Is Mitt Romney flip-flopping on the auto industry bailout?
Mitt Romney opposes the government bailout of the auto industry now. But in 2008, Mitt Romney supported the bailout. 'Why the switch?' ask some in Michigan.
Mitt Romney and the auto bailout have a complicated history.
Mitt Romney’s dad was the governor of Michigan. Mitt won the Michigan primary in 2008 talking about how helping the auto industry would be one of his most important themes in his first 100 days in office.
Then Mitt wrote a New York Times op-ed titled “Let Detroit Go Bankrupt” during discussions around the auto bailout, begun by President Bush with a $15 billion injection and continued by President Obama with a $55 billion cash infusion.
On Tuesday, Romney wrote another op-ed, this time in the Detroit News, sticking by his commitment in the previous New York Times op-ed and writing that the Obama administration used the bailout as a way to help its “cronies” in the labor movement.
Back in 2008, however, Romney was singing a different tune when he campaigned for the state’s Republican presidential primary.
Let’s set the stage: Arizona Sen. John McCain, leading Romney in the polls in Romney’s home state at the time, says “the jobs that are leaving the state of Michigan have left and are not coming back. We’re going to try to create new jobs.”
This gives Team Romney some serious ammunition: They won’t quit on the auto industry and Michigan.
So, who did Romney point to as the culprit for Detroit’s malaise? Yes, he frequently knocks unions. But there’s another villain in this story: the federal government not doing enough to help the auto industry. A January 13, 2008 piece in The New York Times - published two days before the Michigan primary - reads:
”The question is, where is Washington?” Mr. Romney said, speaking to a gaggle of reporters across from a General Motors transmission plant near Ypsilanti, where 200 layoffs were announced this week. ”Where does it stop? Is there a point at which someone says ‘enough’? Or are we going to allow the entire domestic automotive manufacturing industry to disappear?”
Mr. Romney criticized the energy bill signed into law last month by President Bush that requires cars and trucks sold in the United States to achieve a fleet average of 35 miles per gallon by 2020. Substantial majorities in both parties in both houses of Congress approved the measure. Mr. McCain voted for it.
Mr. Romney said he opposed the new mileage standard, describing it as an anvil tossed to Detroit by a government that did not understand the auto industry or care about its workers. ”As president, I will not rest as Detroit gets to see layoff after layoff after layoff,” he said.
What are Romney’s proposed solutions? How will he fix the pensions and healthcare liabilities at auto companies which he says add $2,000 to the cost of every car? The New York Times summarizes thus:
Mr. Romney proposed increased government spending for research on advanced fuels and vehicles, aid to automakers to deal with the costs of health care and pensions for retirees, and tax cuts for most taxpayers to help them buy new cars.
“Where’s Washington” and its aid is not just a far cry from “Let Detroit Go Bankrupt,” the title of his New York Times op-ed. It’s diametrically opposed.
But let’s forget about the past for a second, shall we. What does Romney hope to accomplish today? Perhaps the most painfully egregious part of Romney’s 2012 piece is what the former head of Bain Capital proposes should happen to the government’s investment in GM:
The Obama administration needs to act now to divest itself of its ownership position in GM.
The shares need to be sold in a responsible fashion and the proceeds turned over to the nation’s taxpayers.
This, America, is ignorant of the current reality around the US government’s stake in GM. The reason the Obama administration hasn’t sold its investment (currently 32 percent of the company’s shares) in GM is simple: It would be taking an $25.5 billion loss for the American taxpayer.
American taxpayers already recouped some of their investment during GM’s IPO in 2011. Yet the stock, currently trading at roughly $25, needs to hit $51 for American taxpayers to break even on the $25.5 billion balance still outstanding from the government’s initial investment. What Mitt Romney is proposing is a guaranteed loss for the American taxpayer on their investment in GM.
Why would Romney propose such a thing? Your answers are welcome on this one.
"Romney talks about why we should let the auto industry go bankrupt. Although he lays out some very sound reasons for this — including an anecdotal story of when his father, George, took over American Motors — at the end of the day he fails to mention the most important thing. Us.
He forgot about the people back home who depended on the auto industry to put food on the table, pay mortgages, send the kids to college. He greeted us like family when he needed our votes, but when he left town he treated us like strangers.
If Romney didn’t think a bailout was the best way to help the state, he should have said that when he came here looking for delegates and let the people at his rallies decide if they agreed with him. Instead he pandered, then kicked dirt in our faces on his way out the door — an all too familiar pattern with Romney.
The reason [former Pennsylvania Senator Rick, currently leading in Michigan polls,] Santorum is gaining votes in Michigan isn’t because he’s so liked here, though his social conservative rhetoric plays well in the western side of the state. But it’s because we’ve been burned by Romney before. He tells the people in front of him what they want to hear. But when he sets his sights on a new shiny object, he changes the script to fit his new needs."
In article after article from 2008, Mitt Romney uses some variation of this line:
But it means we’re going to have to change Washington. We’re going to go from politicians who say they are ‘aware’ of Michigan’s problems to a president who will do something about them.
None other than President Bush appears to agree with the 2008 Mitt Romney, the “where is Washington?” Mitt Romney, saying recently of the auto bailouts:
“I didn’t want there to be 21 percent unemployment. Sometimes circumstances get in the way of philosophy.
“I said, ‘No depression.’”
The 2012 Mitt Romney? Well, that’s a different story.
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