Editore"s Note
Tilting at Windmills

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July 31, 2010

A VICTORY LAP.... When President Obama intervened last year to rescue American auto manufacturers, Republicans were apoplectic, and felt they had all the proof they needed that the White House was bent on a radical, socialistic agenda to destroy capitalism. The GOP screamed that the industry rescue wouldn't -- and couldn't -- work, and that the entire scheme would be a disaster for taxpayers and our very way of life.

A year later, the president is understandably boasting about getting the policy right, and as the Washington Post noted this morning, "many of the critics have retreated from their sharpest attacks as they watch the auto industry once again turn a profit."

With this in mind, the president used his weekly address to take a victory lap, and explain that while the industry bailout wasn't ideal, he had to make the tough call -- a decision that we now know was correct.

Recording the address at a GM plant in Detroit, Obama explained, "[I]f some folks had their way, none of this would be happening at all. This plant might not exist. There were leaders of the 'just say no' crowd in Washington who argued that standing by the auto industry would guarantee failure. One called it 'the worst investment you could possibly make.' They said we should just walk away and let these jobs go. Today, the men and women in this plant are proving these cynics wrong. Since GM and Chrysler emerged from bankruptcy, our auto industry has added 55,000 jobs -- the strongest period of job growth in more than ten years. For the first time since 2004, all three American automakers are operating at a profit. Sales have begun to rebound. And plants like this that wouldn't have existed if all of us didn't act are now operating maximum capacity. "

The president made nearly identical points in a speech to factory workers yesterday. The point wasn't subtle, but it was accurate -- if we'd listened to Republicans, the American auto industry would be left in shambles, hundreds of thousands of jobs would be lost, and the backbone of American manufacturing would have been broken. At a moment of crisis, Republicans got it wrong. Again.

MSNBC's First Read noted yesterday, "We said it at the time: As the GM bailout goes, so goes the Obama presidency. It was the bailout everyone in America could understand, and it wasn't popular.... A year later, however, the Obama administration believes it has a good story to tell."

There are worse things to base an election on -- Republicans were prepared to let the American auto industry fail at the height of the Great Recession, but President Obama rescued it instead. If the auto bailout and Obama's presidency are inextricably tied, the White House has reason to boast.

Steve Benen 10:50 AM Permalink | Trackbacks | Comments (25)

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Comments

Shouldn't we start calling it the Great Bush Recession?

Posted by: LABiker on July 31, 2010 at 11:03 AM | PERMALINK

If Mitch and his Party of NO are going to beat him up about saving the auto industry, Obama has every reason to crow. He done good.

Posted by: Ron Byers on July 31, 2010 at 11:13 AM | PERMALINK
Republicans were prepared to let the American auto industry fail at the height of the Great Recession...
You have to take the long view -- a small price to pay to drive a stake through the heart of the UAW, don't you think?

It's GOP gospel. None of us are truly free so long as any of us are covered by a collective-bargaining agreement.

Posted by: Davis X. Machina on July 31, 2010 at 11:20 AM | PERMALINK

Since their angelic leader Ronnie Reagan pronounced government the problem, every Republican elected since has been the problem with our government!

Now, in 2010, Republicans have evolved into the Party of No, using the defeatist mantra of Saint Reagan - Government is the Problem - and taking its inane logic to the highest level possible. Even a pleasant conversation, this past year, on what government ought to do to help our citizens in dire economic times is a non-starter to these problem office holding Republicans.

Important to do item: Vote the problems out of government this November! -Kevo

Posted by: kevo on July 31, 2010 at 11:22 AM | PERMALINK

I didn't see this as a tough call when Obama did it. Carter did it with Chrysler and it worked fine. I remember disagreeing with Carter and was proven wrong. This time around, it seemed like a non-brainer.

Posted by: fostert on July 31, 2010 at 11:26 AM | PERMALINK

Correction needed.

Republicans were prepared to let the American auto industry fail at the height of the Bush Recession, ...
Posted by: MikeBoyScout on July 31, 2010 at 11:28 AM | PERMALINK

We should call it the Great Bush Recession, but most voters won't care. Obama has been president for 18 months and his party will be held responsible for not fixing the economy sooner. (yes, Republicans will do much worse the next time they are in power, but history shows voters don't remember 2+ years ago).

Posted by: Shalimar on July 31, 2010 at 11:33 AM | PERMALINK

and don't forget, the "let gm die" crowd was led by senators like jeff sessions representing non-union foreign-car-factory states...another angle to the uaw...they helped build the black middle class in the north

Posted by: dj spellchecka on July 31, 2010 at 11:35 AM | PERMALINK

Good for Obama!

We have only three months until the mid-term elections. I hope enough Americans figure out before then that Republican policies caused this Bush Depression, that the Republicans have obstructed Obama's attempts to fix the Bush Depression and that Republican victories in the mid-terms will only worsen a bad situation.

Posted by: PTate in MN on July 31, 2010 at 11:37 AM | PERMALINK

"The third way"

Brilliant framing to the third power.

Posted by: koreyel on July 31, 2010 at 12:14 PM | PERMALINK

ok DNC time run an AD: REPUBLUCANS TO GM: DROP DEAD

People will not remember this in Nov... There needs to be a constant drum beat starting NOW.

MEANWHILE, ask Republicans why the US has a lower life expectancy than CUBA.

AND why life span in DC is the lowest in the nation... 68 years for men...

AND why the Bush Admin didn't do anyrhing to fix Afghanistan's 44 year average life span.

Posted by: KurtRex1453 on July 31, 2010 at 12:50 PM | PERMALINK

dj: another angle to the uaw...they helped build the black middle class in the north

Hell, they helped build the middle class, particularly as defined by the consumer mass market, period.

Posted by: cr on July 31, 2010 at 1:25 PM | PERMALINK

Business bailouts are not bad onlyy because the bailout may not work (if the government is willing to spend enough money, they can make almost any bailout work). The are also bad because for two more reasons.

1)The essential unfairness of bailing out large politically connected businesses while letting thousands and thousands of 'normal' businesses fail and their employees go into unemployment.

2) Making sure that big businesses understand they (and not the taxpayers) are responsible for their own bad decisions, and if they run their business badly, they will pay the consequences.

If Democrats want to run on the message of telling the great majority of Americans who don't work at large politically connected corporations that if their business is going under, that is just the way a market economy works; but if a big corporation which has paid out hundreds of thouseand in campaign contributions to federal candidates and millions on lobbying gets in trouble, they will race to its rescue, they certainly can. I don't think this is quite the 100% winning message that Steve and many of the commentators here seem to think.

Posted by: Counterfactual on July 31, 2010 at 2:16 PM | PERMALINK

I've never understood why the auto industry bailout was "unpopular" in the first place. Practically every garage in middle-class America has one or two SUV's in it. We couldn't get enough of what automakers were putting out.

These were fellow Americans who were going to suffer badly if the Administration allowed their industry to dry up. Did we really want to see the middle class, of which so many of us are a part, receive such a body blow?

Posted by: June on July 31, 2010 at 2:22 PM | PERMALINK

"[Obama] had to make the tough call -- a decision that we now know was correct."

TARP gave GM $87 billion, signed into law under Bush in October 2008 I thought. GM's bankruptcy reorganization happened under Obama, so maybe this was a shared exercise?

I think it's unclear and too early to pronounce it as a "correct" decision. GM lost $3O billion in 2009, and earned $1.2 billion in first quarter 2010.

GM has off-loaded a lot of its pension/healthcare liabilities to UAW (and possibly government pension insurance/guarantors). Many people think that GM has paid back the TARP money by merely reshuffling other government largesse from different categories.

Many companies could turn a "profit" if you take away chunks of their legacy liabilities and hand it masses of money under convoluted support programs... But declaring it a successful bailout is more difficult.

Is Mr. Benen's characterization of the bailout as "proven correct" based solely on the fact that GM is still around? If so, that's not policy analysis. What about some cost/benefit for the billions of government cash given, and the opportunity cost of other potential uses?

Posted by: flubber on July 31, 2010 at 2:54 PM | PERMALINK

The auto industry tends to be cyclic, and many companies that are doing well (VW and Nissan come to mind) were in deep trouble not that long ago. The failure was not only GM's and Chryslers', but also that of the banks and the financial industry. GM had a recovery plan in place, but found its credit cut off when the banks stopped lending money. Ford was fortunate in that it got into trouble a few years earlier, and was able to hock the company and raise the capital necessary to fund a recovery while the banks were still lending. When the banking industry shuts down because of its own problems, it is only reasonable for the government to step in as a lender of last resort.

Posted by: J. Frank Parnell on July 31, 2010 at 2:56 PM | PERMALINK

@cr: that too

i was citing the black middle class 'cause it's one more thing republicans would love to see wiped out

Posted by: dj spellchecka on July 31, 2010 at 3:05 PM | PERMALINK

ps...i grew up in the 50's in a blue collar suburb of cleveland ohio that wouldn't have existed without the uaw...folks with just high school diplomas could afford to get married, buy a house and have kids....i fear those days are gone for good

Posted by: dj spellchecka on July 31, 2010 at 3:14 PM | PERMALINK

These were fellow Americans who were going to suffer badly if the Administration allowed their industry to dry up. Did we really want to see the middle class, of which so many of us are a part, receive such a body blow?

As a number of Republican senators made clear at the time, they would rather have seen all the Midwest an economic wasteland if it meant destroying their blood enemies, the unions.

The corporate conservative view of the world sees unions as an evil nearly as vile and loathsome as communism, slightly more so than homosexuality and Hippies, and well above such trivial evils as the mafia, drug posses, fascism, influence peddling, etc.

Just read their speeches and, even better, listen to them to get the feel of where their passion lies.

Posted by: Midland on July 31, 2010 at 4:17 PM | PERMALINK

Is Mr. Benen's characterization of the bailout as "proven correct" based solely on the fact that GM is still around? If so, that's not policy analysis. What about some cost/benefit for the billions of government cash given, and the opportunity cost of other potential uses?

All the statistical evidence was presented when the bailout was debated, and a mountain of it was necessary to get the vote through the senate. I refer you to the sources available then for the devastation that would have been wreaked if the auto companies had folded outright. They were dying then and now they financially stable and selling automobiles.

Open heart surgery isn't judged by whether the patient is off medication and running marathons a year after. In this case the patient didn't die, is getting healthier, and the patient's dependents aren't begging for food on the streets. That's a big win.

Posted by: Midland on July 31, 2010 at 4:24 PM | PERMALINK

i grew up in the 50's in a blue collar suburb of cleveland ohio that wouldn't have existed without the uaw...folks with just high school diplomas could afford to get married, buy a house and have kids....

Really, it is amazing how many people think it is due to some natural process that American workers have eight hour days, safety rules, insurance, pensions, and houses with plumbing. In the 19th and early 20th Century blue collar workers were considered human trash only fit to live in cold-water tenements and shanty towns, and if they died of lung disease or crippled themselves shoveling iron ore or grain or getting tangled up in mill-work, it was their own fault for being too intellectually and morally inferior to start their own businesses. The Robber Barons called it "Social Darwinism" after it became unfashionable to just call it "the will of God."

The unions argued, fought, suffered deprivation, and often died to assert the working class's right to be treated like something worth more than mules and oxen. Only when most of them managed, after decades of struggle, to be recognized as part of middle class America did it become fashionable to claim that unions didn't do anything for anyone.

Posted by: Midland on July 31, 2010 at 4:35 PM | PERMALINK

Does this mean auto industry executives and lobbyist groups will stop supporting Republicans almost exclusively?

Posted by: cld on July 31, 2010 at 6:01 PM | PERMALINK

Obama may rightfully boast, but with an electorate as ignorant and gullible as ours, telling people that it would have been much worse, etc., when they are not happy with their own economic circumstances is, if not entirely pointless, of little value. You don't know how good you've had it until it gets much worse. It's too much of an intellectual jump for most people to accept that disaster was averted by, at least limited, effective government

Posted by: rrk1 on July 31, 2010 at 7:16 PM | PERMALINK

[I]f some folks had their way, none of this would be happening at all. This plant might not exist. There were leaders of the 'just say no' crowd in Washington who argued that standing by the auto industry would guarantee failure. One called it 'the worst investment you could possibly make.' They said we should just walk away and let these jobs go. Today, the men and women in this plant are proving these cynics wrong. "

Huh. So this was "some folks" and "leaders of the 'just say no' crowd in Washington" and "they" and "cynics" who all said this....

Jesus, Barack -- SAY THE WORD! It was REPUBLICANS who said all this! It was Republicans! For god's sakes, effective communication requires you to let your listeners know who the hell you're actually talking about!

Posted by: Stefan on August 1, 2010 at 12:10 AM | PERMALINK

Straight to the theory and written well, I appreciate to the post. I merely wish there have been more goodies on the net today, thanks and will God Bless

Posted by: Sue Light on February 2, 2011 at 2:05 PM | PERMALINK




 

 

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