Something really interesting about Mitt Romney

Obama referred to fact that Mitt Romney wanted Detroit to go “bankrupt.”

This statement is drawn from a headline — “Let Detroit Go Bankrupt” — on an opinion article written by Romney for The New York Times. But he did not say that in the article. (He repeated the line, however, on television.)

Although “bankrupt” often conjures up images of liquidation, Romney called for a “managed bankruptcy.” This is a process in which the company uses the bankruptcy code to discharge its debts, but emerges from the process a leaner, less leveraged company.

Ultimately, along with getting nearly $80 billion in loans and other assistance from the Bush and Obama administrations, GM and Chrysler did go through a managed bankruptcy. But many independent analysts have concluded that taking the approach recommended by Romney would not have worked in 2008, simply because the credit markets were so frozen that a bankruptcy was not a viable option at the time.

The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assured buyers that their warranties are not at risk.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.

Thank Obama For The Auto Rescue

Of Mitt Romney's many costume changes, the new Superman outfit portraying him as the would-be savior of the American auto industry wins for most imaginative. Understood: His infamous "Let Detroit Go Bankrupt" op-ed has proven a great inconvenience to winning votes in the industrial Midwest. But continually insisting that one didn't say what one said is severely not honest. Romney is the kind of politician you ask, "Trick or treat?" and he answers "both."

A new Romney campaign ad for Ohio intones, "He has a plan to help the auto industry." A nice sentiment now that the carmakers no longer need saving. His plan in the winter of 2009, when General Motors and Chrysler were clearly going under, was to deny them government aid. (As you may know by now, the ad's riff about Chrysler sending Jeep production to China is untrue.)

Romney was trying to please a Republican fringe that demonizes unionized workers. And he had support from Southern lawmakers figuring that Detroit's collapse would mean less competition for the foreign-owned companies making cars in their region.

President Obama spent those grim days winning government guarantees for automakers over fierce Republican resistance. Consumers were cowering under their beds. It was government help or disaster. Auto industry analysts predicted that even solvent Ford could not have endured the collapsing chain of suppliers that would have undoubtedly followed an unsupported GM bankruptcy.

But Romney lectured the car companies to get private financing at a time when private lending had virtually dried up. Healthy companies couldn't get it.

Interesting that the ad mentions Romney's endorsement by the Detroit News. Everyone should read that editorial. While backing the Republican, it straightforwardly credits Obama for saving the auto industry.

"Don't assume it was a no-brainer for a conservative newspaper to endorse a conservative presidential candidate," the editorial stated in a section subtitled, "Thank Obama for auto rescue."

Romney "was wrong in suggesting the automakers could have found operating capital in the private markets," the Detroit News said. And it dismissed Romney's call for "post bankruptcy" government-backed loans as irrelevant: "What GM and Chrysler needed were bridge loans to get them through the process, and the private credit markets were unwilling to provide them." The editorial went on, "Obama put a rescue team to work, and they were true to the task."

It was rather coy of Romney to offer government assistance "post bankruptcy." That's like letting a house go over Niagara Falls and then offering to insure it if it survived.

Meanwhile, anti-union partisans continue pushing propaganda that the Detroit bailout was a United Auto Workers bailout. The facts: Labor costs at unionized factories were indeed way out of line and had to be brought down. But that was done in the restructuring. Even before, the UAW had accepted cuts for new hires in health care benefits, job security and pensions. The UAW later agreed to slash wages for new workers to half of what they were.

For the first time since Henry Ford raised wages to $5 a day in 1914, newly hired autoworkers are making less than the average U.S. manufacturing wage. It seems at times that some people won't rest until America's blue-collar workers are turned into serfs.

Obama took an enormous political risk putting so much taxpayer money behind the car companies -- though no leader could have responsibly stepped aside at the time. Remember that the Detroit bailout was started under George W. Bush. "I'd do it again," Bush said a few months ago.

When it came to saving the U.S. carmakers, Romney was no Superman. He was a super-panderer willing to sell out America's industrial heartland for a few right-wing votes.