On Tuesday, Mitt Romney made his latest effort at damage control on the subject of the Obama administration’s auto bailout of 2009. Romney opposed the bailout at the time, but it’s proved successful in rescuing the U.S. auto industry, and Team Obama has made the rescue a centerpiece of its campaign, with the contrast to Romney's stance clear.
“My own view, by the way, was that the auto companies needed to go thru bankruptcy before government help. And frankly that’s finally what the president did,” Romney told an interviewer Tuesday. “So I’ll take a lot of credit for the fact that this industry’s come back.”
It’s easy to scoff at that claim. After all, Romney, the son of an auto executive, famously authored an op-ed in the New York Times in late 2008 headlined: “Let Detroit Go Bankrupt.” In it, Romney argued: “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.”
So Romney's current stance, that he supported government help for the industry all along, is a tough sell.
“Is this what psychiatrist call cognitive dissonance?” Joe Scarborough asked on Wednesday’s Morning Joe.
“This is such a losing argument for him,” agreed Willie Geist. “He’s just getting twisted in knows on this.”
But it’s worth understanding exactly why Romney’s claim that the Obama administration pursued the course he was recommending is so misleading. And as luck would have it, the Morning Joe gang was joined, via phone, by Steven Rattner, the financier who ran the bailout on behalf of the administration.
“There’s just no argument in support for his position,” said Rattner. And he cogently explained why:
The fundamental difference between what Mitt Romney was saying and what President Obama did, is Mitt Romney was saying, let the companies go bankrupt, let them deal with their union contracts on their own, and then on the way out somewhere, maybe the government could provide a little financing. That was a fantasy, because … in late 2008, early 2009, there was no private financing. That’s why the government got involved in the first place, by the way, under President Bush, who certainly did not want to put money in the auto companies, but felt he had to, because otherwise what would have happened – and this is what Romney is in denial about – would have been that they would have run out of money, shut their doors, and liquidated, and there would have been no auto industry. So the process that President Obama followed was the only process that could have worked, which was a managed bankruptcy, with government help from the beginning, and using the government stick to force major concessions by the UAW, by the bondholders, by all the stakeholders.
So there you have it. It’s not hard to figure out that Romney’s playing fast and loose with the facts on this. But it’s useful nonetheless to understand exactly how and why.