Obama's auto bailout BS

Charles Lane:

President Obama is proud of his administration’s role in rescuing the U.S. auto industry, via government-financed restructurings of General Motors and Chrysler.

But in campaigning for re-election on this aspect of his record, he has shown an unfortunate, and remarkably ungracious, tendency to distort the record of his predecessor.

Specifically, Obama told an Iowa audience Wednesday that “the administration before us, they had been writing some checks to the auto industry with asking nothing in return. It was just a bailout, straight -- straightforward. We said we’re going to do it differently.”

Uh, not exactly. President George W. Bush never gave the companies an unconditional bailout. He reluctantly loaned them money in return for what The Detroit Free Press described as “deep concessions” — and he did so in part so that Obama would not have to take office amid a full-blown industrial meltdown.

In fact, Bush had precious little time to deal with the fast-moving GM-Chrysler meltdown in the waning days of his term.

In December 2008, Congress, controlled by Democrats, punted the issue. At that point, Treasury Secretary Hank Paulson persuaded Bush to lend the troubled car companies $13.4 billion to keep them alive until Obama took office, plus some additional weeks. 

Not only did Bush aides consult with Obama’s team the entire time, but Paulson also pushed back against GOP free-market purists who were willing to let GM and Chrysler go into Chapter 11.

Amid the crisis, Bush said publicly that he would not dismiss Detroit’s pleas out of hand because “I feel an obligation to my successor.”

The loan was, indeed, conditional, including requirements for paying down debt, limiting executive compensation and reducing wages and benefits for autoworkers. It demanded detailed restructuring plans by Feb. 17, 2009. To be sure, there was an escape hatch: the deal allowed the companies to miss their restructuring targets as long as they provided the Treasury Department with a convincing rationale by March 31, 2009.

Still, everyone understood that Obama would be in the saddle by then, so it would be up to him, not Bush, whether to let the autos off the hook. GM and Chrysler could not afford to simply ignore the loan terms in the interim.

...

Obama has to be one of the most ungracious, unappreciative Presidents in history when it comes to appreciation of the efforts of his predecessor  to ease the transition.  Perhaps he has a partisan short term memory problem.  He still blew with the auto bailouts, screwing the bond holders and making a gift tot he unions whose contracts were the main culprit in bringing the companies to ruin.   His pretensions that the companies would not have gone through a Chapter 11 reorganization without the government are just ludicrous.