Jared Bernstein has it:
Steve Rattner’s oped in this AM’s NYT provides a useful reality check of the credit market conditions back during the auto bailout in 2009, attacking Gov Romney’s view that the government should have stayed out of the picture.
In late 2008 and early 2009, when G.M. and Chrysler had exhausted their liquidity, every scrap of private capital had fled to the sidelines…
Without government financing — initiated by President George W. Bush in December 2008 — the two companies would not have been able to pursue Chapter 11 reorganization. Instead they would have been forced to cease production, close their doors and lay off virtually all workers once their coffers ran dry.
Those shutdowns would have reverberated through the entire auto sector, causing innumerable suppliers almost immediately to stop operating too.
Despite the relative health of its balance sheet, even Ford would have been forced to close temporarily, because critical parts would have become unavailable. And service providers — trucking companies, restaurants and more — would have been severely affected.
More than a million jobs would have been lost, at least for a time. Michigan and the entire industrial Midwest would have been devastated.
I was particularly impressed by a recent comment from President George W. Bush about his role in providing the initial lifeline to GM and Chrysler:
“I’d do it again,” Mr. Bush said of the rescue in a recent speech. “Sometimes circumstances get in the way of philosophy.”
We need more conservatives who recognize when pragmatism should trump ideology.
