IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
— Mitt Romney, Let Detroit Go Bankrupt, New York Times, Nov. 18, 2008
The problem for Romney? That the turnaround that Detroit needed could not have occurred without that check.
The solution for Romney? Say that he was proposing a “managed bankruptcy” rather than a liquidation bankruptcy, and pretend that those two things are mutually exclusive. And—voila!—everyone’s focused on whether Romney was or was not proposing a liquidation of GM and Chrysler.
Which, of course, he was, because, well, the turnaround that Detroit needed could not have occurred without that check.
But in that op-ed, Romney said—unequivocally—that receipt of that check by the auto companies would spell the demise of the American automotive industry. He said he could virtually guarantee it.
That’s right, folks. The man who claims that his business savvy means he will, if elected president, cause the creation of 12 million new American jobs didn’t know that there was no private-sector financing available to fund a non-liquidation managed bankruptcy for these companies. And, even more important, he thought that federal funding would spell the demise of the automotive industry.
In other words, even more important than that this guy is the Houdini candidate is that, by his own accounting—by his own words in that op-ed—he economics prowess is an apparition.
Well, it isalmost Halloween.
Good thing that guarantee was only virtual.