Granholm Speech At Democratic
National Convention Airbrushes Auto Bailout
(Huffington Post, 6 September 2012)
Michigan
Gov. Jennifer Granholm delivered a rousing defense of the auto industry bailout
Thursday night, totaling up the number of well-paying jobs that were saved by
the controversial decision. President Barack Obama, in the spring of 2009,
approved an $85 billion package that is widely credited with bringing about a
subsequent turnaround. Obama has been
hammered for the decision, so he deserves credit for it now that it's gone
well. But Granholm left out a significant
element of the story. During the time between
Obama's election and inauguration, he worked closely with President George W.
Bush to save the industry.
In 2008, Bush announced $17.4 billion in loans to the
automakers. Had he not done so, it's unlikely the industry would have made it
to Jan. 20th. "There's too
great a risk that bankruptcy now would lead to a disorderly liquidation of
American auto companies," Bush said at the time, justifying the
bailout. Giving Bush credit wouldn't
have taken away from Obama's accomplishment, and even makes Romney's rejection
of the intervention look that much more out of step. But that's not the story
Granholm told. "The entire auto
industry, and the lives of over one million hard-working Americans, teetered on
the edge of collapse; and with it, the whole manufacturing sector," Granholm
said. "We looked everywhere for help. Almost nobody had the guts to help
us -– not the banks, not the private investors and not Bain capital. Then, in
2009, the cavalry arrived: our new president, Barack Obama."
Romney's own
stance on the bailout will likely hurt him in Midwestern states. Suggesting the
troubled automakers go into bankruptcy without government intervention, Romney
wrote an op-ed for The New York Times under the headline "Let Detroit Go
Bankrupt." Democrats have assailed
Romney for that position throughout the convention, with speakers like United
Auto Workers President Bob King, AFL-CIO President Richard Trumka and Granholm
herself reminding viewers that Romney opposed the bailout. Like Granholm, King
also made a point of reciting the "Let Detroit Go Bankrupt" line.
None of
those Democratic speakers, however, mentioned that the auto rescue in fact
began under Bush.
Obama's DNC Speech Exaggerates Auto
Bailout Benefits
(By Nate C. Hindman, The Huffington Post, 10 September 2012)
In his
formal acceptance of the Democratic presidential nomination last night,
President Barack Obama celebrated his administration’s efforts to get the U.S.
auto industry “back on top of the world," echoing remarks he made in a
campaign stop earlier this month. “The
American auto industry has come roaring back,” Obama said then, nearly five
years after the onset of an economic downturn that threatened to sink the
nation’s largest carmakers. But there’s
one small problem with those assertions. The
federal government's $80 billion bailout of General Motors and Chrysler,
started under President George W. Bush and continued under Obama, hasn’t
returned the sector to the top of the world. And that supposed roaring has
fallen on deaf ears among taxpayers who are still owed billions by the car companies
and autoworkers who are still out of a job.
GM, the
country's largest carmaker and the recipient of $50 billion in government
funds, has slipped to No. 2 and is headed for third place in global sales this
year, behind Toyota and Volkswagen. And despite last year being the most
profitable year in GM’s 103-year history, the automaker still owes taxpayers a
whopping $25 billion. Chrysler, for its part, has repaid most of its federal
loans. Employment in the auto industry
remains 12 percent below what it was before the recession started in December
2007, the Washington Post recently noted. In contrast, overall private
employment is only four percent below what it was before the recession began.
To be sure,
U.S. auto jobs and sales have seen a resurgence, and economists agree that a
bailout was vital to keep the industry afloat. “Without financial help from the
federal government, all three vehicle producers and many of their suppliers
might have had to liquidate many operations, with devastating effects on the
broader economy,” economists Mark Zandi, of Moody’s Analytics, and Alan
Blinder, of Princeton University, wrote in a report cited by Bloomberg. A majority of Americans also view the federal
bailout of the auto industry as helpful to the U.S. economy, according to polls
by the Pew Research Center and Quinnipiac University. But to tout the auto industry’s comeback
alongside less controversial accomplishments, like the killing of Osama Bin
Laden -- as Obama’s campaign has done with its “Bin Laden is dead and GM is
alive” slogan -- may be a stretch.
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