Mitt Romney’s Silly Attempt to Take Credit For Saving The Auto Industry
Mitt Romney is being rightfully ridiculed for trying to take credit for saving General Motors and Chrysler.
Mitt Romney is making some news this week for seeming to take credit for something that President Obama probably thinks he deserves credit for:
LANSING, Mich. — Mitt Romney often finds himself on the defensive in Rust Belt states for having been against the auto industry bailout, which many credit with saving the industry. Now, he is taking a new tack on the sensitive issue: he’s taking credit for the industry’s rebound.
Though Mr. Romney’s closest aides acknowledge that he is politically vulnerable over his opposition to the government bailout — immortalized in a New York Times op-ed in 2008 titled “Let Detroit Go Bankrupt” — Mr. Romney on Monday told WEWS-TV in Cleveland that he deserved some praise for the auto industry’s recovery. (In fact, that headline was written by the paper, not Mr. Romney, who originally submitted the piece as, “The Way Forward for the Auto Industry.”)
“I’ll take a lot of credit for the fact that this industry’s come back,” Mr. Romney told the local news station after a campaign event in Euclid, Ohio.
In opposing the bailout, Mr. Romney instead lobbied for a process of “managed bankruptcy,” which he said would have allowed the car companies to restructure and emerge stronger than before.
“My own view is that the auto companies needed to go through bankruptcy before government help,” Mr. Romney said. “And frankly, that’s finally what the president did. He finally took them through bankruptcy.”
The federal government eventually did help the companies restructure through bankruptcy, but only after providing billions of dollars in loans.
Here’s the video:
It is perhaps not surprising that Romeny would try to undercut the Administration’s claim to have saved the auto industry given the fact that it’s likely to be an important campaign issue in states like Michigan, Ohio, Indiana, and Wisconsin. Now, on some level, I do see the point that Romney is trying to make here. He had been arguing against a bailout since the first round of auto bailout money was given out by President Bush even though Congress had explicitly rejected a bill that would have bailed out General Motors and Chrysler (Bush used TARP money which, you will recall, was originally only supposed to go to financial institutions to prevent the supposed collapse that was imminent in October of that year) In a now-famous Op-Ed published in The New York Times, Romney proposed a different path:
It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.
But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
In the end, that kind of “managed bankruptcy” is essentially what happened. Of course, because the financial condition of both auto companies was far more precarious by the late spring of 2009 than it had been in the winter of 2008, the bankruptcy itself was far more complicated and ended up being far too inappropriately politicized than it should have been. There really isn’t any reason why both companies could not have gone into that “managed bankruptcy” in December of 2008 or January or 2009. The outcome likely would have been fairly similar. Indeed, maybe Chrysler could have ended up surviving as of an independent entity rather than the subsidiary of an Italian car maker that is today. Romney wasn’t the only one suggesting that route at the time but, instead, in a final act of craven political cowardice, George W. Bush decided to waste taxpayer dollars on a bailout that didn’t work after all.
With all that said, however, it’s rather ridiculous for Romney to be taking credit for any of this. He wasn’t part of the government or the auto industry at the time, all he really was was a failed Presidential candidate who had written an Op-Ed piece. He largely deserves the ridicule he’s getting for these comments that he’s getting in the news and from the blogosphere, then.
This is what I was referring to at the end of my earlier post when I talked about Romney’s tendency to stick his foot in his mouth. These comments are laughably silly, and now they’re on video for every to play and play over again and, of course, for people like Jon Stewart to mock:
If this is how the rest of the campaign is going to go, Romney is going to have a problem.
Update: And now the Obama campaign is out with a video mocking Romney:
Lets be honest, Mitt not a flip-fopper. He is a pathological liar, the bailout is a losing argument for him and he keeps digging himself into a bigger hole by continuing to lie about it.
Silly? How about a bald faced lie?
Interesting that in GOP land, Obama can’t take credit for Bin Laden being dead, but Romney can take credit for GM being alive.
Of course it will be mocked. He opposed the bailout and now that it worked, he’s taking credit for it. He is a liar and it should be pointed out. Frequently.
Technically Mike, the bailout didn’t work. That’s why Chapter 11 was necessary
Doug,
“There really isn’t any reason why both companies could not have gone into that “managed bankruptcy” in December of 2008 or January or 2009.”
Yes, there is. The credit markets were not working, and the money to fund a managed bankruptcy , even in Romney’s scenraio where the “federal government [w]ould provide guarantees for post-bankruptcy financing”, was not available from any lender other than the government.
It may be difficult for a Randian utopian to admit it, but sometimes markets don’t work.
Ok, you’re right on Chrysler, Doug. GM, however, it worked. And, what Moosebreath said above. But, Mitt really had nothing to do with it either way, and now he’s taking credit for it.
@mike:
Are you forgetting about the billions of dollars we pumped into GM thanks to Bush and Obama? If they had gone into bankruptcy in December 08 we could have saved a lot of that money, which would’ve been a good thing since we never really had it to begin with.
Okay, now I understand – Mitt Romney has a personality disorder.
@Moosebreath:
Even if that’s true, there’s no reason why GM and Chrysler couldn’t have gone into bankruptcy in December 08 with the government being either the provider or, more appropriately, the guarantor of DIP financing. That’s an option several people other than Romney were suggesting at the time. But Bush was too much of a craven coward
All politicians lie, but Romney has reached a whole new level. It’s been so bad that even the Establishment press is noticing and reporting that various statements are untrue. How much of this can he do before it becomes part of the narrative? The Obama campaign must have terabytes of carefully indexed video of Romney taking every possible position on every possible issue except cutting taxes on rich people and trimming regulation of
peoplecorporations. Even Glenn Kessler, WAPO’s “Fact Checker” may catch on that this is not symmetric, it’s way past ‘both sides do it’. And Romney doesn’t have the excuse many have, Palin as an example. Romney is bright enough and informed enough to know better, so it’s clearly a moral failing.@ gVOR08 says
Aww, he’s just being silly. Silly Republicans, they want to take away a woman’s right to control her own body, they a nominating a serial liar to be President. They are just so goofy. There is really no harm in any of it…
Doug, I’m not forgetting. I’m ok with it, you’re not, I guess. GM appears to be doing just fine now and lots of people are employed who otherwise might not be. They’ve paid about half of it back so far.
The Democrats have got to be hoping that Romney just keeps the soundbites coming. He’s his own worst enemy between the bold-faced lies and the innumerable gaffes.
Doug,
Me: “The credit markets were not working, and the money to fund a managed bankruptcy , even in Romney’s scenraio where the “federal government [w]ould provide guarantees for post-bankruptcy financing”, was not available from any lender other than the government.”
You: “Even if that’s true, there’s no reason why GM and Chrysler couldn’t have gone into bankruptcy in December 08 with the government being either the provider or, more appropriately, the guarantor of DIP financing.”
In other words, just because there was no lenders avavilable doesn’t mean you and Romney shouldn’t keep saying there were. Never let mere facts get in the way of your ideology.
I thought Mormons have to follow the 9th Commandment?
Or do they get to lie freely in exchange for not drinking coffee, tea, and alcohol?
Maybe they get absolution from tithing?
And that would be different from the bail out how exactly? It seems you aren’t opposed to the bail out, but to how it came to be. Either way we’d be on the hook.
I said this the other day (before Stewart)…
OBL is dead, and GM isn’t.
But according to Romney Obama shouldn’t take credit for OBL, and Romney should take the credit for GM.
It’s a funny world Republicans live in.
More puzzling than this is Romney’s doubling down on Afghanistan. With 3/4 of Americans wanting out now, including over half of the Republicans, how can he see this a winner.
Davebo,
The bill to Uncle Sam would’ve been much, much smaller if we’d avoided two rounds of cash hand outs and put them in bankruptcy at the start
@ Ron Beasley…
Romney’s support of Afghanistan only makes sense when you realize that every single Romney foeign policy advisor still thinks Iraq was a brilliant idea.
When you are surrounded by half-wits…well…I think you see whare I’m headed…
I was actually in favor of orderly and traditional bankruptcy, myself. Unlike Mitt though, I won’t try to paint what happened as some form of that. We got something worse than I wanted, but something that nonetheless turned out better than I expected.
Mitt can’t say “We got something worse than I wanted, but something that nonetheless turned out better than I expected.” And so he spins.
Speaking of spin, there’s this from Doug:
No. Not “technically” in any meaning of the word. What we call “the bailout” was a sequence of loans and loan guarantees offered as the industry crashed in the Great Recession. There was never any point where a massive cash transfer, or single large loan, was supposed to fix everything.
Actually, one of the good things was that Congress wasn’t so dumb as to make a massive loan early on, one which was not tied to bankruptcy reorganization.
I’m not sure what Romney meant by “managed bankruptcy,” but what we got was largely a bankruptcy bypass through the use of a Section 363 sale. G.M. used bankruptcy to sell itself to the government and UAW, before and outside of a reorganization plan. That screwed over different classes of creditors, and non-contract debtors (employment and environmental plaintiff-creditors), and risked the future viability of the company, since it did not adequately restructure its long-term internal problems. I believe I put the odds of G.M. being back in bankruptcy at 50/50 at the time.
Yikes:
“screwed over different classes of creditors, and non-contract debtors”
should read
“screwed over different classes of equity holders, and non-contract creditors”
But under such a scenario would the bill, regardless of the amount, have been eventually paid back to the government?
I must be missing something…my understanding is that the bailout came in the form of loans…half of which have already been paid back, and all or which are being paid back ahead of schedule…so what’s with the cash handouts???
As for Fiat…Chrysler was already owned by Daimler…so what’s your point?
@Doug Mataconis:
You realize “the start” was during the Bush years?
You are saying Bush should have forced bankruptcy on GM at that point?
Is that legal?
The big thing to keep in mind is the context…
The Banking Industry was crashing concurrently, and no one had a handle on the true size of the Bush Contraction in real time…which meant that at no time did anyone know how bad the Auto Industry was going to be hit. Hence Bush AND Obama having to address it.
Hind-sight is 20-20…especially for partisan hacks…but no one at the time gave GM and Chrysler much chance of surviving no matter what was done. Certainly Romney promised their demise.
@Doug Mataconis:
I’m not trying to be flip here, Doug, since I don’t know much about it, but could the auto and after-market parts industry jobs have been saved if they’d gone that route?
Former MI Gov. Granholm weights in on Mitt:
“There are politics, there are lies, and then there’s you,” Gov. Granholm began. “You take it to a whole ‘nother level. OK, I admit that I have a particular animus toward you, as a guy that knifed us in the back when Michigan was on its knees, but you simply cannot be our president. It cannot happen.”
She went on to chastise Romney for abandoning the people in the auto industry of his home state, ” where your father and so many of your family members had worked,” and instead, “raised your finger into the air, saw which way the wind was blowing, and followed it.”
Her advice to Romney? “Just. Stop. Talking. Just stop.”
@ anjin-san…
Brilliant…and hot.
♫ Wastin’ away in etch-a-sketch-a-ville♫
♫ If I could save lies in a bottle…♫
@Doug Mataconis: “Technically Mike, the bailout didn’t work. That’s why Chapter 11 was necessary ”
Sigh. Doug, where did you go to school again?
What the Obama administration did was to conduct a managed bankruptcy, wiping out the shareholders, giving the bondholders something (not much), and keeping GM running.
Romney’s alternative could be described by a scene from any disaster movie involving earthquakes, where buildings are collapsing into rubble.
@Barry:
Ummm, no they didn’t. After Bush’s failed bailout in December `08, the Obama Administration did another bailout in February 2009 that also failed. Then, bankruptcy became inevitable.
Facts, you see, are stubborn thing.
@Doug Mataconis:
Really Doug, are you going to take a position that makes you look stupid in order to be “right?”
Everybody knew at the time that Bush’s loan was “bridge financing,” intended only to pass the ball to the Obama administration who, again, everyone knew, would extend the bailout in one way or another. As I say above, what we call “the bailout” was a sequence of loans and loan guarantees.
The Bush administration, by withholding bridge financing, could possibly have forced an earlier crisis and bankruptcy, but they clearly did not want to do that.