Romney Taking Heat Over Auto Bailouts

Throughout the media Mitt Romney has taken heat for his position on the auto-industry bailouts.  Voters are noticing, too, as recent polls show that Santorum has taken the lead in the state.  It comes at a particularly bad time as the Michigan primary is just weeks away.

Earlier this week, Mitt Romney penned an op-ed in the Detroit News criticizing the 2009 bailout of Detroit’s Big Three automakers.  In it, he stands by his position at the time of letting the companies go through a managed bankruptcy, which was eventually done by Obama, and touts his Michigan roots as the son of former American Motor Company and Michigan Governor George Romney.  Romney goes on to blast Obama, calling the bailout and subsequent caving to union demands “crony capitalism on a grand scale”.

In some respects, he is right.  How Obama and the bankruptcy courts got away with nationalizing and handing GM and Chrysler over to the United Auto Workers union is beyond me.  If that weren’t enough, Chrysler’s “secured creditors” were completely thrown under the bus, while the UAW got an ownership share of the new company.  Given the President’s track record with unions, such as the Boeing move and NLRB, it shouldn’t be much of a shock, but how the court-system let it pass is a mystery.

Romney may have been trying to blast the President for crony capitalism, but he made a grave mistake by criticizing the auto-industry to Michiganders (me included).  Since writing the piece, media outlets from both sides of the aisle have taken swings at Mitt.  Newsmax ran a story called “Detroit to Romney: Get Real on Auto Bailout“, while theHuffington Post declares that “Romney’s stance on the auto bailouts doesn’t reflect local feelings on the economy”.  Even CNN commentator LZ Granderson, a Detroit native, said that Romney’s “not family. Not anymore”.

Voters in Michigan seem to agree with the media; in recent polls, Romney’s numbers have tanked, while Santorum continues to rise.  Both still trail Obama head-to-head, but in a historically Democratic state, a win for the socially conservative Pennsylvania Senator would be a big blow to Romney’s campaign.  But why are they so upset?

Its pretty simple: Michigan’s economy lives and dies with the auto industry.  There is strong union support, mostly because virtually everyone has a family member in one, and even stronger support for the Big Three.  So when Obama swooped in to save the auto-industry, he virtually bought a large chunk of voters.  Not only that, but those same companies that were hemorrhaging money and shedding jobs before the bailout are now hiring workers and adding shifts.  People in Michigan see this and credit Obama, whether right or wrong, with saving the auto-industry, Michigan’s economy, and thus their jobs and livelihood.  To Michigan voters, it was a personal attack.

I predict a hardy Santorum win on February 28th

Unemployment rates between 1950 and 2005

This is a graph of the unemployment rate between 1950 and 2005.  I found it interesting, considering the post-war boom, Keynesian economics popular in the pre-oil crisis era and currently making a comeback, and comparing historical unemployment rates in both economic boom's and also recessions with what we're facing today.  The red and blue columns correspond to the party affiliation of the contemporary president.

upload.wikimedia.org/wikipedia/commons/6/67/Us_unemployment_rates_1950_2005.svg


Now what I found most interesting was how at first glance, it appeared that during Republican presidencies there was near universal rise in unemployment, while they tended to be lower during Democrat's terms. I thought it would be a wonderful propaganda tool for the Democrats to prove the Right's inability to manage the economy, and this is true for those who would merely glance or quickly look over the graph without studying it. But upon closer examination, this observation isn't accurate: in the period between 1969-1980, during the oil crisis, stagflation, and the height of the recession, unemployment jumps immediately after Nixon takes office (I tend to attribute economic situations at the beginning of a presidents term as the result of the previous administration i.e. Obama inheriting Bush-era economy, but we'll leave that open) and doubles, largely caused by supply shock and external forces, but is actually on the decline at the end of the Republican-era, followed by a 4 point jump to nearly 10% in the middle of the Democrat's control of the White House. Now I'll admit I'm slightly torn over how to interpret the slight drop in unemployment between 80-81, but the overall trend is clear, and again it is at the very beginning of the incoming Republican's term, before he had a chance to implement policy, so I'm taking it as a small break in the otherwise larger trend.


Of course, following Jimmy Carter's brief presidency between 1977-1981 we have the Republican hero President Ronald Regan's term. Under Reagan, unemployment consistently dropped and the economy recovered by the mid to late-80's. Unemployment rises again following the political and economic shocks from the collapse of the Soviet Union and the Gulf War under Bush Senior, but unemployment is again falling as Clinton takes office.


I am not obtuse nor partisan enough to be politically blind; under Clinton, unemployment rates fell for one of the most prolonged period in the last 50 years, rivalled only by the post-war baby-boomer era dubbed "The Golden Age of Capitalism" under one of the greater presidents we've ever known, President John F. Kennedy. For those of you groaning and yelling and you're computer about how he wasn't in office long enough to really do anything, had ANY other president between Truman and Obama been in office during the Cuban Missile Crisis, you can bet your right arm that at the VERY LEAST it would have resulted in limited-conventional skirmishes/warfare, and likely all out nuclear holocaust.


Regardless, an often overlooked fact by BOTH sides is that JFK actually CUT income tax on the middle and upper income brackets because they were "too heavy a drag on growth" and they "siphon out of the private economy too large a share of personal and business purchasing power". And what was the effects of JFK's tax cuts on "the rich"? AN ECONOMIC BOOM SO PROSPEROUS IT'S BEEN DUBBED THE "GOLDEN AGE OF CAPITALISM". I understand there were other factors at play at the time, but those factors were in play before Mr. Kennedy took office, however the tax cuts he immediately imposed were just the incentive needed to kick off a period of unprecedented domestic and international economic growth. Why can't we have Democrats, or even Republicans, like this in politics today? Our current troupe of "liberals" (crony-capitalists/quasi-socialists), neo-cons (war mongering profiteers), and "evangelicals" (socially repressive prudes) are all equally as appalling and would all likely govern the same, despite "deep divisions". I won't even call them "progressives" and "conservatives", as the former denotes an interest in social justice, sustainable development, and receiving all of the equity from the production of one's labor; while the latter believes individual human rights, liberal democracy, and equality of economic (and legal/political/cultural/societal etc.) opportunity within a free-market system. At the end of the day both aim to make life better for all and are both too good for our current politicians. I'm done with my rant.

Related articles

• URGENT: Jobless Rate Dips to 9 Percent- Senate GOP, Democrats Stuck in Jobs Stalemate (foxnews.com)
• Economic Idiot: "More Jobs In Jobless Benefits Than Keystone Pipeline" (rightwingnews.com)
• Obama Strikes Populist Chord With Speech in Heartland (nytimes.com)
• The Worst President Since Before the Civil War (americanthinker.com)
• Parties Can Look to '92 as a Guide for 2012 (thecaucus.blogs.nytimes.com)
• Obama Follows Roosevelt's Populist Path to Kansas (realclearpolitics.com)

Religion Drives "Anybody but Romney" Republican Primary

I have recently read a slew of articles from far-right Conservatives who suddenly have made Newt Gingrich their new flavor of the week.  In the "Anybody but Romney" Republican Primary it seems like the winner is going to be decided by which candidate can be more conservative than Romney and drum up enough anti-establishment rhetoric to hold the far-right's attention through the Iowa, New Hampshire, South Carolina, and Florida primary votes.