The Auto-Industry Bailout and 2012

Posted on 05/15/2011 at 9:00 am by JM Ashby

Politico is speculating, backed by corroborating evidence, that a major cornerstone of President Obama’s reelection strategy will be to tout the successful bailout of the U.S. auto industry which saw the poorly managed General Motors get its act together and once again become a successful company.

One particular reason why this strategy is seen as fool-proof is because nearly every Republican presidential nominee played the role of Doomsayer during the time of the bailout, with Mitt Romney going so far as to say we could “kiss the auto industry goodbye.”

General Motors has announced that it’s making two billion dollars in new investments at 18 U.S. plants, a pattern of overall improvement among bailout recipients, putting the auto companies on track to pay back most of the funds they borrowed from the U.S. Treasury. While much of the public is currently unaware of the success of the bailout program, strategists are optimistic that the industry’s successes will lend credence to Democratic policies while becoming an albatross around the necks of the Republicans who opposed the payments to car companies. The funds were paid out in two lump payments in 2008 and 2009.

The list of Republicans who tried to block the bailout reads like a “who’s who” of 2012 hopefuls. The plan was opposed by Indiana Governor Mitch Daniels, Mitt Romney, Mike Huckabee, Tim Pawlenty, Newt Gingrich, Ron Paul, and Michele Bachmann. Romney even warned darkly in a New York Times Op-Ed piece called “Let Detroit Go Bankrupt” that if the government offered auto companies bailout money, “you can kiss the American automotive industry goodbye”.

Mitt Romney just can’t catch a break can he? “Let Detroit Go Bankrupt” makes for very unfortunate campaign ads.

I’d call this a win-win scenario for Democrats in 2012, and not only because the auto-industry recovered and saved millions of jobs in the process, but because it will be very difficult for Republicans to make a counter-argument in favor of letting the auto-industry implode in the particularly important swing states of the Midwest.

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  • alopecia

    The only counter-argument the Rs can possibly make—in public, at least—is that Evil Big Gummint is running a major industry (never mind that the government is demonstrably doing no such thing). I’ll predict that they will be abetted in this by our wonderful news media, no employee of which will ever challenge such assertions.The Rs will also argue that had GM and Chrysler gone out of business, other car companies would have picked over the bones and started fresh, never mind the irony that those companies would have been foreign (and never mind the even larger irony that prominent Rs complained when Fiat started buying Chrysler stock). Romney et al. wanted GM and Chrysler to collapse, simply because that would have been a thumb in the eye of labor unions, but that’s something they can never say. In public, at least.

  • http://www.aconsciousoutpost.blogspot.com ronspri

    Wow, the Karma is hitting the rightists hard these days. Maybe someday they will discover that is how it works. Everything you do comes back to you…good or bad.

  • http://pulse.yahoo.com/_WOXL54AFP4YPKWIT6FRXFY4DDA Edward Stevens

    I agree that the auto-industry has given so many descent jobs to Americans. I guess they are just sensing that the Obama administration is just using the auto-industry for his reelection on 2012. General Motors can do whatever they want just as long as the Americans are also benefiting from it.

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