“Trying To Rewrite History”: Mitt Romney’s Views On The Detroit Bailout
Over the weekend, a top GOP aide said President Obama got the idea from Romney. A look at his past positions shows that’s not true.
Over the weekend, top Romney adviser Eric Fehrnstrom made an audacious claim:
“[Romney’s] position on the bailout was exactly what President Obama followed. I know it infuriates them to hear that…. The only economic success that President Obama has had is because he followed Mitt Romney’s advice.”
As Fehrnstrom predicted, liberals are reacting with irritation and incredulity. They point out — not for the first time — that Romney published a New York Times op-ed in November 2008, even before Obama had taken office, headlined, “Let Detroit Go Bankrupt.”
The case is actually a little more complex than that, although Fehnstrom’s claim is still hard to take seriously. To understand how we got here, here’s a brief history of Romney’s statements on the car industry.
During the 2008 primary campaign, Romney won Michigan, a victory that was in part attributed to his promises to save the Motor City’s main industry. “If I am president, I will not rest until Michigan is back,” he said. “Michigan can once again lead the world’s automotive industry.” His campaign contrasted that with John McCain, who said, “I’ve gotta look you in the eye and tell you that some of those jobs aren’t coming back.” Romney’s main policy prescription was a series of federal spending for retraining and green tech, to be doled out in $20 billion chunks over five years. The McCain campaign derided thisas a “$100 billion bailout of the auto industry.”
By November 2008, shortly after Obama’s election, the economy was in free-fall. Here’s an excerpt from Romney’s now-infamous column:
If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed. Without that bailout, Detroit will need to drastically restructure itself …. Detroit needs a turnaround, not a check.
Romney called for a “managed bankruptcy,” in which company’s executives would be replaced and union contracts would be renegotiated with more favorable terms. Reversing his position during the Republican primary, he said shedding excess workers was now essential. He wanted the government to oversee the bankruptcy but for it be paid for with private-sector funding. But as former Obama administration “car czar” Steven Rattner and others have pointed out, there did not appear to be any private money on the sidelines. Markets were in disarray and credit was drying up fast — and so, they argue, the federal government’s coffers were the only thing standing between GM and the company’s total demise.
In May 2009, Romney appeared on Fox News Sunday with Chris Wallace, who pressed him on the issue:
WALLACE: Wouldn’t that, at a time when we were in the depths of the recession, when we were really right in the midst of what looked like a financial crisis — wouldn’t that have been disastrous for the economy?
ROMNEY: It’d have been precisely the right thing to do for the economy. To help General Motors at that point, before it had received tens of billions of dollars from the government, go through a structured process either in court or out of court to rid itself of its excessive union contract obligations, would have been the right course, and at that point the government could have helped with warranty guarantees and so forth, with debtor possession financing …. We wouldn’t have closed the business down or liquidated it, we instead would have helped it restructure. It was the right course to take, it’s being taken now, too late unfortunately, and as a result the government ends up with more than 70 percent of GM.
Already, we can see Romney struggling with the issue. But the gist of his main answer is already in place: The government funding was wrong, but the restructuring was right.
In June 2011, he reprised this point on the CBS Early Show: “When I wrote that the auto industry was asking for a bailout, we are unwise to send billions of dollars [to companies], instead — finally — the president recognized I was right, and finally took the company, in the case at General Motors, the company finally went through bankruptcy and went through a managed bankruptcy, came out of bankruptcy and is now recovering.”
With the Michigan primary looming in late February 2012, and his numbers sagging as Rick Santorum surged, Romney was again on the defensive. On February 14, he wrote an op-ed in the Detroit News (now paywalled online), writing, “The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better.” He appeared with Wallace a few days later, and the host again pressed him. Romney once again insisted that GM could have gone through a managed bankruptcy without federal bailout funds.
That brings us to the present day, and Fehrnstrom’s comments. There have been two important shifts in Romney’s position. The first is from pre-recession, 2008 campaign Romney, who supported a $100 billion government investment in maintaining Detroit jobs, to recession-era Romney, who adopted the idea that the automakers needed pain — including potentially significant job loss — to survive. The major questions here are (1) whether it was feasible for the companies to find private financing to restructure and (2) whether the associated job loss and economic ripple effects would have been acceptable. While Romney is correct that the restructuring was what he suggested, his idea at the time was hardly unique; there was a consensus that the companies needed to be significantly reshaped. The question was how to do it, and he said the answer was without federal funds.
The second shift is from the the stance Romney has taken since his op-ed to Fehrstrom’s comments on Sunday. Fehrnstrom is overreaching in claiming that Obama adopted “exactly” what Romney recommended, given his longstanding opposition to the bailouts. It’s understandable that Romney would want to align himself with the successful rescue of the auto industry: While the bailouts are still unpopular with Americans overall, a plurality agree that they helped the economy. Moreover, the move is comparatively popular in Rust Belt states and among working-class white voters with whom Obama is otherwise weak.
Romney’s position on how to handle the carmakers may not have been realistic, but it was far less cartoonish than his liberal critics have suggested. Trying to rewrite history, however, won’t answer their attack.
By: David A. Graham, Associate Editor, The Atlantic, April 30, 2012
“Even Jimmy Carter”: From The Wimpy Guy Standing On The Sidelines
Mitt Romney informs us that the raid that took out Osama bin Laden one year ago was no big deal, because “even Jimmy Carter would have given that order.”
Grrrrr.
Necessary disclosure: I worked for Jimmy Carter and admire his intentions, his character, and many of his achievements, although I am not usually considered an uncritical booster of his record as president.
But let’s remember:
1) Jimmy Carter is a graduate of the U.S. Naval Academy who spent ten years in the uniformed service of his country. As far as I can tell, this is ten years more than the cumulative service of members of the Romney clan. Obviously you don’t have to be a veteran to have judgments about military policy or criticisms of others’ views. But when it comes to casual slurs about someone else’s strength or resolve, you want to be careful, as a guy on the sidelines, sounding this way about people who have served.
2) Jimmy Carter did indeed make a gutsy go/no-go call. It turned out to be a tactical, strategic, and political disaster. You can read the blow-by-blow in Mark Bowden’s retrospective of “The Desert One Debacle.” With another helicopter, the mission to rescue U.S. diplomats then captive in Teheran might well have succeeded — and Carter is known still to believe that if the raid had succeeded, he would probably have been re-elected. Full discussion another time, but I think he’s right. (Even with the fiasco, and a miserable “stagflation” economy, the 1980 presidential race was very close until the very end.)
But here’s the main point about Carter. Deciding to go ahead with that raid was a close call. Carter’s own Secretary of State, Cyrus Vance, had opposed the raid and handed in his resignation even before the results were known. And it was a daring call — a choice in favor of a risky possible solution to a festering problem, knowing that if it went wrong there would be bad consequences all around, including for Carter himself. So if you say “even Jimmy Carter” to mean “even a wimp,” as Romney clearly did, you’re showing that you don’t know the first thing about the choice he really made.
3) Precisely because of the consequences of Carter’s failure, Obama was the more daring in making his go/no-go decision. That’s the case I argued last year, and nothing I’ve learned since then changes my view. As a college student, Obama had seen a marginally popular Democratic president come to ruin because he approved a helicopter-based secret mission into hostile Middle Eastern terrain. Obama went ahead with a helicopter-based secret mission into nominally “allied” territory, also with huge potential for trouble if things had gone wrong.
4) And while the Osama killing reflected a decade’s worth of intelligence and effort from people of both parties, and of no party, it happened on Obama’s watch. Is there any doubt that if it had happened on Bush’s, or on a President John McCain’s, it would have been the centerpiece of every political speech and commercial? Was there a single speech in the Republicans’ 2004 convention — in New York — that did not begin and end with a reference to 9/11, or the removal of Saddam Hussein?
So: obviously the Administration will want to remind voters that Osama bin Laden is gone, and obviously the Republicans will want to minimize the political significance of that fact. All fine. But not “even Jimmy Carter.” I hope that the crack was a scripted attack line, rather than being yet another spontaneous glimpse of the way Mitt Romney feels and thinks. “Even” Jimmy Carter made a daring choice, and paid the price.
By: James Fallows, The Atlantic, April 30, 2012
“Spewing Horsepucky”: Dear Republicans, Contraception Is An Economic Issue
Republicans on the Sunday talk show circuit spent a lot of time insisting that contraception isn’t a real issue for women voters, that it’s unimportant and will take a back seat to the economy. Colorado Republican Chair Ryan Call said much the same thing on a local Colorado political show Friday night when he insisted access to contraception was a “small issue.”
Horsepucky. There is no more fundamental economic issue for women than determining if and when they will have children. Fertility is destiny. The Pill was the catalyst for the sexual revolution and the full entry of women into the American workforce because, for the first time in history, women could themselves control their own reproduction. Approximately 99 percent of reproductive age American women have used birth control—and something used by almost every woman in America isn’t a small issue, it’s huge.
A March 6, 2012 blog post in the New York Times, “The Economic Impact of the Pill”, summed it up:
Those changes have had enormous impacts on the economy, studies show: increasing the number of women in the labor force, raising the number of hours that women work and giving women access to traditionally male and highly lucrative professions in fields like law and medicine.
A study by Martha J. Bailey, Brad Hershbein and Amalia R. Miller helps assign a dollar value to those tectonic shifts. For instance, they show that young women who won access to the pill in the 1960s ended up earning an 8 percent premium on their hourly wages by age 50.
Such trends have helped narrow the earnings gap between men and women. Indeed, the paper suggests that the pill accounted for 30 percent—30 percent!—of the convergence of men’s and women’s earnings from 1990 to 2000.
Republicans have also argued that when it comes to reproductive healthcare, affordability and access are two separate issues. Right, and I suppose Dick Cheney paid for his six-figure heart transplant by washing dishes in the hospital commissary. Furthermore, pregnancy prevention programs, including subsidized contraception, save taxpayers money—anywhere from $2 to $6 for every $1 spent, according to a study by a Brookings Institution scholar.
Republican strategist Alex Castellanos, a repeat winner for the Mad Men Chauvinist of the Week Award, undermined his own spin on Meet the Press when he falsely stated that women don’t earn less than men do. Some single women without children are able to close the income gap in some metropolitan areas for precisely that reason—they don’t have kids, and can replicate men’s hours at the office. Women with children often fall behind economically because they’re working a double-shift, at home and at work, and our child care system in this country is wildly inadequate.
Contraception isn’t just a big issue to women voters, it’s obviously a big issue to Republicans, despite their protest to the contrary now that it’s costing them with women voters. It’s big enough that they threatened to shut down the entire U.S. government over it last spring. It’s big enough that Republican governors like Mitch Daniels have made defunding Planned Parenthood a top priority, as has their presidential candidate Mitt Romney. Romney even wants to eliminate federal funding for Title X, which provides family planning funding for five million low-income Americans.
Which begs the question: If contraception is key to women’s economics, why are Republicans trying to keep women from getting it?
By: Laura Chapin, U. S. News and World Report, April 30, 2012
“I Could Have Done That”: All Good Ideas Belong To Mitt Romney
So says a campaign advisor, who pinned the auto bailout success on the former Massachusetts governor.
Back in 2009, when the newly elected President Barack Obama was contemplating a bailout of the auto-industry, Mitt Romney emerged from his temporary hiatus to push policymakers in the other direction. “Let Detroit go bankrupt,” he urged in an op-ed for New York Times. For Romney, a managed bankrupcy of the kind he had pioneered at Bain Capital was the only way to “save” the American auto industry. As for Obama’s approach, Romney warned that “If General Motors, Ford and Chrysler get the bailout their chief executives asked for yesterday, you can kiss the American automotive industry goodbye.” A few months later, Romney repeated his warning: If Obama continued on his path, “it would make GM the living dead.”
Three years later, Romney’s prediction hasn’t come to pass. The American auto industry is thriving even as conservatives run with the idea that government is categorically ineffective. In February, during the Republican primary in Michigan, Romney further disparaged the auto bailout, granting its success, but accusing Obama of kowtowing to “union bosses.” This message didn’t play well, and only gave Obama and Democrats an opportunity to tout the success of the bailouts, and contrast them with Romney’s position.
Now that Romney is in the general election, he has begun to shake the Etch A Sketch on a number of issues. One of those, if this comment from Romney advisor Eric Fehrnstrom is any indication, is the bailout:
“[Romney’s] position on the bailout was exactly what President Obama followed,” Fehrnstrom said. “He said, ‘If you want to save the auto industry, just don’t write them a check. That will seal their doom. What they need to do is go through a managed bankruptcy process.’”
“Consider that the crown jewel,” Fehrnstrom said. “The only economic success that President Obama has had is because he followed Mitt Romney’s advice.”
Writing at Talking Points Memo, Pema Levy points out that Romney’s position on the bailout has been hazy; he was vehemently against the administration, but in a way that gave him a way to claim credit, as Fehrnstrom does. Of course, the fact that Romney has rhetorical space to take credit for the bailout doesn’t mean that’s any less ridiculous; it’s the political equivalent of twelve-year-old boasting—“I could have done that too! If you’d picked me first.”
One last observation—this continues an odd pattern by the Romney campaign, which inhabits a frame established by the Obama campaign rather than creating something for themselves. First, there was the “War on Women,” where Romney advisors argued that it was Democrats who were fighting the real war on women, while conceding that the existence of an actual war. Then, in Romney’s speech last Tuesday, there was “fairness,” when the former Massachusetts governor argued that government was the real purveyor of unfairness in the country. And now we have the auto industry bailout, where Romney claims to have been the real mastermind behind the policy.
I’m not sure what the campaign hopes to get out of this approach. By continuously talking about Obama on Obama’s terms, they do nothing but put themselves on the defensive. It’s a bad strategy, and the only saving grace is that we’re still early in the election.
By: Jamelle Bouie, The American Prospect, April 30, 2012
“Wasting Our Minds”: A Young Mind Is A Terrible Thing To Waste
In Spain, the unemployment rate among workers under 25 is more than 50 percent. In Ireland almost a third of the young are unemployed. Here in America, youth unemployment is “only” 16.5 percent, which is still terrible — but things could be worse.
And sure enough, many politicians are doing all they can to guarantee that things will, in fact, get worse. We’ve been hearing a lot about the war on women, which is real enough. But there’s also a war on the young, which is just as real even if it’s better disguised. And it’s doing immense harm, not just to the young, but to the nation’s future.
Let’s start with some advice Mitt Romney gave to college students during an appearance last week. After denouncing President Obama’s “divisiveness,” the candidate told his audience, “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”
The first thing you notice here is, of course, the Romney touch — the distinctive lack of empathy for those who weren’t born into affluent families, who can’t rely on the Bank of Mom and Dad to finance their ambitions. But the rest of the remark is just as bad in its own way.
I mean, “get the education”? And pay for it how? Tuition at public colleges and universities has soared, in part thanks to sharp reductions in state aid. Mr. Romney isn’t proposing anything that would fix that; he is, however, a strong supporter of the Ryan budget plan, which would drastically cut federal student aid, causing roughly a million students to lose their Pell grants.
So how, exactly, are young people from cash-strapped families supposed to “get the education”? Back in March Mr. Romney had the answer: Find the college “that has a little lower price where you can get a good education.” Good luck with that. But I guess it’s divisive to point out that Mr. Romney’s prescriptions are useless for Americans who weren’t born with his advantages.
There is, however, a larger issue: even if students do manage, somehow, to “get the education,” which they do all too often by incurring a lot of debt, they’ll be graduating into an economy that doesn’t seem to want them.
You’ve probably heard lots about how workers with college degrees are faring better in this slump than those with only a high school education, which is true. But the story is far less encouraging if you focus not on middle-aged Americans with degrees but on recent graduates. Unemployment among recent graduates has soared; so has part-time work, presumably reflecting the inability of graduates to find full-time jobs. Perhaps most telling, earnings have plunged even among those graduates working full time — a sign that many have been forced to take jobs that make no use of their education.
College graduates, then, are taking it on the chin thanks to the weak economy. And research tells us that the price isn’t temporary: students who graduate into a bad economy never recover the lost ground. Instead, their earnings are depressed for life.
What the young need most of all, then, is a better job market. People like Mr. Romney claim that they have the recipe for job creation: slash taxes on corporations and the rich, slash spending on public services and the poor. But we now have plenty of evidence on how these policies actually work in a depressed economy — and they clearly destroy jobs rather than create them.
For as you look at the economic devastation in Europe, you should bear in mind that some of the countries experiencing the worst devastation have been doing everything American conservatives say we should do here. Not long ago, conservatives gushed over Ireland’s economic policies, especially its low corporate tax rate; the Heritage Foundation used to give it higher marks for “economic freedom” than any other Western nation. When things went bad, Ireland once again received lavish praise, this time for its harsh spending cuts, which were supposed to inspire confidence and lead to quick recovery.
And now, as I said, almost a third of Ireland’s young can’t find jobs.
What should we do to help America’s young? Basically, the opposite of what Mr. Romney and his friends want. We should be expanding student aid, not slashing it. And we should reverse the de facto austerity policies that are holding back the U.S. economy — the unprecedented cutbacks at the state and local level, which have been hitting education especially hard.
Yes, such a policy reversal would cost money. But refusing to spend that money is foolish and shortsighted even in purely fiscal terms. Remember, the young aren’t just America’s future; they’re the future of the tax base, too.
A mind is a terrible thing to waste; wasting the minds of a whole generation is even more terrible. Let’s stop doing it.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 29, 2012
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