Romney’s auto bailout dodge strains credulity
There is the truth. Then there is the whole truth. Mitt Romney is still lagging behind the president in Ohio, the weather-vane state that has voted for every president since Abraham Lincoln and where Barack Obama is credited with saving millions of jobs in the auto industry. But the governor‚Äôs insistence in the second debate that Obama‚Äôs rescue of General Motors and Chrysler was the same as his plan was only half the story.
When Romney said ‚Äú[W]hen you say that I wanted to take the auto industry bankrupt, you actually did. ‚Ä¶ That was precisely what I recommended and ultimately what happened,‚ÄĚ he was leading voters to believe there was little difference between restructuring by the federal government car czar Steve Rattner and his own prescription: to let the firms go bust, let the markets clear, then reassemble the broken parts.
Romney‚Äôs surrogates blame a headline in The New York Times, ‚ÄúLet Detroit Go Bankrupt‚ÄĚ, over an op-ed by Romney in October 2008 for fueling confusion over where their candidate really stands. The opening lines appear to contradict their version. ‚ÄúIf General Motors, Ford, and Chrysler get the bailout that their chief executives asked for,‚ÄĚ he wrote, ‚Äúyou can kiss the American automotive industry goodbye. It won‚Äôt go overnight, but its demise will be virtually guaranteed.‚ÄĚ He went on to argue for a managed bankruptcy, but was vague about the role federal officials should play.
In February, in the heat of the GOP primaries, when Romney needed to appease those who believe the ‚Äúcreative destruction‚ÄĚ creed of Joseph Schumpeter, he expanded on his thinking in the Detroit News and derided the auto rescue as ‚Äúcrony capitalism,‚ÄĚ a cozy collaboration between government and private enterprise much derided by the Koch brothers, major funders of Romney‚Äôs super PACS.
‚ÄúObama stepped in with a bailout for the auto industry,‚ÄĚ Romney wrote. ‚Äú[The] indisputable bad news is that all the defects in President Obama‚Äôs management of the American economy are evident in what he did.‚ÄĚ Obama‚Äôs plan saved millions of jobs, not only in the auto industry, but in the parts suppliers, dealerships, and all those who service motor production ‚Äď and the storekeepers, realtors, teachers, and so on, who depend upon them ‚Äď and, by the way, not only in Ohio but in all the Great Lake states and way beyond. Romney‚Äôs sly suggestion now that you can‚Äôt slip a cigarette paper between his plan and Obama‚Äôs is, to put it politely, far-fetched.
Romney likes to have it both ways with the bank bailout, too. When it comes to perhaps the core issue in this election, the role government should play in promoting growth ‚Äď in brief, to intervene or let the market find its own level; Keynes v. Hayek, if you will — he is like a Hong Kong tailor. You want wide lapels or narrow? Want a vent or a flap? Buttons or a zipper? Turn-ups? You got ‚Äôem! Just so long as I make the sale.
When speaking to Tea Party types, Romney is against the bailout. ‚ÄúWhen government is trying to take over health care, buying car companies, bailing out banks, and giving half the White House staff the title of czar ‚Äď we have every good reason to be alarmed,‚ÄĚ he told a Values Voters Summit in 2009. But just a year before he had backed George W. Bush‚Äôs ¬†Trouble Asset Relief Program, hosing billions of taxpayers‚Äô dollars into banks without anything in return. ‚ÄúPresident Bush and Hank Paulson said, ‚ÄėWe‚Äôve got to do something to show we‚Äôre not going to let the whole system go out of business,‚Äô‚ÄĚ he said. ‚ÄúI think they were right.‚ÄĚ
The problem with Romney is that even he doesn‚Äôt seem to know what he believes. Like Woody Allen‚Äôs Zelig, when he is with conservatives he is a conservative. When appealing to the middle ground he is a moderate. In the company of dogmatists who obey the diktats of long-dead theoreticians like Ayn Rand, Ludwig von Mises, Friedrich Hayek, Joseph Schumpeter, and the rest, he is an ideologue. In TV debates he is a pragmatist.
The nation faces a clear choice: whether to use the spending, borrowing, and lending powers of the federal government to end the lingering malaise that blights the languishing economy–or to wind down the pensions, health care, and drug benefits for the elderly, universal health care, and safety net for the needy and use the money to reduce taxes.
After five of the most tumultuous years in America‚Äôs economic history and after some of the most vituperative political debate ever to divide the nation, it is hard to understand voters who still cannot make up their mind. But Romney‚Äôs pushmi-pullyu impersonation, facing this way one day and that way the next, is beyond belief.
Obama is clear. As he said in the second debate, ‚Äú[W]hen Governor Romney said we should let Detroit go bankrupt, I said, ‚ÄėWe‚Äôre going to bet on American workers and the American auto industry‚Äô, and it‚Äôs come surging back. I want to do that in industries, not just in Detroit but all across the country.‚ÄĚ The fact that Romney cannot without obfuscation state his position on the central issue facing the nation is troubling, not least to conservatives who intend to vote for him.
Nicholas Wapshott‚Äôs Keynes Hayek: The Clash That Defined Modern Economics has just been published in paperback by W. W. Norton. To read extracts click here.
PHOTO: U.S. President Barack Obama (R) listens as Republican presidential nominee Mitt Romney answers a question during the second presidential debate in Hempstead, New York, October 16, 2012. REUTERS/Lucas Jackson