Why Arguing About the Auto Bailouts Is Pointless
Politicians are like 4-year-olds.
I’ll explain my reasoning for that in a moment, but I have a feeling many of you already agree.
In 2009, President Obama authorized the bailout of General Motors and Chrysler. It was a move that started with President Bush in 2008 and cost taxpayers tens of billions of dollars. Needless to say, the decision generated some serious controversy. I, for one, went on record on this blog as being against the bailouts. At the time, I figured the companies should accept the consequences of their poor financial decisions and dismal product quality. As it turns out, I don’t have a lot of say in Executive Branch decisions, and the bailouts happened regardless of my opinions.
Today, the U.S. auto industry is clearly back on its feet. GM had its most profitable year ever in 2011, pocketing over $7 billion. Factories are churning out good cars, and Americans keep buying them. Yet those bailouts of 2009 again dominate the news as the 2012 presidential election heats up. President Obama defends the bailouts as the tool that saved countless American jobs. Republican candidates Rick Santorum and Mitt Romney proudly and defiantly oppose them. To quote Mr. Santorum, GM and Chrysler would be
alive and equally as well, or better off, than they are now. The markets would have reacted to restructure it to be more competitive.
He says the bailouts were the wrong decision, and if he were president, he wouldn’t have authorized them, and things would be even better than they are now.
It’s a classic case of “I coulda done it better than you.” I remember a certain 4-year-old in my house who used to say the same thing.
The fact is, no one can really say if the auto industry would be better off, or worse, had the government not stepped in and saved it. Maybe the private sector would have come through and invested in the car companies. Maybe GM would have reported $10 billion in profits had Santorum been president in 2009. Or maybe General Motors and Chrysler would both have been liquidated by now.
Arguing about hypothetical situations is pointless. All we know is what we have.
The fact is, the auto industry was bailed out by the American government. As a direct result, we now have an auto industry that is, once again, making good money, making good cars and employing good people.
The auto bailouts are done, and they worked. Isn’t it time to move on to other topics in the political realm?