Opinion

Nicholas Wapshott

Romney’s auto bailout dodge strains credulity

By Nicholas Wapshott
October 17, 2012

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

Comments
5 comments so far | RSS Comments RSS

American’s too often tend to hear what they want to hear, and since Romney is constantly changing his positions to match what the audiences want to hear, they’ll end up getting what they’re listening for.

The dangerous thing is that this flip-flopping fibber has a good chance of getting elected.

I’m afraid he’ll just rubber-stamp everything that comes through the Tea Party congress, since he doesn’t seem to have any fundamental values he’s willing to stand up for.

So if you want to know what America would look like with Romney as president, just ask the Tea Party.

Posted by LoveJoyOne | Report as abusive
 

Romney and his friends wanted the auto industry to go under so they could buy the companies cheap, then sell them to China for huge profits.
Romney just can’t get over his epic failure (and the failure of his wealthy friends) to make billions off the suffering and destruction of the American auto industry.
There is also the issue of defense products made by American automakers, and national security.

Posted by americanguy | Report as abusive
 

Hardly news…Romney’s campaign is based on not saying anything, or changing his position drastically for each and every audience that you might as well not say anything. It’s a great way to berate your opponent for ‘what he did the past four years’ without providing any prescription of your own, other than ‘I would have done it better.’

Romney was categorically against the Affordable Care Act, even though he treated it as a legislative triumph when he was governor. But when public opinion came out that many of the options were very popular, he decided he FOR those parts (so repealing it is not job #1, unless you’re his running mate). He’s apparently just for the popular parts and removing the stuff voters don’t like. Heck, I’m all for owning a new car, I just don’t like paying for them, so can I skip that part?

So, on health care, progressive-> conservative-> moderate-> pragmatist…where does the needle stop? But these position changes leave one very worrying question that nobody is asking. If Mitt’s answers are based on ‘what works now’, if elected those decisions will be made by his cabinet. And we have NO IDEA who those people will be since Mitt is a bit slow to release details. If cabinet positions were tax returns, he’d never fill them. But more than likely the choices will be limited to a mix of neo-con Washington insiders who have been sitting around since W left town. I’m not so sure that we want those folks back in the seat of power.

We can only be sure of one thing…there won’t be any women in the cabinet, even with binders full of qualified candidates.

Posted by Mike_s1 | Report as abusive
 

For all of your nuanced analysis and the whiners of destruction – scare tactics. I would rather have Romney presiding over their bankruptcy than Obama. Obama has his Detroit cronies and the Democrats are notorious for sucking the unions for money. This scare mongering of Romney is pathetic. The patch that was placed on GM is tinkering – at least I would have a man with the skills to do it in the Oval office. Why GM – why not Ford – because the simple economics of business. GM was teetering before the crisis and should have been more lean like Ford. Cronyism is a two party system. I compare this race to a union (Democrats) making a business (US) noncompetitive and fighting for benefits when the market is in the tank. This always ends badly because the reality is – if the business is not competitive it fails. But government tinkers with the reality and says you can have everything and stay in business — cause we do (US government) …academics make plans and have conversations- rarely do they have to execute anything, they just have to win the conversation. Conversations done make businesses nor do they deal with reality…you actually have to make the business work, the numbers work and make a profit. Tinkerers just tinker….

Posted by xit007 | Report as abusive
 

xit007 must really be Romney in disguise. Nothing he wrote makes sense!

Posted by mlcopines | Report as abusive
 

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