As one example, here is what I wrote in early 2012:
All those on Capitol Hill – the conservative purists and those Southern senators protecting their state’s foreign auto plants – should never be forgiven for what they tried to do to the industry, to the state of Michigan, and to Macomb County.
Those who said loaning money to GM and Chrysler would be “like pouring money down a rat hole” almost made one of the biggest mistakes in the history of Congress.
I raise this issue because General Motors announced today
that it will spend a whopping $5.4 billion upgrading its auto plants across the
U.S., including $783 million here in Michigan.The 3-year capital investment plan comes after a
company-commissioned report from the Center for Automotive Research found GM
has already spent $11.3 billion upgrading its 40 U.S. manufacturing plants
since emerging from bankruptcy in July 2009.While not calling for apologies, Congresswoman Candice
Miller's reaction to the good news was to point out that those who said the
domestic auto industry could not revive and thrive were wrong. Here's her
statement (emphasis added):
"Today’s announcement that GM will be investing $5.4
billion into its U.S. plants – starting with $783 million in Michigan alone –
is further proof that our domestic auto industry is not only coming back from difficult
times, but coming back strong. Those who questioned the resilience of our
domestic automotive industry and the hardworking men and women who make
southeast Michigan the heartland of American innovation have once again been
proven wrong.
"Today’s announcement is also further proof of the
outstanding leadership and vision provided by GM CEO Mary Barra and her strong
commitment to continuing to build this industry right here at home. I
applaud this announcement and believe that, looking back, this continued,
sustained and strong growth of the domestic auto industry confirms that
providing bridge loans to help this vital industry through the economic
collapse was the right thing to do."
It's important to note that those who said the bridge loans
to GM and Chrysler would present a tremendous cost to the federal government
were also wrong. Most of the loans were paid off early and the total net cost
to the government was barely a drop in the gas tank.In December, the final figures showed that the government lost nearly $9.3 billion in the process of loaning $80 billion to the two automakers during the Bush and Obama administrations. That's far below the $44 billion loss that was anticipated early in the process.
I pointed out at the time that the bailout saved countless jobs and prevented a much deeper economic downturn nationwide in 2009, but in the end the plan cost less than what the Pentagon spends in less than a week.
Just as a comparison: If you spend $9.3 billion to save America's premier manufacturing industry, you save more than 1 million jobs and much more. If you spend $9.3 billion at the Pentagon, based on their annual budget, that money will last five days and seven hours.
The opposition to the auto rescue was another case of
blind ideology over practical reality.
*****
For those ideologues who continue to argue that Ford
represents the good guys for not taking bridge loans, not so fast. There
is a good argument to be made that Ford didn't take rescue loans along with GM
and Chrysler, but they did receive aid from the overall package of financial
assistance during the Great Recession that included TARP and other
programs.For example, at the time when the U.S. economy was nearly collapsing Ford Credit reportedly borrowed $15.9 billion dollars from the feds, more than GMAC, GM’s financing arm, which borrowed $13.9 billion. All three domestic automakers are thriving, and all three should offer a thank you to Washington for providing a helping hand.
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