CNN's Christine Romans offered an incomplete fact check of whether GOP presidential nominee Mitt Romney ever said “let Detroit go bankrupt.” She focused heavily on the origin of the phrase rather than the almost-certain outcome of Romney's opposition to the auto industry bailout.
Romans appeared on CNN's Early Start to discuss the October 11 vice presidential debate and to fact-check what the candidates said. One of the claims she analyzed was Vice President Joe Biden's claim during the debate that Romney would have let Detroit go bankrupt:
We knew we had to act for the middle class. We immediately went out and rescued General Motors. We went ahead and made sure that we cut taxes for the middle class. And in addition to that, when that -- when that occurred, what did Romney do? Romney said, “No, let Detroit go bankrupt.”
Romans rated Biden's statement false, declaring that Romney had never used the exact words “let Detroit go bankrupt.” The basis of Roman's judgment are the actual words Romney used in a 2008 New York Times op-ed that ran under the headline “Let Detroit Go Bankrupt.” Romney, Romans argued, did not write that headline, and he “never used those words in that piece.”
But the actual policies Romney advocated are far more informative than the debate over who wrote the headlines.
Romans noted that while President Obama used government funds to rescue the auto industry, Romney had an alternate vision: He “did not want a direct injection of tax-payer funds into the companies as they were.” It is the absence of that public investment that is crucial.
While Obama loaned federal funds to General Motors and Chrysler to allow them to go through a bankruptcy, Romney explicitly opposed giving GM and Chrysler any money until after they went through the bankruptcy process. Indeed, in his New York Times op-ed, Romney even suggested that the federal government spend money on research rather than give it to the auto industry.
Indeed, Jennifer Granholm, who was governor of Michigan at the time, has explained that they were “calling everyone begging” for private funds for General Motors, but none was forthcoming.
And in the absence of financing, the auto companies most likely would have been forced into liquidation.