Dick Polman has a thoughtful column in a recent edition ofÂ the Philadephia Inquirer about all the grief President Obama and President George W. Bush got for the TARP and Automobile Industry bailouts.Â And a little more than two years later, the bailout of the auto industry is nothing short of a huge success that saved a critical industry that supports tens of thousands of middle class workers and tens of thousands of US small businesses rely on.
Polman writes: “Funny how the Republican doomsayers refuse to admit they were wrong, or to concede that sometimes the government needs to step in to save capitalism from its worst Darwinian excesses.
GM and Chrysler, having both emerged from bankruptcy last year, are now posting profits. Chrysler has recorded nine straight months of sales increases, compared with the same months in 2009, and it’s poised this year to introduce 16 new car models. GM went back on the stock market several months ago, and earlier this week it briefly passed its chief rival, Ford, in market value. GM has a stronger balance sheet than Ford, and stronger sales overseas.”
Syndicated columnist E.J. Dionne wrote last year: “But donâ€™t for an instant imagine that the comeback of the nationâ€™s rescued car companies, particularly General Motors, will change the way we debate governmentâ€™s role in the economy. When it comes to almost anything the government does, ideology trumps facts, slogans trump reality, and loaded words (â€œsocialismâ€) trump data.
Let there be no mistake: rescuing GM and Chrysler took political courage, and I want to put in a good word not only for President Obama but also for George W. Bush.
True, Bushâ€™s electoral career was over in December 2008, when he extended $17.4 billion of TARP money to keep the companies alive long enough to give Obama a chance to act. Still, it took guts for Bush to decide not to â€œleave the next president to confront the demise of a major American industry in his first days of office.â€
Yet it was Obama who put in the bulk of the cash â€” in all, Bushâ€™s input had grown to â€¨$25 billion before he left office while Obama put up an additional $60 billion â€” and created the tough restructuring plan.
Both presidents faced broad public resistance. A CNN Poll in December 2008 found that 61 percent of Americans opposed the bailout; only 36 percent supported it. When Obama acted two months later, a Gallup Poll found 72 percent opposing the additional money for the auto companies and only 25 percent in favor.
At the time, I was in the bailout-supporting minority because a collapse of the car industry would have devastated an already ailing Midwest. Enterprises dependent on the auto companies would have come crashing down. A White House report last week concluded that 1 million jobs would have been lost if the government had not intervened, and some estimates last year went much higher.
The decision to lose one of our core manufacturing sectors would also have been irreversible â€” a severe enough threat that even Bush, the staunch free-marketer, wouldnâ€™t let it happen. Thatâ€™s why the Obama administration is bragging a bit about the 55,000 auto jobs added since last June. â€œThe auto rescue,â€ White House chief of staff Rahm Emanuel, who met with a group of columnists last week, said, â€œis a great example of how the administrationâ€™s policies helped lead to a turnaround in the industrial base of our country.â€
Consider for a moment all of the automobile companies with significant presence here in OC.Â It’s not a surprise that Rep. John Campbell (R-Newport Beach) voted for this bailout while of course decrying any other stimulus program.Â Campbell is a former auto dealer and had benefitted from this industry time and again.
What I liked is how Polman calls out several in the GOP who were just dead wrong here; the quotes are chilling:
Sen. John McCain, in his normal role as Grumpy Old Man: “Anybody believes that Chrysler is going to survive, I’d like to meet them.”
Rep. Eric Cantor, now the House majority leader: “I don’t want Speaker Pelosi and Harry Reid designing the car that I drive, and I don’t think any American does, either. Washington, the president, Congress – none has any business running [GM]. They’ll run it into the ground.”
Sen. Jon Kyl: The auto-rescue effort “doesn’t change anything. It just puts off for six months or so the day of reckoning.”
Senate Republican leader Mitch McConnell: “We simply cannot ask the American taxpayer to subsidize failure.”
Sen. Jim DeMint, the tea party’s top inside player: “The government has forced taxpayers to buy these failing companies without any plausible plan for profitability.”
Republican chairman Michael Steele, since dumped by his own party: Obama’s rescue effort is “further proof that President Obama’s economic experiments are wrong for America.”
House Republican leader (and now Speaker) John A. Boehner: Obama’s rescue effort “guarantees failure at taxpayer expense.”
Sen. Richard C. Shelby: “I wouldn’t loan them any money. . . . General Motors . . . is headed down this road to oblivion. Should we intervene to slow it down, knowing it’s going to happen? I say no.”
Conservative leader Grover Norquist: On the scale of disasters, Obama’s rescue effort ranks “somewhere in between Baghdad and fixing the flood in Louisiana.”
Rep. Paul Broun: “It’s totally against freedom, it’s exactly the same thing that Hugo Chavez is doing down in Venezuela.”
Rep. Trent Franks: When the government intervenes in this fashion, “the disaster that follows is predictable.”
Rep. Lamar Smith: The rescue effort is “the leading edge of the Obama administration’s war on capitalism.”
Rep. Michele Bachmann (of course): “We have a gangster government.”
And Newt Gingrich, the potential 2012 presidential candidate who is widely heralded as one of the party’s big thinkers, wrote off GM and Chrysler as “failing companies” unworthy of aid. Late in 2008, he even predicted that young people would rise up and protest the car-rescue effort once they “start to figure out they’re going to pay the taxes. . . . I think you might find a lot of dissatisfaction by next summer.”
What’s interesting to me is that Abraham Lincoln, perhaps the greatest Republican president ever, lived through two grueling economic crisises in his lifetime and believes when the free market was failing that the federal government had an obiligation to step in and help to right the ship that is the American economy.Â
In this case, help was given.Â Taxpayer funds were paid back.Â And industry on the brink is thriving again.Â And the small businesses that support this industry aren’t going out of business.