Detroit is Going Bankrupt: Thanks Obama! No Seriously, The Auto-Bailout Was Still Necessary
I have been seeing a lot of headlines like this. However, it over simplifies this issue for political purposes. President Obama said for a long time that he wouldn’t let Detroit go bankrupt, and they are going bankrupt. Obviously his words can be used against him for political reasons. His statements however were in regards to the life blood I Detroit, the car companies, staying afloat through a bailout, and presumably keeping the city afloat. Well, in this newer age of companies and few individuals prospering enormously, and most other stagnating or backsliding this was too hopeful of a statement for the President to make.
With that being said the alternative was not thought to highly of by most any expert in relation to this obstacle course. The alternative being the proposed approach by Republican Presidential hopeful Gov. Mitt Romney; who said that there should be no bailout. Since there was no private funding being offered without a government guarantee of a bailout this was simply not an option. The structured bankruptcy was the route that was eventually taken, but the private funds that were necessary only came once the bailout was eminent.
And with Detroit announcing a bankruptcy let’s not forget that we are talking about a municipal bankruptcy, not a cooperate bankruptcy.
I have seen a lot of people post about this on my social networks since the announcement of the bankruptcy. Many of them are people who I love and respect a lot, but that doesn’t mean that this is being fairly portrayed.
Here is one of my beloved friend’s status updates, and my response.
Yes. But this is more complicated than that. It’s first about trying to compare what has happened to what might have happened (and of course recognizing that what Romney was suggesting was just not going to happen – he wanted to save the car companies through private investment, and nobody wanted to be investors without some government support, just the truth).
Also, this is about a municipal bankruptcy, not the corporations being bankrupt, as they are not. You are comparing the wrong things, but there is a comparison to be made between enormous companies succeeding while society and communities are failing around them. Part of that is efficiency in the businesses, and part of it is businesses not living by the same rules.
If you are still trying to defend Romney’s approach to the car companies this isn’t necessarily indicative of anything, but there is plenty to talk about in regards to why this is happening, it is a really sad and complex story.
If you think I’m speaking misguidedly please help me understand. Where am I getting this wrong?