Temporarily taking over dysfunctional, yet critical industries (or even entire industrial sectors) and improving their efficiency and bottom lines.
The other day Mitt Romney repeated his opposition to the restructuring of GM and Chrysler using public money.. As many have remarked, including former Washington Monthly super blogger, Steve Benen, this would almost sound sensible except for the fact that—hello!—there was a monster financial crisis in 2008 and 2009. The entire international credit system was frozen—there was no private capital interested and available for such a massive project. If Bush and Obama had followed Romney’s advice, we might have had a bonfire of the liquidators and stuffed the 10 cents on the dollar cars with five cent on the dollar books from Borders. It’s almost painful to also observe, as Benen does, that Romney’s analysis is transparently given in bad faith, so as to somehow mete out the pathological criticism of Obama that the party base requires even when his policies have succeeded.
But it’s even worse than that (isn’t always with Romney?). If you actually know the history of similar interventions in American history (including the Chrysler bailout of just thirty years earlier) as spelled out in this great Phillip Longman essay in this magazine from 2009 it turns out that the federal government has regularly salvaged companies vital to the nation’s economic ecology—and done so with great success.
Indeed, progressive fascist Woodrow Wilson even nationalized the entire national rail system during World War I, at a time when rail was, arguably, even more significant to the American economy (because it controlled almost all interstate commercial transportation) then the automobile is today. And Secretary of the Treasury, Williams Gibbs McAdoo, was appointed Director General of the nation’s railroads, which was like having the power of the God of Thunder, Mighty Thor, compared to the mere “Czars” and their little fiefdoms that pollute the Obama administration.
And McAdoo improved the efficiency of the railroad industry. Then, after the Armistice, Wilson turned around and gave to Congress the task of reconverting the railroads to private ownership, which was completed in just 18 months.
And years later, Mitt Romney was still permitted to pay under 14% of his income in federal taxes—and, thus, the natural order was restored.
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