President Obama often takes credit for President Bush’s worst policies while also averring that the economy hasn’t resurged yet because of his predecessor’s bad policies. I’m happy to blame both of them for the bad policies and bad results.
While campaigning in Ohio recently, Obama said we should pick him in November because he didn’t “let Detroit go bankrupt.”
Financial writer Steve Conover points out that the car-czar idea started with Bush in the frantic last months of his administration. Also that the choice for dealing with troubled auto firms “in 2008-2009 was not bankruptcy versus no bankruptcy [but] between precedent-driven bankruptcy and White House-driven bankruptcy — rule-of-law versus rule-of-czar.”
Not every car company was going bankrupt back then and being “rescued” by the elephantine intercession of the federal government. GM and Chrysler were the special beneficiaries of that galumphing guidance. As were the auto unions at whose behest the usual bankruptcy procedures were bypassed.
Better-managed firms like Ford and Honda had circumvented the abyss. The reward for their hard work and foresight? Government-subsidized competition. Conover’s most basic point is that the only resource that can (and should) “save” any company from failing in the marketplace is “a sufficient number of buying customers.” The auto industry would have continued minus GM and Chrysler. People who wanted to buy cars would simply have bought cars elsewhere — from companies better able to supply their demand. And auto jobs would have moved accordingly.
This is Common Sense. I’m Paul Jacob.