Originally published in Politico
As the punditocracy dives deeply into its postgame dissection of Tuesday’s presidential contest, the president’s decision to help the auto industry and former Gov. Mitt Romney’s famous call to “Let Detroit Go Bankrupt” have loomed large in the discussion.
By winning Ohio, the president made the electoral math nearly impossible for Romney, essentially assuring a reelection victory.
But here are two ironies: First, Romney’s mid-November 2008 New York Times op-ed didn’t have to become a millstone around his electoral chances. He could instead have used it to take credit for the auto rescue, perhaps allowing him to capture Ohio and other important Midwestern states.
And second, we on the president’s auto task force in 2009 never gave the wispiest thought to political benefits that might accrue in Ohio in 2012 or even to the 2012 reelection at all.
Take the Romney op-ed. Apart from the unfortunate headline (which was not, of course, written by Romney), the substance of the piece was surprisingly prescient — and not wildly different from the plan that President Barack Obama ultimately adopted.
Remember that Romney wrote his op-ed before Obama’s inauguration, when Congress was considering providing $25 billion of rescue loans to the hemorrhaging companies.
Among the problems with Congress’s plan was that it would have imposed few conditions on the automakers — no restructuring, no new management, almost no new anything.
So Romney was quite right to weigh in. “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye,” Mr. Romney wrote.
At the time, no one had a coherent plan for how to help Detroit. I know that — because of the possibility of my taking on the problem, I was paying close attention to the various ideas floating around for how to help the automakers.
Romney came close. His plan called for managed bankruptcies to strip away suffocating legacy costs, new management teams with limits on executive pay and investment in better products. Sound familiar?
The one consequential difference between the Romney plan and the Obama plan was that Romney called for government financing only on the way out of bankruptcy.
While that notion was unworkable — the companies needed government cash to operate during the bankruptcy — Romney could have easily tweaked his position along the way to finesse that problem.
But then politics clouded Romney’s judgment. When Obama announced his restructuring plan, Romney attacked, calling the Obama approach “tragic” and “a very sad circumstance for this country.”
That boxed him into the position of an opponent of the government rescue, a perception that Romney unwisely did nothing to counter, even as the success of the rescue became clear.
Instead, he doubled down in an effort to win over Michigan Republicans — who, according to polls, still opposed the government’s actions — during the primary season.
In a Detroit News op-ed in February 2012, he wrote that “the president tells us that without his intervention, things in Detroit would be worse. I believe that without his intervention, things there would be better.”
Just two months later, with the Republican nomination within his grasp, Romney began trying to do what he should have done all along: take credit for the auto success. “His position on the bailout was exactly what President Obama followed,” his key adviser Eric Fehrnstrom said.
By the third debate, in October, Romney was emphatic. “Under no circumstances would I do anything other than to help this industry get on its feet,” he said.
But it was too late. The “Let Detroit Go Bankrupt” headline was seared into the minds of the public. And he had stubbornly clung to the notion that government financing should only be available at the end of bankruptcy, even as expert after expert declared that idea unworkable.
Meanwhile, the president’s team was crafting a proposal that we thought was strong in its policy but weak in its politics.
The public hated bailouts, Obama’s key adviser, David Axelrod reminded us in White House meetings.
Indeed, a low point for me after our plan was announced was seeing a job approval poll for Obama in which he had positive marks for handling nine major policy issues and negative marks only for one — autos.
Perhaps others in the White House, more politically astute than I, saw the potential political benefit of our auto plan.
I can say honestly on behalf of myself and my team that all we were focused on was doing the right thing for the industry. I guess sometimes, good policy can lead to good politics.
Home | Bio | Articles | Media | Blog | Overhaul | Contact | Media Requests
© Steven Rattner 2012