Steven Rattner, the lead adviser on the Obama administration’s auto task force in 2009, has an op-ed titled “Delusions About the Detroit Bailout” in today’s New York Times. Some highlights:
As a presidential aspirant, Mr. Romney evidently hasn’t felt a need to be consistent or specific as to what should have been done to address the collapse of the auto industry starting in late 2008. But the gist is that the government should have stayed on the sidelines and allowed the companies to go through what he calls “managed bankruptcies,” financed by private capital.
That sounds like a wonderfully sensible approach — except that it’s utter fantasy. In late 2008 and early 2009, when G.M. and Chrysler had exhausted their liquidity, every scrap of private capital had fled to the sidelines.
I know this because the administration’s auto task force, for which I was the lead adviser, spoke diligently to all conceivable providers of funds, and not one had the slightest interest in financing those companies on any terms. If Mr. Romney disagrees, he should come forward with specific names of willing investors in place of empty rhetoric. I predict that he won’t be able to, because there aren’t any.
Rattner then says that without government financing, the two companies would have been unable to undergo Chapter 11 reorganization, and instead would have been forced to cease production and liquidate. He then addresses the claim that Obama improperly rigged the reorganization to favor the UAW:
Among Mr. Romney’s grievances — and to be fair, those of other opponents of the auto rescue — is that the auto task force trampled on bankruptcy precedents and even the law to effect President Obama’s plan of “shared sacrifice” by all stakeholders.
What he conveniently ignores is that the president’s plan was litigated throughout the federal court system — all the way to the Supreme Court, in the case of Chrysler — without so much as a nod to the opponents from a single judge.
“[E]very stakeholder received more from our plan than if the companies had been left to go bankrupt on their own,” Rattner says.
My question is: Why has Romney gotten away for so long without being asked during say, one of the 20 debates, who, exactly, would have provided the private funding that he claims was available. And, if he can’t answer that question, why does he keep making the claim?
Apart from the obvious—that Romney habitually simply fabricates statements of fact to support his ideology and his political ambitions—this particular fabrication seems to me to get to the very heart of the supposed raison d’être for his candidacy: his business and economics acumen. He either was dangerously mistaken about the availability of private funding for the restructurings or, as president, he would just make up evidence on which to base critical decisions—with results as dramatically different than he predicts at the outset as the auto company bankruptcies would have been had Bush and Obama actually followed his advice as he now claims they did.
Why has this not occurred to anyone until now? Anyone who matters, anyway.