Editore"s Note
Tilting at Windmills

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May 5, 2011

THE MOST UNDER-COVERED SUCCESS STORY OF THE OBAMA ERA.... About two years ago, NBC News established a tough benchmark: "As the GM bailout goes, so goes the Obama presidency."

With that in mind, Jonathan Cohn offers us a helpful update on where things stand.

On Thursday General Motors announced that, for the fifth consecutive quarter, it had made a profit. And not just a measly one, either. The $3.2 billion was higher than experts had predicted and more than three times the profit of the same quarter in 2010, when the company was still struggling to emerge from its bankruptcy.

GM sales in North America were up 25 percent over that period. That reflects the recovery, obviously, but the increase in GM sales was still larger than the industry average. Even if GM can't keep up that pace, it's a sign of increasing health.

Still, the most interesting part of the news is not the profit itself. It's how GM made it.

Right. After the federal intervention to rescue the automotive industry, GM shifted its focus, reducing excess capacity and developing a better lineup of fuel-efficient cars and crossover vehicles. It's proven to be quite successful.

Cohn noted that GM recovery has not been flawless, and the transition has been painful for many. He concluded, however, "[I]f not for the Obama Administration's intervention, the entire American auto industry might very well have collapsed and taken the Midwest with it. Instead, the industry is on the rebound, at least for now. That's not bad for government work. Not bad at all."

I'd just add, from a purely political perspective, that Republicans still consider this a failure. As far as the right is concerned, the Obama administration's rescue of the American automotive industry wasn't just wrong, it was one of the president's most dreadful mistakes. Confront conservatives with reports like the latest from GM, and the response tends to be that the success of the policy doesn't change anything.

The thesis about the right valuing ideology over practical results needs no better example.

Steve Benen 11:30 AM Permalink | Trackbacks | Comments (20)

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Oh Steve...a 'win' for Obama? Nah....let's just move on...you KNOW he's destroying the country!

Posted by: SYSPROG on May 5, 2011 at 11:38 AM | PERMALINK

Now, if Management can just bust them Unions, and move the whole she-bang down South. . .

Posted by: DAY on May 5, 2011 at 11:39 AM | PERMALINK

One thing Steve it's more about being against anything Obama does then whether it's successfull or not. If the economy rebounded in the next 6 months to historic highs the republicans would not give any credit to Obama. As you see what happened with the Bin Laden deal. They want to water down the success Obama garnered by trying to give Bush credit for it.

Posted by: Gandalf on May 5, 2011 at 11:42 AM | PERMALINK

NO, not ideology over practical results. UAW tends to support Democrats, so they must be destroyed. And the resultant cratering economy could be pinned onto Obama, so they'd have a chance at the presidency again. Not to worry about upper management, they take care of their own...

OK, may this is ideology, just not the one you were thinking about...

Posted by: golack on May 5, 2011 at 11:44 AM | PERMALINK

Jeez, he saved the US auto industry AND killed Osama bin Laden?

Imagine if he was white and a Republican?

Oh my, imagine if Bush had done this?

They'd be demolishing Lincoln's Memorial to make way for his.

Or, as wrote earlier, have taken off that Socialist Deist Jefferson from Mt. Rushmore to make way for Little Boots' petulant puss.

Posted by: c u n d gulag on May 5, 2011 at 11:44 AM | PERMALINK

Squeaky wheel gets the grease. Gotta toot that horn!

I'm pretty sure it will figure prominently in the upcoming campaign, but I wouldn't count on the MSM doing his work for him.

Posted by: bdop4 on May 5, 2011 at 11:51 AM | PERMALINK

All the people who lost their jobs at GM would have found new opportunities , because of American exceptionalism , that would have popped up with tangerine trees and marmalade skies , newspaper taxis appear on the shore, waiting to take you away climb in the back with your family bankrupt , and your gone ...
Or something almost exactly like that , from my brother in law last summer .

Posted by: FRP on May 5, 2011 at 11:59 AM | PERMALINK

And contrast the almost total black out of the corporate/repiglican media of this success by Obama with what would have happened if Bush had accomplished the same thing .......

Posted by: stormskies on May 5, 2011 at 12:09 PM | PERMALINK

Obama is turning in to the "get 'er done" president isn't he. He just keeps doing great things. Too bad the press is too busy to notice. (I was about to say something crude about the press sucking something, but that would be soooo Dick Cheney of me.)

Posted by: Ron Byers on May 5, 2011 at 12:11 PM | PERMALINK

the Republicans consider it a failure because it was a success of a black President. That's how they roll.

Posted by: T2 on May 5, 2011 at 12:15 PM | PERMALINK

I've been pointing to the success GM bailout and the sluggishness of the British economy once it went into 'cut government expenditures' mode to a friend of mine who a U of Chicago economics PhD formerly affiliated with the American Enterprise Institute.

His response at one point was, "Obama just doesn't understand economics."

To which I resopnded, "As Ronald Reagan used to say, 'Economists are people who wonder if what happens in the real world can happen in theory."

Fun, fun, fun.

Posted by: Rod Hoffman on May 5, 2011 at 12:29 PM | PERMALINK

I'm just wondering if the "profits" GM reported are the same "profits" they reported last time, when they counted government loans as "profit".

Posted by: Mr R on May 5, 2011 at 1:05 PM | PERMALINK

My favorite nonsensical right wing talking point on the auto industry bailout is how Republicans point to Ford's recovery as "evidence" that government intervention failed, since Ford didn't directly take money. In the real world, Ford management has been clear that the company wouldn't have survived had GM and Chrysler collapsed, since it would have taken out most of the suppliers.

Posted by: Andrew on May 5, 2011 at 1:12 PM | PERMALINK

"If the economy rebounded in the next 6 months to historic highs the republicans would not give any credit to Obama."

Of course not silly. It would be because the Republicans now have a majority in the House, which has accomplished absolutely nothing since January except a few symbolic votes for legislation that has no chance of passing in the Senate.

I guess it is just the perception that are FINALLY in charge that makes things so rosey!

Posted by: Vandal on May 5, 2011 at 1:39 PM | PERMALINK

It's a non-story because nobody in the mid or upper echelons in the MSM drive American cars anyway. Remember the howling panic when Toyotas seemed to killing their drivers?

Posted by: Steve P on May 5, 2011 at 1:59 PM | PERMALINK

If the economy were to recover in the next 6 months, all the credit would go to John McCain for suspending his Presidential campaign.

Posted by: Andrew on May 5, 2011 at 2:30 PM | PERMALINK

The difference between dogma and science is that with dogma, you have to somehow twist and distort facts to fit the theory. With science, when the facts don't fit the theory, you find out why and change the theory to fit the facts. You see this with the creationists/ID vs. evolutionists, with deniers vs. climatologists, with flat earthers vs. round earthers, and now with republicans vs. GM. It's what Zen and the Art of Motorcycle Maintenance called the conflict between the romantics and the classicists. For a true believer nothing will shake his faith in his dogma, not even God rubbing his face in reality.

Posted by: Texas Aggie on May 5, 2011 at 2:42 PM | PERMALINK

Having grown up just outside of Pittsburgh in the 50-60s and witnessing the demise of the steel industry, I've never been able to buy anything but an American car, new or used.

Over the years, I've gotten a fair amount of grief from people who couldn't tell a camshaft from a crankshaft, yet felt fully qualified to consider me a fool. Truth was, I knew exactly what I was doing -- I may have been fighting a losing battle, but I was trying to keep a fellow American employed in the only way I knew how, with my pocketbook.

In the end, the purchasing decisions we make have consequences.

When I finished college, I had every intention to go back home, but there were no appropriate jobs. My friends with college degrees were driving taxis and delivering pizzas, and so I settled elsewhere. Now, some three-plus decades later, I still miss my family and friends and the years we might have spent together.

Today, it's difficult if not impossible to "buy American," but to the extent that my purchase keeps a fellow American employed, I still feel obligated to do so. I've owned Ford, GM and Chrysler products, and with proper maintenance, every one has exceeded 100,000 miles.

Presently, we're thinking about replacing our 15 year-old, 140,000 mile Plymouth minivan, even though the only thing wrong with it is that the AC has failed and the gas mileage is less than we'd like.

Since we bought that minivan in 1996, our family needs have changed, but we're once again looking at American brands. The Chevy Volt, a couple Buicks and particularly the new Ford Focus hatchback are all in play.

I'd encourage anyone considering a new car purhase to consider buying American. The job you save may be you neighbor's.

Posted by: beep52 on May 5, 2011 at 4:59 PM | PERMALINK

Maybe it's time to wheel out Eminem again?

Surely GM can make some more ads crediting its bail-out? That last one, premiering at the Superbowl, was really good, in spite of the fact that the lyrics made no sense.

Posted by: zandru on May 5, 2011 at 6:45 PM | PERMALINK

I urge those of you who believe in the GM success story to buy stock in GM. It's a sure thing! No matter that its recent profits are almost entirely due to the devastation wrecked on the Japanese car industry by the tsunami; no matter that no one is buying the Volt; no matter that the stock is still trading below its IPO price. Go ahead, put your money where your mouth is and buy, buy, buy.

Posted by: DBL2 on May 6, 2011 at 2:02 AM | PERMALINK
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