Mitt Romney is doubling-down on his negative view of the the 2009 bailouts and bankruptcies of General Motors and Chrysler. In late 2008, he argued in the New York Times that a bailout of Detroit would mean the end of the U.S. auto industry. Today, in the Detroit News, he refuses to back off from his earlier position, says that a "managed bankruptcy" of GM and Chrysler was what was needed all along, and that the Obama administration practiced:
"...crony capitalism on a grand scale. The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better.
Before the companies were allowed to enter and exit bankruptcy, the U.S. government swept in with an $85 billion sweetheart deal disguised as a rescue plan.
By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.
Thus, the outcome of the managed bankruptcy proceedings was dictated by the terms of the bailout. Chrysler's "secured creditors," who in the normal course of affairs should have been first in line for compensation, were given short shrift, while at the same time, the UAWs' union-boss-controlled trust fund received a 55 percent stake in the firm.
He goes on like this for a bit, then takes the opporunity to evoke the memory of a Detroit of the Mind, in which great innovative businessmen of the motor age labored without government interference and the first Chrysler bailout (1979) never happened. Along the way, he takes shots at auto czar Steven Rattner ("politically connected and ethically challenged"), Rahm Emanuel and Freddie Mac. But those are the sophisticated parts. Otherwise, the whole thing reads like a standard-issue piece of union-busting from a time when there was as much lead in the prose as there was in the gas.
About the only way that Romney can claim the bailouts weren't a success is to argue, as he does, that they were unneeded. It's as if what he truly desires is a time machine that he can use to erase this piece of history. Because otherwise, he got what he recommended: a managed bankruptcy of GM and Chrysler that's enabled both automakers and the U.S. industry as a whole to dramatically recover. This is no good. He needs a parallel universe in which people actually listened to him in 2008.
Lacking the time machine, he goes to the next logical place, which is the government ownership stake in GM. The Treasury has resisted selling its equity, about 30 percent, because it figures the market is underpricing GM's stock right now — the company has enjoyed numerous proftable quarters since its IPO — and wants to make more money for the taxpayer.
That's a completely prudent strategy. It doesn't have anything to do with unions and the people who run them. It has to do with the government being as good an investor in an important U.S. company as it can be.
Romney is free to double-down on his 2008 views. But by doing so, he runs the risk on seeming twice as wrong.