The Deal That Saved Detroit (And Banned Strikes)

[xchrom]

http://www.thenation.com/blog/166031/deal-saved-detroit-and-banned-strikes

President Obama is, as AP puts it, "wearing his decision to rescue General Motors and Chrysler three years ago as a badge of honor" on his reelection campaign. It saved jobs and working communities, brought the US auto industry back from the brink. In January, U.S. auto sales were up eleven percent over a year ago, and a proud president was cooing to the college students of Ann Arbor, Michigan:

"The American auto industry was on the verge of collapse and some politicians were willing to let it just die. We said no… We believe in the workers of this state."

You're going to be hearing a lot about the deal that saved Detroit in the next few months, not least because likely opponent Mitt Romney was against it. Then Governor Romney wrote in the fall of 2008 that if the big three auto companies received a bailout "we can kiss the American auto industry goodbye." Romney bad; Obama good; Big Three back. The Deal with Detroit is gold dust for Democrats. Reality is a bit more complicated.

For one thing, it was Republican President Bush, not the Democrats’ Barack Obama, who originally decided not to stand by as the auto makers died. The deal saved an industry – US cars are still being made in the US -- but it came at such a high price that in many ways it's a whole new industry. The American auto industry that built middle class lives as well as cars -- that one we kissed good-bye, and it may be a while before we see it back again.

To review: in the fall of 2008, President George W Bush announced a $17.billion loan, split into $13.4 billion at once and another $4 billion in February. The billions for Detroit were tied tight with all the string that had not been attached to the trillions simply given away to Wall St. The Treasury never forced the financial industry to hand over majority shareholder control in exchange for access to the Troubled Asset Relief Program. No CEO of AIG or Bank of America or Well Fargo had to shrink a wage or skimp on a pension. (Far from it, the Government Accountability Office found that the "standard agreement between Treasury and the participating institutions does not require that these institutions track or report how they plan to use, or do use, their capital investments.&quot

[tabatha]

1. The loan that Bush made was just to kick the can down the road.

It did not do much.

Laura Flanders should do her homework better.

[zipplewrath]

2. Yeah, it's a poorly written history

The executives were gone. Union was protected in many ways. And Bush didn't really do much at all. He virtually admitted he did just enough to stick the next guy with the problem.

I wasn't a huge fan of all parts of the agreement, but even the unions saw the fix everyone was in. It was one of the better things Obama did, even if it was far from perfect.

[yurbud]

3. this would be the basis for a good question for debates in general election

I don't think Obama or Romney would have an adequate answer for this, except that Romney wouldn't have helped Detroit at all.