It’s been over two years since George Bush announced, in his typically garbled fashion, that the executive branch of government was going to step in to loan money to the failing automobile industry. This announcement came after Congress was unable or unwilling to support this “bail out”. Bush explained the need for such a bailout by saying that the bailout was the “more responsible” option, and that in the absence of these loans, the failure of the auto industry would inevitably lead to “worsening of an already weak job market,” and a “deeper and longer recession.” In December of 2008, before he had even been inaugurated, President-elect Barack Obama characterized the bail out as “necessary” to avoid devastating consequences to the US economy. He explained that “With short term assistance provided by this package, the auto companies must bring all their stakeholders together, including labor, dealers, creditors and suppliers, to make the hard choices necessary to achieve long-term viability.”
In her typical form, Sarah Palin spoke out against Bush and Obama, suggesting that the government should let the auto industry fail. She said:
“I would have done what the GOP [senators] did yesterday and said ‘no’ to additional bailout efforts of one industry [the automobile industry, whose proposed federal bailout was stopped in the Senate December 11]. Picking winners and losers in Washington, D.C., is a dangerous thing to do when you’re talking about a system that supposed to be based on free enterprise. When you talk about rewarding for work ethic and good management decisions and then consequences are the results of the opposite of that, and those decisions lead to some mistakes that are made in some industries, taxpayer bailouts should not be looked to as the be-all, end-all solutions…
I think the GOP did the right thing yesterday in saying, “Look, we still want more information before one industry — in this case, the auto industry — gets more taxpayer assistance until everybody knows what those dollars would be used for and how it will lead to success in this industry.”
In April of2010, General Motors announced that the company paid $4.7 billion to the U.S. government and $1.1 billion to the Canadian government, fulfilling its obligation agreed to when it received its initial bailout funds. In total, GM received $52 billion from the U.S. government, but only $6.7 billion of this amount was considered a loan. The company already paid back $2 billion, so this $4.7 billion is the last payment. The auto industry may not have fully recovered, but we are now be able to realistically consider the impact of the auto industry bailout. We still may not know exactly what would have happened if the auto industry was allowed to implode, but it would have probably involved significant unemployment and a major redefinition of the global auto industry.
Thus the auto bailout worked, and we can only imagine the disaster for the country if Palin has been allowed to determine the fate of the auto industry, and the economic stability of the entire country.
“By intervening as he did, Obama may have saved the country, or a significant chunk of it, from depression-like conditions.”
This was a “gutsy call by the President.”
While some supporters of Palin are attempting to minimize success of the bailout, citations of authority are noticeably absent. Even more telling is that Mitt Romney is trying to take credit for the bailout, suggesting that it was really his idea.
Even George Bush and Mitt Romney have now acknowledged that the auto bailout was essential to “shoring up our economy”. Jack Cafferty of CNN explained after listening to Palin speak about the bail out that her answer was one of the most pathetic pieces of tape he had ever heard. He declared that if you weren’t scared about the possibility of having her a heart beat away from the presidency, you should be. We were scared then, and she was only running for the vice presidency. We should be even more scared now, as she positions herself to be a contender in the 2012 race.