Mitt Romney has an ad airing in Ohio in which a remarkably sympathetic car dealer complains that the Obama bailout of the auto industry led to the closure of his dealership. The emotional takeaway: Romney would never be so cold-hearted as to require job losses as part of a rescue plan.
Where to start with the utter hypocrisy!
First, the raw facts: Romney opposed the bailout, preferring bankruptcy for Chrysler and General Motors. The Romney bankruptcy plan would have led to the loss of more than 1 million jobs. The bailout under Obama led to the revival of the industry, with more than 250,000 jobs added. Those facts are pretty indisputable. For Romney to assert that his was somehow the more sympathetic, job-protecting plan is simply a distortion of fact and history.
Second, everyone who examined the car industry agreed that it needed to be reorganized at many levels: work rules, pensions, speed of design, dealership structure, and more. It would have been irresponsible to simply throw money at the industry without demanding painful sacrifices. These changes eliminated much of the waste and left a leaner, more efficient industry.
But Romney knows this—it was his business model. It is precisely what Bain claims it did for its clients. Romney knows this is the essence of the creative destruction that can rebuild a more competitive industry. Pretending that anyone would, could, or should have invested huge sums in the auto industry without demanding change is simply irresponsible.
Which brings me to my third point: I wish the Obama administration had added another element to its discussion of Bain. Simply put, the White House could claim: “We do it better!” Their auto-sector investment is a paradigm of success. Rather than let an industry fail or simply move the jobs overseas, as Bain seems to have done, the administration negotiated with all parties to restructure, share the sacrifice, and rebuild. The public’s return on investment will be real—and we saved an entire sector. Don’t attack the notion of private-equity investment that retools an industry; claim the mantle that we know how to do it better. The argument puts us on the right side of economic growth, has the virtue of truth, and denies Romney what he has pretended is his calling card: the ability and know-how to rebuild the economy.