Mitt Romney told Detroit business leaders today, “I love American cars, long may they rule the world.” That love, however, did not stop him from jumping over to the wrong side of history when he predicted that President Obama’s rescue of the auto industry would mean we could “kiss the” now-recovering auto industry “goodbye.” And he’s not there alone. While Romney wanted to “let Detroit go bankrupt,” Rick Santorum said he would have preferred to see an auto industry “meltdown.” Last month on C-Span, Santorum said:
“I called for a structured bankruptcy from the very beginning. Look, I opposed the Wall Street bailout, which of course was the funding source for the auto bailout. I was the only one up on that stage—between myself, Gingrich, and Romney—that did on principle oppose it, even though people were saying there could be a financial meltdown. The bottom line is, the greater meltdown over the long term for this country is having the government inject itself into the private sector in such a huge way. Allow the capitalist system to work, and that’s what I believe in.”
If President Obama had listened to Romney or Santorum, the country would have seen the exact industry meltdown that Santorum advertised. Here’s a brief picture of what that would have looked like:
The American auto industry would have been forced to shed the 1.4 million jobs that the rescue saved.
The auto industry would never have been set on a path to create more than 167,000 jobs over the next four years.
Despite all these facts, both Romney and Santorum still insist that a “managed” or “structured” bankruptcy would have produced a stronger auto industry than the President’s intervention did.
However, as economists from both parties note, such a bankruptcy would never have been possible without direct funding from the government. After all, “Wall Street and private equity firms in early 2009 were in no position to lend the kind of money that the companies needed to manage the bankruptcy process in an orderly fashion.” Even Michigan’s own Republican Gov. Rick Snyder warned the GOP candidates of what the country would have faced without the rescue: “This was a unique case. It wasn’t just one or two companies at risk, but the entire national supply chain. Losing that would have had a devastating impact on the economy,” he said.
Whether it’s Romney’s “bankruptcy” or Santorum’s “meltdown,” neither of these candidates have the best interests of the American auto industry at heart.