Friday, January 13, 2012

What If Bain Capital Had Taken Over GM?

Whatever Romney did at Bain Capitial, he does not have the outlook or brains to be president of the United States. No more than did President Carter, who campaigned in 1976 as a "businessman" peanut farmer and then mismanaged the economic crisis he had inherited from Richard Nixon and Gerald Ford. In fact, next to Obama's record on jobs, any actual jobs Romney created through Bain Capital are just peanuts compared to what Obama did by saving General Motors.

The stark truth is that President Obama saved an ENTIRE INDUSTRY. Not just any industry either. He saved our BIGGEST manufacturing segment. And since he helped the auto industry, it has done spectacularly well. This past week GM announced a 13% gain in 2011 over the prior year. This puts GM back on top as the world's number one auto company and includes over 2 million autos it SOLD in China! Indeed, all the US auto companies had a damn good year in 2011. They are doing better now than they did for decades before the government stepped in. And, contrary to all the GOP screaming about "socialist takeover", the US government did not proceed to take over other companies. Obama recognized that this one thing had to be done and did it. It took guts. Every bit as much as okaying the Seals' attack on Bin Laden.

Once again, however,  Obama doesn't get the credit he deserves. Where's the front page stories about GM's great 2011?

At stake in the auto industry bailout were millions of jobs, far more than the 100,000 "net" jobs Romney claims he created but for which he has no proof. Beyond the auto plant jobs Obama saved were those of the suppliers, the shippers, the ad agencies, the salespeople. Plus all the stores and service people who relied on the spending of those who worked in the auto industry. It is generally held that the multiply factor of one paycheck is ten as the money circulates through the economy.

Keep in mind that Romney OPPOSED the feds helping the auto industry.

He believed it should be allowed to go under because, in his view as a businessman, that was the appropriate business move. Even though his father made a fortune in the auto industry, which is presumably Mitt's money now, Romney couldn't see saving GM as necessary to the US economy rather than a simple business decision.

There's more than irony here. His shortsightedness on this issue is deeply troubling. More than almost anything else it bespeaks a disastrous presidency for the economy should he be elected, for which we shall all pay the price.  

If he had been president in 2009, with his "businessman" thinking, he would have taken us right over the cliff into the Second Great Depression. It would have actually been worse than the one in the 1930s. At least back then GM managed to stay in business. In fact, my dad bought a new 1936 Chevy. Sixteen years later it became my first car, but it's not sentiment for Betsy (all good old Chevies were called Betsy) that makes me hostile to Romney for wanting to kill GM. Romney terrifies me on financial grounds.

Romney has all the wrong ideas about the economy, beginning with his basic assertion that his business experience as a takeover-cure-or-kill manager is relevant to the presidency. The United States government isn't some wobbly business ripe for a takeover.  It isn't a business at all. The purpose of business is to make money. There's a place for that in our society most certainly. The purposes of government are, however, far different. Not to understand that difference is to be, prima facie, disqualified to be president.

I support capitalism and the free enterprise system. They are fundamental to the success of the American story. But our government has been a major part of that success too. It's so obvious that it shouldn't need saying. And the two  -  government and business  -  are, I repeat, different. I've been in both at pretty high levels. Business is about making money. Government is for promoting the general welfare, and sometimes that involves taking a role in business, as in saving the auto industry. But running a business and running a government require different skills, different goals, different principles, and often very different decisions.

Obama understood that in 2009 when he made a governmental decision to save GM. Romney didn't and still doesn't.

Please also keep in mind that the last president we had who was a businessman (Carter wasn't really) was none other than Herbert Hoover.

And we all know how that worked out, don't we?

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