(NNPA)—Three years ago, President Obama came to the rescue of Detroit’s struggling auto industry. His faith in that sector of the economy was rewarded recently when General Motors announced that it earned $7.6 billion in 2011, the largest annual income in its history. But just as was the case when Osama bin Laden was killed, President Obama gets only begrudging credit, if that.
Leading up to Tuesday’s Republican primary in Michigan, native son Mitt Romney continued his blistering assault on Obama, including the president’s decision to rescue the auto industry. But it is clear that it was Romney who wanted to drive us down the wrong road.
He wrote an op-ed in the New York Times on Nov. 19, 2008 under the headline, “Let Detroit Go Bankrupt.” Romney said, “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automobile industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.”
Instead of saying goodbye, the auto industry is again saying hello. According to the Center for Automobile Research, the federal rescue saved 1.3 million jobs at the Big Three and related businesses.
Romney, whose father served as president and chairman of American Motors Corp. and later as governor of Michigan, had a hard time justifying his support for the Wall Street bailout but not one that would benefit Main Street or Dr. Martin Luther King Boulevard.
It is part of a larger problem Romney has trying to connect with everyday people. He receives more than $20 million a year from his investments but tries to portray himself as a typical American. After offering to bet Texas Gov. Rick Perry $10,000 during one Republican debate and calling $374,000 he earned in speaking fees “not very much” money, Romney on Friday demonstrated again his gift for gaffes.
Speaking to an audience of 1,200 at Ford Field—nearly 64,000 fewer than usually populate the stadium for Detroit Lions football games—Romney said: “It feels good, being back in Michigan. You know, the trees are the right height. The streets are just right. I like the fact that most of the cars I see are Detroit-made automobiles.”
Departing from his stump speech, Romney ran into trouble with the 99 percent of Americans who don’t share his economic status when he said, “I drive a Mustang and a Chevy pickup. Ann drives a couple of Cadillacs, actually.”
Romney’s wife, Ann, keeps a Cadillac SRX luxury crossover at their Massachusetts residence and another one at their beach house in San Diego.” The cars sell from $35,485 to $54,525.Although the Cadillac SRX is designed in Detroit, it is assembled in Mexico.
How many people do you know who own homes on opposite coasts with at least one luxury vehicle parked in each garage?
Like Romney, the other three Republican candidates for president—Rick Santorum, Newt Gingrich and Ron Paul—opposed the plan to rescue Detroit. And neither Republican acknowledges that the auto rescue and Wall Street bailout were initiated by George W. Bush and continued by President Obama.
Economist Paul Krugman noted at the time how difficult it was to obtain credit when Obama assumed office.
“If the economy as a whole were in reasonably good shape and the credit markets were functioning, Chapter 11 [structured bankruptcy] would be the way to go. Under current circumstances, however, a default by GM would probably mean loss of ability to pay suppliers, which would mean liquidation—and that, in turn, would mean wiping out probably well over a million jobs at the worst possible moment.”
Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C., agreed.
He said in 2009, “Had General Motors and Chrysler been allowed to go into bankruptcy last fall, it would have quickly led to a chain of bankruptcies by a whole set of parts suppliers, all of whom are owed large amounts of money by these two companies. It is virtually certain that these companies and their suppliers would have been forced to shut down, because no one would have stepped forward to provide credit to operate through bankruptcy without a government guarantee. Because Ford shares many of these suppliers with GM and Chrysler, the disruption to the supply chain almost certainly would have been enough to push Ford over the line as well.”
GM and Chrysler received about $80 million from the Troubled Assets Relief Program, about half of which has already been repaid. Ford had a line of credit that allowed it to operate without emergency federal assistance.
In his “Let Detroit Go Bankrupt” op-ed, Romney said, “Detroit needs a turnaround, not a check.”
Largely because of President Obama, Detroit received a check that paved the way for the turnaround. Now, we need Romney and his Republican opponents to do a turnaround and stop misrepresenting the role President Obama played in saving the auto industry.
(George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com You can also follow him at www.twitter.com/currygeorge.)