PolitiFact Ignores Romney Statements On Auto Rescue

Blog ››› ››› TODD GREGORY

PolitiFact ignored Mitt Romney's repeated statements about the auto industry to criticize President Obama for saying during the third presidential debate that Romney opposed government assistance for U.S. auto companies.

During the debate, Obama said to Romney, "You were very clear that you would not provide government assistance to the U.S. auto companies even if they went through bankruptcy. You said that they could get it in the private marketplace. That wasn't true."

PolitiFact declared Obama's statement "mostly false." In its analysis, PolitiFact spent a great deal of time trying to parse a phrase from Romney's widely discussed 2008 New York Times op-ed on the subject of the auto industry rescue. In the op-ed, Romney stated: "The federal government should provide guarantees for post-bankruptcy financing."

But PolitiFact ignored other remarks from Romney on the subject. As The New Republic's Jonathan Cohn noted, Romney clearly stated in a November 2011 Republican primary debate that the auto industries should have been forced to go bankrupt without any government involvement.

When asked by CNBC's John Harwood about his op-ed, Romney responded, in part:

My view with regards to the bailout was that whether it was by President Bush or by President Obama, it was the wrong way to go. I said from the very beginning they should go through a managed bankruptcy process, a private bankruptcy process.

We have capital markets and bankruptcy, it works in the U.S. The idea of billions of dollars being wasted initially then finally they adopted the managed bankruptcy, I was among others that said we ought to do that.

My plan, we would have had a private sector bailout with the private sector restructuring and bankruptcy with the private sector guiding the direction as opposed to what we had with government playing its heavy hand. [emphasis added]

Likewise, in a February Detroit News op-ed attacking the auto industry rescue, Romney portrayed government intervention as having been forced onto GM and Chrysler, rather than something they were in dire need of. Romney wrote positively of managed bankruptcies for the companies, but then said, "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."

Romney also once told reporters that it "would have been best had the auto companies gone through the bankruptcy process without having taken $17 billion from government."

In reality, government intervention is the only thing that kept the companies alive. Many experts, including the chief economist for the industry's think tank, the Center for Automotive Research, have said that a bankruptcy could have meant liquidation for the auto companies because a private restructuring was impossible. When the rescue was taking place during the 2008-2009 financial crisis, credit markets were frozen and private financing was unavailable.

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Economy, Jobs, Wages, & Unemployment
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Politifact.com
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