything bad that ever happens is 100% the fault of the other party, is not only incorrect but just ignorant of the reality of how the system works.
These methods do far more to drag out/worsen our issues, hurt, and divide us than it does anything else. But, I unfortunately don't see it changing anytime soon (if ever).
It sucks that I'm super busy and I have to keep this short, but I do agree with you on the nature of information sharing, reporting, etc. This example, the democrats claiming "we saved Detroit" is just one of many. While it does happen on both sides, the slant of the media pushes one side's argument stronger. Last night, while watching Wolf Blitzer, which is very rare for me to watch cable news, he said something like "the fact that Obama saved the auto industry resonates with Ohio voters." I was very angry upon hearing this. While both sides push it, the media spreads it.
DeleteThe republicans balked on the bailout because they wanted the GM management to reconfigure ALL union contracts - you know the way it would be done in ANY normal bankruptcy. The union flatly refused and the original bill didn't pass. Bush (and I'm still ticked off about this) went AROUND them and instead used monies 'leftover' from the first stimulus - which ALSO happened under Bush at the end of his presidency - another sore spot w/me. McCain even suspended his campaign to go back to D.C. to vote FOR the stimulus.
ReplyDeleteI REMEMBER Obama, after he won the election, screaming, daily on t.v. that he 'needed that money' to 'save America.'
Historically, government stimulus (QE whatever number this time) NEVER works and serves only to create inflation in the long run. The proof of this is now apparent in the current increase in grocery, gasoline, utility, etc. bills. IMO NO ONE should ever be 'bailed out' by our government (tax dollars).
So - Bush did 'save' the auto industry (which I did not and still don't agree with - but it's done, and I moved on)... Bush also set the wheels in motion to 'get' Bin Laden. Pretty much buried by the MSM: Obama and his DOJ began (but later dropped) PROSECUTION attempts on those responsible for gathering the information that made it possible.
And now that we know it was NO video that caused the attack on our Libyan embassy; that it WAS a PRE-PLANNED, Sept 11 terrorist attack... how come NO ONE mentions the FACT that EVERYONE at the DNC convention spouted the 'GM's alive and Bin Laden's DEAD' mantra - less than TWO WEEKS days prior. Obama himself bragged that HE put 'al Queida on its heels.'
@RKen Ahem... I'm not a party 'hack'. I see good stuff and bad within both parties. No matter how you feel about them, in 2010 the Tea Party went after the R's with a vengeance - with a clear agenda of removing those who have been there so long they no longer remembered WHO the H*LL they work FOR. They sought, and for the most part succeeded in getting rid of the go along to get along bunch; those who's ONLY concern was their OWN next election.
And I said 'for the most part'. Being from Nevada, I still have a GIANT sore spot for Palin's pushing of Angle, who - although I voted for her AGAINST Harry Reid, was IMO - well, pretty much nuts. I've lived here my whole life and I'd never HEARD of Sharon Angle!
We HAD a better, albeit much more 'moderate' R candidate; whose name and reputation was well known statewide and who, I believe, COULD very well have put Dirty Harry Reid out to pasture where he belongs... AND had Whorehouse Harry been REMOVED from his high horse as Senate leader... who knows how this last two years might have gone - for the WHOLE country? Thanks to Sarah Palin AND the Nevada Tea Party - we'll never know.
See - not a hack : ) Just a plain, old, constitutional/fiscal conservative... (operative word 'old'...lol)