The rescue of American auto giants Chrysler and General Motors has become a major issue in Ohio, the second-largest auto state in the country. And with the election just two weeks away, Mitt Romney and his surrogates are again trying to convince voters that the auto rescue he opposed was originally his idea.
Ohio voters will be “really surprised” to learn that President Obama ultimately followed the bailout plan outlined by Romney, Ohio Sen. Rob Portman (R) told MSNBC this morning:
PORTMAN: Hey look, we’re really happy in Ohio that the auto industry has made a comeback, but the fact is the Ohio voter is going to be really surprised when they learn it was Barack Obama who took them through bankruptcy because these ads in Ohio are saying, “Mitt Romney wanted to take the auto companies through bankruptcy.” Well, you know what, that’s what Barack Obama did. It was a structured bankruptcy as Mitt Romney suggested. Mitt Romney said there ought to be federal guarantees and federal government involvement.
Though Chrysler and GM did eventually enter a managed bankruptcy, the crucial difference between what Romney outlined and the path Obama followed happened prior to the bankruptcy. GM and Chrysler needed a “bridge loan” just to finance their entrance into bankruptcy. The government ultimately provided that loan.
But Romney pushed the government to stay out of it. Instead, he supported private sector financing of the bankruptcy. Private sector companies willing to finance the bankruptcy were nonexistent, however, making it necessary for the government to step in. “The credit markets were bone-dry,” The Economist remembered this year, “making the privately financed bankruptcy that Mr Romney favoured improbable.”
Though Romney and his surrogates continue to claim that the entire rescue was his idea, the auto industry doesn’t share that belief. Auto insiders and reporters who covered the rescue, in fact, have said Romney’s plan was “reckless,” “dishonest,” and “pure fantasy.”