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’s insistence in the second debate that Obama’s rescue of General Motors and Chrysler was the same as his plan was only half the story.
When Romney said “[W]hen you say that I wanted to take the auto industry bankrupt, you actually did. … That was precisely what I recommended and ultimately what happened,” 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’s surrogates blame a headline in The New York Times, “Let Detroit Go Bankrupt”, 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. “If General Motors, Ford, and Chrysler get the bailout that their chief executives asked for,” he wrote, “you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.” 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 “creative destruction” creed of Joseph Schumpeter, he expanded on his thinking in the Detroit News and derided the auto rescue as “crony capitalism,” a cozy collaboration between government and private enterprise much derided by the Koch brothers, major funders of Romney’s super PACS.
“Obama stepped in with a bailout for the auto industry,” Romney wrote. “[The] indisputable bad news is that all the defects in President Obama’s management of the American economy are evident in what he did.” Obama’s plan saved millions of jobs, not only in the auto industry, but in the parts suppliers, dealerships, and all those who service motor production – and the storekeepers, realtors, teachers, and so on, who depend upon them – and, by the way, not only in Ohio but in all the Great Lake states and way beyond. Romney’s sly suggestion now that you can’t slip a cigarette paper between his plan and Obama’s 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 – 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 ’em! Just so long as I make the sale.
When speaking to Tea Party types, Romney is against the bailout. “When 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 – we have every good reason to be alarmed,” he told a Values Voters Summit in 2009. But just a year before he had backed George W. Bush’s Trouble Asset Relief Program, hosing billions of taxpayers’ dollars into banks without anything in return. “President Bush and Hank Paulson said, ‘We’ve got to do something to show we’re not going to let the whole system go out of business,’” he said. “I think they were right.”
The problem with Romney is that even he doesn’t seem to know what he believes. Like Woody Allen’s 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’s 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’s 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, “[W]hen Governor Romney said we should let Detroit go bankrupt, I said, ‘We’re going to bet on American workers and the American auto industry’, and it’s come surging back. I want to do that in industries, not just in Detroit but all across the country.” 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’s 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