Can't Romney And Santorum Handle The Truth In Michigan?

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In the Michigan primary on February 28,  all the political  tea leaf readers have Romney and Santorum mano a mano.   Campaigning in the state that is synonymous with the automotive industry, ironically  neither Romney nor Santorum  seems to know much about  its present situation.  Maybe if they read the Bloomberg Business Reports more often , instead of just watching   Cars I and II, they would be better informed.

Bloomberg today gives a laundry list of reasons why the bailout of GM and Chrysler was an unadulterated  success. GM's profit in 2011 was the largest in its 103-year history. It is once again the world's top-selling automobile company. Consequently, the unemployment rate in Michigan  ---which  had peaked at 14.1% in August of 2009--- was 9.3% last December and falling.

As a result of the automotive resurgence, Michigan is bouncing back dramatically  from the Great Recession of 2007. Its economy grew faster than every other state with the exception of North Dakota  between the 3rd Quarters of 2010 and 2011. It gained 166,000 net jobs last year,the most since 2001.

Even Michigan's Republican governor, Rick Snyder, cannot gainsay the turnaround. He concedes that the Bush($17.4 billion) and Obama($62 billion) bailout probably spared Michigan from " an economic meltdown that would have shut down the national automotive supply chain."

Despite all these positive economic indicators, Romney and Santorum obdurately remain blinkered nay-sayers. In 2008 Romney said the bailout would be the kiss of death for the American automotive industry. And in a guest editorial in the Detroit News on Valentine's Day, he called Obama's program "crony capitalism on a grand scale". Santorum told the Detroit Economic Club yesterday that the auto industry would have been as well off or better off without government help.

Apparently nobody is blinder than a Republican ideologue.  Especially if he's running for president.

Filed under: business, politics

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  • While a government infusion of cash no doubt helped stave off the collapse of two of the big three auto makers, there was a lot of carnage in the picking of winners by "autocrats". The bondholders were shafted, and those were the original, non-tax payer investors, and unions were handed control of GM, essentially.

    Not to mention the broken contracts and forced closing of hundreds of dealerships by whim and political connection. Thousands lost their heritage and lost their jobs. Of course, many of them were not union-cum-democrat voters, so they were disposable.

    The real lesson here is --as it was with the bailout of the big banks and the government "investment" in green technology --is that profits are privatized and losses are socialized. This makes for a top down state-directed economy, which is less responsive to the market and more responsive to politics. This can only lead to corruption in the long run.

    This is what Obama meant when he said he wants to fundamentally transform American society. Good enough, if you hold enough political sway to receive favors from the public treasury and can supply the votes and the money for those who direct the purse strings.

    And there is the matter of Ford....

  • In reply to Richard Davis:

    You have a selective memory. Bush bailed out the too-big-to-fail banks. And Bush started the GM bailout. Obama carried out the Bush playbook.

    If our automotive industry had been left out to hang and dry,the trail of debris would have been much much longer.

    Chrysler, I believe, has repaid its loan. GM's still has a portion outstanding.

    Both management and labor were financially irresponsible.

    The bondholders did take a hit, but what about the 401Ks that were devastated by the fraudulent practices of the big banks and hedge fund managers?

    It's easy to second guess and put any spin on it you want. But the automitive industry is alive and in much better shape at the moment and the economy in general is showing signs of rebounding (the job creation is accelerating, the stock market averages have ratcheted higher, and other economic indicators are positive). Obama deserves some credit, you think?

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