One of Obama's major attack thrusts against Mitt Romney in this seemingly endless presidential campaign has to do with the bailout of GM and Chrysler.
Timothy P. Carney at The Washington Examiner has an excellent deconstruction of the Obama myth making of accusing Romney of wanting to shutdown the auto industry. I've said as much in previous posts here on CP.
Had GM, in particular, gone through Chapter 11, it could have rid itself of the onerous UAW labor union agreements, which have hamstrung it and continues to do so without any renegotiation of the many contracts it has with the UAW. Obama acted as the bankruptcy judge and refused any renegotiation of labor contracts. Obama also, and most egregiously, cancelled all creditor obligations. All GM bondholders were completely shutout in recovering any money from the failing GM. Under bankruptcy law, creditors are the first to receive any funds from the selling off of assets of the business in bankruptcy. Many public and private pension funds were left holding worthless bonds after they had loaned GM hundreds of millions of dollars. Where's the economic justice in that? Everyday working class people lost that value in their retirement funds from this government usurpation of bankruptcy law and contract law. Obama's intervention was a payoff to the UAW, since the UAW would become the majority stockholder in the New General Motors, which they still are.
On to Carney's deconstruction.
The single biggest theme of President Obama’s reelection campaign has been a misleading attack-and-brag regarding the auto bailouts.
Obama and his partymates have attacked Romney a hundred times on the grounds that Romney wrote an op-ed with the headline “Let Detroit Go Bankrupt.” The implication of this attack is very clear:
(1) Obama didn’t let Detroit go bankrupt. and (2) Romney wanted to liquidate the failed automakers.
Both claims are false. And I’m not inferring too much here — Obama has made both of these false claims explicitly. “We didn’t let Detroit go bankrupt,” Obama said in a June fundraiser in Baltimore. “We refused to let Detroit go bankrupt,” Obama said in his radio address two weeks ago.
Here are Chrysler’s bankruptcy filings from April 2009. Here’s an MSNBC article from a month later, reading “General Motors filed for Chapter 11 bankruptcy protection Monday as part of the Obama administration’s plan to shrink the automaker….”
So, Obama actually took GM & Chrysler into bankruptcy...
Actually, Obama had already obviated bankruptcy law. Had GM indeed gone into Chapter 11 proceedings, they could have cancelled all contracts, including their labor union contracts with the UAW. That's where Obama created his own version of bankruptcy law. Obama paid off the UAW by not allowing labor contracts to be rescinded.
...The second implication is that Romney wanted to drive GM & Chrysler out of business, and that he wouldn’t have bailed them out. Again, Obama repeatedly made this claim explicitly.
In the third debate, Obama said “You did not say that you would provide government help.” Later he said, “You were very clear that you would not provide, government assistance to the U.S. auto companies, even if they went through bankruptcy.” But Romney’s op-ed explicitly calls for federal loan guarantees and federal management of the bankruptcy.
It’s hard to consider this anything than a dishonest attack by Obama, and it’s kind of amazing that he got away with it, almost entirely, until Romney called him out on it in the third debate.
These days, it’s Romney who’s playing fast and loose on the auto industry. You see, after Obama gave Chrysler to an Italian company, Fiat, corporate management said they would start building some Jeeps in China. They never said they would move any jobs out of the Jeep plant in Toledo, but that seems like the implication Romney is trying to give off in the ad — and he has asserted as much explicitly as least once.
So now the Obama campaign, which has been blatantly and constantly misleading on auto industry stuff, has taken to full-time condemnation of this “outrageous lie.” The liberal media has joined in the chorus of righteous condemnation, and the mainstream has picked up the Obama campaign’s gripes.
Give Obama this — he’s good at working the refs...
Meanwhile taxpayers are on the hook for $25 BILLION dollars which GM will never be able to payoff nor will the federal government be able to sell their 25% stock holding in GM to recover that $25 BILLION dollars, since the price of GM stock would have to more than double to do so.
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