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What's Good for Detroit is Good for America

Updated on August 17, 2013

Belle Isle, Detroit Michigan

The Entitled

Mitt Romney, the Republican nominee for president, argued against the use of T.A.R.P. funds (Troubled Asset Relief Program) to assist the domestic auto industry. He expressd this sentiment in a New York Times editorial piece (November 18,2008) labeled "Let Detroit Go Bankrupt." He would later claim (May 2012) in his characteristic Mitt then/Mitt now fashion that it was his ideal to save General Motors and Chrysler. Still, the record is clear as to where he stands.

He recently chastised nearly half of Americans as dependent upon the government during a recent $50,000 a plate dinner campaign fundraiser. He assailed much of our nation as whiners who believe they are victims entitled to government handouts. Gov. Romney said that he fully expects that they will vote for "this president."

The Romney logic dictates that the domestic auto industry, its employees and beneficiaries are among the entitled.They did receive government assistance.Congress, under the auspices of T.A.R.P. authorized $82 billion of loan guarantees for them. The fund was established by the Emergency Economic Stabilization Act of 2008. (Pub Law no. 110-343) It became law upon the signed approval of President George W Bush in October 2008.

The same logic would then indicate Mitt Romney himself is among the entitled. The Rolling Stone article “The Federal Bailout That Saved Mitt Romney” (author Tim Dickinson) explored in detail how Mr. Romney’s firm, Bain and Company, was forgiven $10 million debt by the Federal Deposit Insurance Corporation (F.D.I.C.) in the early 1990s. However, that topic is perhaps best explored in a separate article.

Map of auto manufacturers

America loves its cars and the jobs they bring.
America loves its cars and the jobs they bring. | Source

High Stakes

The auto industry was bleeding jobs when action was taken. The industry lost more than 400,000 jobs between March 2008 and March 2009. Experts foretold that the fallout continued unabated would have been worse as indicated by the statistics displayed later in this article.

Today, we find the city itself is in trouble. The leveling of a city ( and industry) that has played such an instrumental part of American success is troubling. The ideal that France or Italy would let their wine industry tank is laughable. Yet, as the example in New Orleans (Katrina) proved, the elected representatives in this country are fine with ignoring a large city in peril.

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The automess of an auto industry collapse

Subject
Sore Spot
Source
Jobs within auto industry
1 million auto mfg jobs would disappear
Whitehouse.gov
Jobs affected by the auto industry
An additional 2.1 million jobs disappear within a year.
Economic Policy Institute Report/December 2008 www.epi.org
Other industries affected.
Motor Vehicle parts,Fabricated Metal Product, Plastic & Rubber Products. All would suffer significant loss.
Economic Policy Institute Report/December 20008 www.epi.org
States that would be especially hit hard.
Indiana, Ohio,Kentucky, Tennessee and of course Michigan would be hurt.
Economic Policy Institute Report/December 2008 www.epi.org
G.M. and Chrysler collapse
A cost of $28.6 billion in lost tax revenues and assistance to the unemployed in just the first two years.
Center for Automotive Research
U.S. trade deficit
Increased by over $100 billion.
varied

Imported from Detroit

Charles E Wilson, a former General Motors (G.M.) executive is credited with the quip that “what’s good for General Motors is good for America.” He said as much during the idyllic 1950’s. The numbers bear witness to his philosiphy nearly 60 years later. The national unemployment rate lingered at or near the 10% mark in the 2009 calendar year. It has since declined steadily, going below 8% for the first since the beginning of the Obamaian presidency. The auto industry as recipients of government assistance has added one quarter of a million jobs during this time.

The state of Ohio, where one of every eight jobs rely on the auto industry, has an employment growth spurt this year. General Motors recently announced plans to modernize plants that produce the Chevrolet Cruze in two Ohio locations. It is clear the fates of the auto industry and the economy are intertwined.

Made in the USA

The author's Chevrolet Cavalier  was built by UAW workers in Lordstown, Ohio.
The author's Chevrolet Cavalier was built by UAW workers in Lordstown, Ohio. | Source

Love American Style

America and the automobile are more than a marriage of economic convenience. Theirs is a romance that began when the two of them were young. The marriage between America and its signature product, the automobile, should continue for the sake of their children-the national prosperity within and international power that emerged in the twentieth century and continues scarred but intact to this very day.

It confounds good sense that a Michigan native, whose father (George Romney) held title as chief occupant of the Michigan Governor’s mansion (first elected 1962 served as Governor 1963-1969) would care so little about the auto industry’s fortunes. Given Detroit’s relationship with the remainder of the country, Mitt Romney’s proclamation to let Detroit go bankrupt is tantamount to a suggestion to let America go bankrupt. He is correct in one sense: the recipients of a recovered domestic auto industry (everyone) should vote for” this President”, Barack Obama.

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    • Au fait profile image

      C E Clark 4 years ago from North Texas

      The unemployment rate doesn't include anyone who isn't actually collecting unemployment benefits and a lot of people's benefits ran out long ago. Lots of people were denied benefits because employers said they were fired or that they quit -- a lie to avoid paying benefits. Beyond that were the many small businesses that went under and of course very few business owners qualify for unemployment -- probably none of them do.

      The unemployment rate has been artificially reported from the start and even today hovers closer to 17-18%. Some members of Congress are benefitting from maintaining a stagnant economy and from helping the banks and some other big businesses take so-called bailout money, and they are getting it to this day. Why is no one complaining about all the corporate welfare?

      Michigan is a mess, and I'll leave it at that because I really prefer to avoid politics on this site.

    • justthemessenger profile image
      Author

      James C Moore 4 years ago from The Great Midwest

      New information has surfaced about the infamous "47%" remark uttered by Mitt Romney. It can be found at the following link: http://news.yahoo.com/blogs/ticket/worker-taped-ro...

    • justthemessenger profile image
      Author

      James C Moore 4 years ago from The Great Midwest

      Thank you for reading my post. Now the answer: The problem with bankruptcy at least with regard to recent corporate bankruptcies is that too often companies can weasal out of their contractual obligations simply by pleading to a friendly judge in Federal Bankruptcy Court. What happens then is contractually obligated pensions are shifted to the Pension Benefit Guaranteee Corporation i.e. the taxpayers. Similarly agreed upon health benefits can then get dumped into the remaining health care consumers cost and etc. And, lest we forget the Center for Automotive Research estimated nearly $30 billion cost of lost revenue just in the first two years. The decision to bail or not to bail boils down to which option cost the least. In this case it cost less to bail.

    • profile image

      SassySue1963 4 years ago

      It isn't about them not receiving any Government help. It is about them going through procedural bankruptcy. This is necessary to prevent bailout after bailout after bailout of these companies that the unions are killing.

      If it was soooooooooooooooo successful why is GM on the verge of bankruptcy again? Because they never follow procedural bankruptcy.

      Are we supposed to bail them out yet again? when does it end?

      http://www.forbes.com/sites/louiswoodhill/2012/08/...