W Gets it Right

February 24th, 2012 at 9:20 am

Steve Rattner’s oped in this AM’s NYT provides a useful reality check of the credit market conditions back during the auto bailout in 2009, attacking Gov Romney’s view that the government should have stayed out of the picture.

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…

Without government financing — initiated by President George W. Bush in December 2008 — the two companies would not have been able to pursue Chapter 11 reorganization. Instead they would have been forced to cease production, close their doors and lay off virtually all workers once their coffers ran dry.

Those shutdowns would have reverberated through the entire auto sector, causing innumerable suppliers almost immediately to stop operating too.

Despite the relative health of its balance sheet, even Ford would have been forced to close temporarily, because critical parts would have become unavailable. And service providers — trucking companies, restaurants and more — would have been severely affected.

More than a million jobs would have been lost, at least for a time. Michigan and the entire industrial Midwest would have been devastated.

I was particularly impressed by a recent comment from President George W. Bush about his role in providing the initial lifeline to GM and Chrysler:

“I’d do it again,” Mr. Bush said of the rescue in a recent speech. “Sometimes circumstances get in the way of philosophy.”

We need more conservatives who recognize when pragmatism should trump ideology.

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7 comments in reply to "W Gets it Right"

  1. Nylund says:

    Like many Democrats at the time, I thought very little of George W. Bush. The wars, the torture, the wiretapping, the tax cuts, politicization of the DOJ, etc. It was a stark reminder to just how wrong I was to think that the difference between Bush and Gore in 2000 wasn’t that much. I was so happy when his second term was up.

    And here I am four years later looking at the newest crop of candidates and W. has gone from being the worst president ever to looking downright reasonable and sane by comparison.


  2. Dausuul says:

    The current crop of Republican candidates makes George W. Bush look sane, reasonable, and competent. That is a scary, scary thing.


  3. Michael says:

    Yeah, but once you realize that the conservative path is ALWAYS the wrong path, you aren’t a conservative any more.

    Dubya’s stayed pretty quiet. I think he’s learned something about how much of a failure his ideology demands.


  4. Tom says:

    Keep in mind that although Romney grew up in Michigan 1) He went to an elite private school in one of the most elite suburbs in the entire US, not just Michigan 2) His working life has been spent among vulture capitalists in Boston, a group whose interaction with the industrial midwest has been entirely focused on screwing it, by extracting cash from it before pushing it into bankruptcy.


  5. EdH says:

    and Mitt knows better. The crowd he runs with would have been absolutely freaking out at the time. Cash was scarce, companies were ignoring payables, the commercial paper market was frozen. There isn’t a chance he really believes a managed bankruptcy was possible without the government loans.


  6. readerOfTeaLeaves says:

    I would love to know whether Romney truly believes it would have been smart to let the car companies fall prey to whoever could have swooped in at that time and snapped up all their valuable patents.

    Sometimes, it’s not about the current jobs.
    Sometimes, it’s not about the current inventory.
    Sometimes, it really is in large part about protecting patents. That may be one of the few things GWBush ever managed to protect.


  7. Chris says:

    This is my whole issue with the GOP nut cases they believe in governing with ideology instead of intellect, a very dangerous place to be.

    Funny that W finally came to that conclusion but it probably had something to do with the fact he would forever be remembered as the killer of the US auto industry.


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