Mitt Romney stirred up a new round of liberal outrage today by stating in an interview with a local Cleveland TV station that he’ll “take a lot of credit” for the recovery of the auto industry. Romney’s point was that President Obama followed his advice in putting GM and Chrysler through bankruptcy, in order to eliminate their debt load and re-structure their benefit obligations to the UAW. But this was probably not the most politically adept thing for Romney to say given that he was not in a position in 2009 to directly impact any aspect of the auto bailout. But here’s the thing: he’s mostly right about Obama following his advice. From a December 2008 interview with Greta Van Susteren on Fox:
But let me make a couple of points in this regard. One is, we want the U.S. auto industry to survive, to grow, to thrive. Two is that if we just send money to Detroit and say, Keep playing the game the way you have, that’s not going to happen. What’ll happen is the industry will decline and decline over the years until it doesn’t exist anymore.
So what is needed is the opportunity to dramatically restructure the costs of making cars by Ford, Chrysler and General Motors. And for that to happen, you’re going to have to have either a very powerful czar of some kind who can step in and open up contracts and change the basic structure of the industry, or go through a pre-packaged, managed bankruptcy. The government is going to be part of this process either through the courts or through a super-powerful car czar, if you will. But business as usual is not the way to preserve these jobs and to build a brighter future for the many people who work in the auto industry…
If the car czar, which exists in the current bill — and I haven’t read the current bill, so I can’t be too specific in that regard. But if that car czar doesn’t have the authority to actually reduce the costs in the industry and make these companies competitive, then we will just be throwing good money after bad.
And the right thing to do here is to make sure that we do restructure these costs. That happens in bankruptcy. There are some down sides in bankruptcy, too. They could be alleviated by government participating in the process, either through a pre-packaged bankruptcy, they call it, where you agree to terms beforehand, go through bankruptcy to dot the I’s and cross the T’s. Or it could be done through a special piece of legislation, giving — giving this car czar real authority.
(Full transcript available here.)
For the record, President Obama came to the exact same conclusion four months and tens of billions of bailout dollars later. At the insistence of the White House, GM and Chrysler went through “pre-packaged” bankruptcy proceedings in June and July of 2009, shedding tens of billions of dollars of financial obligations and embarking on the road to recovery (such as it is).
Now again, I doubt Romney will gain much positive traction from trying to claim any credit for this, and certainly not “a lot of credit” as he said today. But Romney has to find a way to counter this narrative that the U.S. auto industry would be defunct if the decision has been left up to him. This is simply not the case, and even in his infamous “Let Detroit go Bankrupt” editorial in the New York Times, he made the exact same case he does above. The facts are on his side, and he should continue to push this. But maybe Romney should tweak his messaging a bit and give the President a little credit instead…for ultimately adopting a course of action he recommended months earlier.
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