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On November 18, 2008, the 2012 GOP presidential nominee, Mitt Romney, authored an op-ed appearing in the NY Times entitled "Let Detroit Go Bankrupt." G.W. Bush was still president
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. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
On Dec. 19, 2008, ABC News reported....
The (Bush) White House has come to the rescue of beleaguered General Motors and Chrysler by providing them with $17.4 billion in low-interest loans, ABC News has learned.
If not for Bush's government loans to automakers at the close of his term and the subsequent government-aided restructuring during the first months of Obama's presidency, what would have happened?
“The companies would have shut down and the bondholders would have been wiped out,” said Mark Zandi, chief economist at Moody’s Analytics. “Nearly all analysts at the time felt at the time that without government bailout — GM and Chrysler would have been liquidated.”
April 29, 2009....opining on President Obama's government-led restructuring of the automakers, Romney writes in the National Review Online....
What is proposed is even worse than bankruptcy–it would make GM the living dead.
USA Today, Jul 3, 2012...
General Motors just reported that its June sales rose a healthy 16% over the same last month last year, the company’s highest sales since September 2008.
Who knew the "living dead" could show such robust signs of life, huh?
What Romney left out of the equation.....
Companies that are broke require money to keep operating, even while under the protection of a Bankruptcy Court. And as Ford's chief executive, (Ford CEO!) Alan Mulally, pointed out during a visit with The Times' editorial board Tuesday, "There was nobody that was going to give them money for [debtor-in-possession] financing."
"We believed [seeking the bailout] was the right thing for the industry, the right thing for the United States of America.... I'd do the same thing today."
Convenient omissions of facts is a problem for Romney. Romney stated that automakers should go through normal bankruptcy proceedings....but there was nothing normal about the last quarter of 2008 through the first 6 months of 2009. That was when the bankster-caused financial collapse did the most damage. No one was lending, remember? Credit was frozen, remember?
So, what Romney argued for was an impossibility. Following Romney's "leadership" in late 2008, early 2009, would have led to the disappearance of both GM and Chrysler....taking 1 million jobs along with them. Romney was willing to risk that happening. Is that the leadership America needs in 2013?
Or is this the leadership America needs in 2013?.....Etch-a-Sketch Romney, May 8, 2012....
"I pushed the idea of a managed bankruptcy," Romney said. "And finally, when that was done, and help was given, the companies got back on their feet. So I'll take a lot of credit for the fact that this industry's come back."
"Let Detroit Go Bankrupt", if carmakers got a government check in 2008, "you can kiss the American automotive industry goodbye", Obama's plan would make GM "the living dead,".....all the way to "I pushed for managed bankruptcy (the Obama plan).....so I'll take a lot of credit for the....comeback."
Finally....when not shaking his Etch-a-Sketch on the auto industry bailout issue, Mitt Romney claims that the government should have provided government-loan guarantees to private sector banksters who were lining up to help GM and Chrysler, you know, or not...
But the idea of government-loan guarantees — as opposed to direct government loans — presupposes that financing was available in the private credit markets, something that seems far-fetched given that the only institutions capable of providing such financing were the largest banks in the country, which themselves were in crisis, and reliant on government aid. That’s why the chief executives of the auto companies — who undoubtedly would have preferred private financing — lobbied Congress for federal help in the first place.
If Washington would have followed Mitt Romney's advice in 2008......General Motors and Chrysler would be relics of a former America. If federal leaders, including a Republican and Democratic president, would have looked to the former Massachusetts governor for guidance in 2008, 2009......(at least) one million American workers would be out of jobs today with the human-misery ripple effects of foreclosures and loss of health care that would certainly follow.
Romney is wrong for auto makers and autoworkers......wrong for America.