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Romney, “Let Detroit Go bankrupt”: Auto-Industry Rescue Paying Dividends

One of the more clear-cut triumphs of President Obama’s first three years has been the success of his auto-industry rescue. Republicans predicted it would fail miserably. They were wrong and the White House was right.

Bloomberg reported this week that auto plants are operating at a capacity unseen in a long while, adding shifts and creating jobs. The Detroit Free Press reported today that GM has reclaimed the crown of world’s largest automaker. And perhaps best of all, Michigan’s unemployment rate has also dropped to its lowest levels since September 2008, buoyed by the auto industry.

It led Jonathan Cohn to report today that while Michigan is still struggling to get on its feet, “recovery clearly seems to be underway” in the state, “most likely because the auto industry is growing again.”

President Obama and his allies will claim credit for this resurgence. They should — and not just for the obvious reasons.

The decision to rescue the Chrysler and General Motors in early 2009 was not popular: The only way to save the industry was to put up federal dollars, something presumptive Republican nominee Mitt Romney now says he opposed. And that was not what the public, already suffering from “bailout fatigue,” wanted to hear. But the rescue also provoked ambivalence in Michigan. The administration was serious about using the structured bankruptcy to reorganize the companies into leaner, more competitive firms. That meant layoffs and, over the long-term, significantly lower pay for unionized auto workers.

A lot can still go wrong, with the industry and with the economy…. But positive job growth in Michigan is clearly good news — not just for Obama and his allies but also, and more important, for the people of the Midwest.

Remember, dozens of prominent Republican officials, including most of the GOP lawmakers in the House and Senate, as well as the party’s leading presidential candidates, were absolutely certain the rescue would be a disaster. In the midst of an economic crisis, Republicans saw the American automotive industry — one of the central backbones of the nation’s manufacturing sector — teetering on the brink of collapse. The GOP was prepared to simply let it fail, forcing hundreds of thousands of workers into unemployment during an already-severe jobs crisis. Mitt Romney’s infamous phrase was, “Let Detroit go bankrupt.”

What’s more, Republicans were equally certain that Obama’s rescue plan was hopeless. It was a foregone conclusion, they said, since government intervention in the marketplace is always a disaster. Romney called the administration’s plan “tragic” at the time.

Except they were wrong — about literally every aspect of the debate.

By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, January 19, 2012

January 20, 2012 - Posted by raemd95 | Auto Industry | Barack Obama, Economic Recovery, General Motors, Jobs, Michigan, Mitt Romney, Politics, Republicans