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Auto Rescue Foes Romney and Kasich Join Forces in Ohio

March 15, 2016

Just days after recording robocalls for Marco Rubio in Florida, failed 2012 Republican presidential nominee Mitt Romney joined Governor John Kasich on the campaign trail in Ohio on Monday. Bizarrely, Romney wasn't there to endorse Kasich, but instead merely to oppose Donald Trump. But in trying to keep alive his faint hopes of rescuing the GOP from itself at the July Republican National Convention in Cleveland, Romney's presence with Kasich only served to highlight their joint opposition to the rescue that mattered most to Ohioans--President Obama's saving of the American auto industry.
As the Wall Street Journal reported, the Republicans' always on-call white knight regurgitated Kasich's message for Buckeye State voters:

"You look at this guy and unlike the other people running, he has a real track record," Mr. Romney said. "It's the kind of record that you want in Washington."
Mr. Romney added, while standing alongside Mr. Kasich on stage here: "This is the guy that Ohio needs to vote for, America is counting on you."

But when the American auto industry was on the verge of total collapse in late 2008 and early 2009, neither Mitt Romney nor John Kasich could be counted on.
By the end of 2013, the Ann Arbor Michigan-based Center for Automotive Research (CAR) estimated that the actions by the Bush and especially the Obama administrations to provide stock purchases and loans to Chrysler, GM and parts suppliers "saved 1.5 million U.S. jobs and preserved $105.3 billion in personal and social insurance tax collections." As the Center's chief economist Sean McAlinden put it:

"This peacetime intervention in the private sector by the U.S. government will be viewed as one of the most successful interventions in U.S. economic history."

John Kasich and Mitt Romney were on the wrong side of that history. As you'll recall, it was President-Elect Obama who pressed George W. Bush in November 2008 to make the necessary bridge loans which kept Chrysler and GM afloat. (It's worth remembering that Vice President Dick Cheney who warned his GOP allies, "If we don't do this, we will be known as the party of Herbert Hoover forever.") It was that very approach Mitt Romney decried in his infamous op-ed, "Let Detroit Go Bankrupt."

"If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won't go overnight, but its demise will be virtually guaranteed."

Then-Fox News regular John Kasich essentially agreed. Filling in for Bill O'Reilly on December 19, 2008, Kasich offered this wishy-washy opinion, despite the fact roughly 1 in 8 Ohio jobs are auto-related:

"Americans will say we don't mind helping them if they're going to be viable, but if they're not going to be viable we shouldn't throw good money after bad. And shouldn't we in America be manufacturing things?"

As Obama's auto czar Steven Rattner explained four years later in "Delusions About the Detroit Bailout":

"Without government financing -- initiated by President George W. Bush in December 2008 -- the two companies would not have been able to pursue Chapter 11 reorganization. Instead they would have been forced to cease production, close their doors and lay off virtually all workers once their coffers ran dry."

Rattner wasn't alone in highlighting Romney's delusional belief in that a "managed bankruptcy" leading to an injection of capital from private markets could save Detroit without intervention from the federal government. In admitting the success of President Obama's 2009 rescue of GM and Chrysler, USA Today concluded, "On what planet would the automakers have found private lenders willing to provide tens of billions of dollars in needed bankruptcy financing at the height of a financial panic?" Michigan GOP Governor Rick Snyder and Congressman Fred Upton, Romney's highest profile Michigan primary endorsers, acknowledged that "there was no one that could have picked up those pieces other than the federal government." In February 2012, The Economist took Romney to task for his revisionist history:

Free-marketeers that we are, The Economist agreed with Mr Romney at the time. But we later apologised for that position. "Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk", we said. But "given the panic that gripped private is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended." Even Ford, which avoided bankruptcy, feared the industry would collapse if GM went down. At the time that seemed like a real possibility. The credit markets were bone-dry, making the privately financed bankruptcy that Mr Romney favoured improbable. He conveniently ignores this bit of history in claiming to have been right all along.

Romney didn't merely ignore that in convenient history; he wrote it. Mitt, after all warned in April 2009 that President Obama's proposed auto rescue would "would make GM the living dead." In May 2012, he told Cleveland-area voters:

"I'll take a lot of credit for the fact that this industry's come back."

Kasich wouldn't go that far. But as the 2012 election heated up, the Ohio Governor refused to take sides between Romney and Obama about who was right on saving Detroit and the Midwestern auto economy.

"What's done is done," he said. "We have a strengthening auto industry in Ohio. And I am very pleased about it. I am pleased for the families of workers who have jobs."
Kasich said he has visited Detroit twice this year to lure business to the Buckeye State.
Asked if he agreed with Romney's assertion that the automakers should have undergone a managed bankruptcy process instead of taking billions in bailout money from Presidents George W. Bush and Barack Obama, Kasich punted.
"I just don't have any interest in even commenting on that," he said. "I am not going to talk about Mitt Romney. It's not important to me what he said or might have said."

But as Election Day 2012 neared, Kasich downplayed the bailout altogether. He cited only jobs that had been "created" since he took office in January 2011, not the tens of thousands saved before and since. (CAR estimated Ohio had almost 850,000 auto-related jobs in 2010.) And as the New York Times recently reported, Kasich's boasting about the state budget and economy in Ohio ("Let's take some Ohio to Washington to help the entire United States of America") doesn't quite pass the smell test:

But a closer review of his record shows the reality is more complicated. Other states recovered from the recession more quickly than Ohio did. He closed the budget shortfall in part by cutting aid to local governments, forcing some of them to raise their own taxes or cut services. And increasing sales taxes helped make the income tax cuts possible...
Mr. Kasich likes to cite the absolute number of private-sector jobs created during his tenure: about 400,000, according to the federal Bureau of Labor Statistics. That number, for the period from January 2011 through December, ranks eighth in the country, though Ohio is also the country's seventh-most populous state. Other metrics are less favorable. During Mr. Kasich's time as governor, Ohio's private-sector jobs have grown by 9.3 percent -- which ranks 22nd in the country. The state trails three of its neighbors, Michigan, Indiana and Kentucky.

To put it another way, without President Obama's bailout of GM and Chrysler, Ohio, Michigan and much of the Midwest would have no economy to brag about. And as Ohio voters head to the polls on Tuesday there's only one guy who can rightly claim, "I'll take a lot of credit for the fact that this industry's come back." And his name isn't Mitt Romney or John Kasich.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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