Does Mitt Romney not understand how the auto industry rescue worked, or is he just digging in because he can’t admit he was wrong about something that’s supposed to be his area of expertise? In Wednesday’s debate, John King actually pressed him about it a little:
KING: …you — you mentioned — you mentioned President Bush’s position on the Wall Street bail out. If you talk to people in the Bush administration at the time, they say they would have preferred the structured bankruptcy route that you talked about, but that there was no private capital available. That nobody would give the auto companies money and that their choice they say at the time, was to either give the government money or have them liquidate.
ROMNEY: Yeah, it was really interesting. Because, you know, I wrote my piece and I said look, these companies need to go through managed bankruptcy. And the head of the UAW said, we can’t go through managed bankruptcy. The industry will disappear if that happens. And the politicians, Barack Obama’s people, oh no, we can’t go through managed bankruptcy. Six months they wrote, I think it was $ 17 billion in checks to the auto companies. Then they finally realized I was right. They finally put them through managed bankruptcy. That was the time they needed the help to get out of managed bankruptcy.
Those monies they put in beforehand were — it was wasted money.
Mitt Romney listens to John King explain that the Bush administration would tell you that a managed bankruptcy was not possible in late 2008 and early 2009 because the capital to do the “managed” part of managed bankruptcy was not available and that without government money, GM and Chrysler would have had to liquidate. And then he completely ignores that and says that, because a managed bankruptcy became possible, months later, because of the government’s earlier action to prevent liquidation, he was right all along when he said they should go through managed bankruptcy.
Romney also said “No way would we allow the auto industry in America to totally implode and disappear”—but there is broad consensus among people involved in the industry rescue within the government, auto industry executives, and economists and analysts that Romney’s plan would have led to exactly that, that they tried to do what Romney is suggesting and it was not possible. We know in fact that Bain Capital was among the potential funders that declined to invest at the time.
Whether Romney is constitutionally unable to admit that he was wrong, believes it would be too big a liability to admit such a massive error in his supposed area of expertise, or can’t let go of his talking point that Obama gave too much to the UAW, it’s not small or incidental that he is clinging to his wrongness to the point that even John King is challenging him on it.