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Mitt Romney Discusses Auto Bailouts
Mitt Romney, a candidate for the Republican nomination for President, wrote in an op-ed in the Detroit News that “The president tells us that without his intervention things in Detroit would be worse.”
Romney also wrote that the automotive bailout was “crony capitalism on a grand scale. I believe that without his intervention things there would be better.”
On the other side of things, when you speak with residents of Michigan, where the bailouts helped the most, the point of view does not match Romney’s. Unemployment numbers are dropping in Michigan while the automotive industry is adding jobs and finally making money once again.
Detroit’s automakers and suppliers had over $80 billion invested in them by the federal government after the recession hit in 2008. GM and Chrysler received close to $60 million of that money.
The smallest Detroit automaker, Chrysler, posted a profit for the first time since 1997 earlier this month and has added 9,400 jobs. GM is expected to release its numbers on Thursday and should be posting a profit for a second straight year after losing money for five consecutive years.
“We can’t go back to 2009 and say, ‘OK, as an experiment, let’s see what happens if we let the automakers crash and burn,’” said Charles Ballard. Ballard works as a professor of economics at Michigan State University.
Michigan’s unemployment number hit 14.1 percent in 2009, making it one of the worst states for unemployment in the country. The unemployment rate for the state dropped to 9.3 percent in December, which is still above the country’s average.
The reason for the drop in the unemployment rate is that a lot of people have left the state. Michigan is the only state in the country that lost residents between the years of 2000 and 2010. Ballard also said that in the previous two years, Michigan has gained 100,000 jobs. From 2000 to 2009, close to 800,000 jobs were lost in Michigan.
Ballard also argued that there could have been one million jobs lost after the collapse of the automotive industry back in 2008. He said that the unemployment rate would have hit 20 percent instead of 14 percent. Romney also wrote in his op-ed that the automotive industry should have been left to hit bankruptcy on its own, which would have made the courts force the organizations to restructure. Romney also said that the unions received too much power as a result of the bailouts.
Governor Rick Snyder cut costs big time over the past couple of years, in education and local government, to make sure that the state has no pending deficits for the first time in almost a decade. Experts think that the money could be used to re-hire police officers or teachers that were laid off during the recession.
“I would have had some differences on how they did it, but I’m not going to second guess it,” Snyder said. “The more important things is the results. And the auto industry is doing very well today.”Mitt Romney Discusses Auto Bailouts by Jim Vassallo