Mitt Romney was for President Obama’s rescue of the auto companies before he was against it. Or maybe he has always been against it. Like so much else about Romney, it’s impossible to tell from his myriad, often contradictory statements. Back in November 2008, he wrote a New York Times Op-Ed piece that was headlined, “Let Detroit Go Bankrupt,” an apparent suggestion that Washington should have kept its hands off of Detroit. Except if you read the piece, its half-dozen main points were eerily similar to the plan that President Obama’s Auto Task Force ultimately designed. Eliminate the Detroit companies’ cost differential with the foreign “transplants” operating in the south. Change management. Cut pay and get rid of perks like private airplanes. Focus on the long-term. Arrange for “managed” bankruptcies with government guarantees for post-bankruptcy financing and warranty protection.
To be sure, certain details ended up being constructed differently from the Romney straw man. Instead of government guarantees, the Auto Task Force recommended direct loans and equity purchases, particularly because General Motors could not have survived if all the government support was through loans. The Auto Task Force’s mandate did not extend to areas such as increasing Federal spending on basic research. But otherwise, the two plans tracked closely.
But the moment that President Obama unveiled his plan, Romney denounced it, using words like “tragic” and “a very sad circumstance.” More recently, his spokesman, Eric Fehrnstrom, tried the Romneyesque approach of arguing both sides of the question at the same time. “Mitt Romney had the idea first,” Fehrnstrom argued, pivoting quickly to accuse President Obama of “propping up” the auto companies.
Then he went on to say (according to The New York Times): “Mitt Romney argued that instead of a bailout, we should let the car companies go through a restructuring under the bankruptcy laws.” Isn’t that exactly what President Obama did? Apparently, Romney would bridge the seeming contradiction by arguing that General Motors and Chrysler would have gone through their “managed” bankruptcies without any interim support from Washington (although with the aforementioned loan guarantees upon exit). That, at least, doesn’t reflect flip flopping on Romney’s part; it reflects pure ignorance. By late 2008 the two companies were flat broke and absent government support by Presidents Bush and Obama, would have closed their doors and liquidated, costing the industrial Midwest one or two million jobs. If that’s the Romney plan, it’s a good thing that neither President bit.