What others say: The bailouts worked

By Dale McFeatters

Scripps Howard News Service

Published: Thursday, Feb. 23 2012 12:00 a.m. MST

Perhaps people in Michigan are more polite and restrained than those in New York City.

In 1975, when President Gerald Ford ordained that there would be no federal assistance to save the Big Apple from bankruptcy, a local tabloid headlined, "FORD TO CITY: DROP DEAD."

In essence, GOP presidential candidates Mitt Romney and Rick Santorum say they would have followed Ford's example back in 2008 and 2009, when GM and Chrysler were heading toward bankruptcy and likely to take the Motor City with them.

The Republican candidates like to point to the bailouts as evidence of President Barack Obama's "socialism," but the idea was President George W. Bush's, and a good one it was.

Michael Gerson, Bush's chief speechwriter and senior policy adviser for five years and now a Washington Post columnist, wrote this week, "No president — Republican or Democrat — would have allowed the economic collapse of the Upper Middle West in the midst of a national economic panic."

Apparently a President Santorum or a President Romney would.

It is hard to imagine any circumstance in which the companies would have emerged "alive and equally as well, or better off, than they are now," as Santorum says, without massive government intervention.

But Santorum, who seems untroubled by doubts or second thoughts, told the Detroit Economic Club: "My feeling was that the government should not be involved in bailouts, period."

As in any bankruptcy, there was a certain unfairness. The workers came out OK — at least most of the remaining workers still had jobs; the bondholders got hammered.

Romney called it "crony capitalism on a grand scale," an odd position to take for a former venture capitalist and manager of a private equity firm.

But then all the policy choices facing political candidates are easy ones. If only presidential choices were so clear-cut.

The two auto companies have paid back most of the $80 billion bailout. Even if the government takes a small loss, that would still be a pittance compared to the economic havoc of letting the two companies go under.

The two leading GOP candidates in the Michigan primary should man up and admit that the bailouts worked, and it wouldn't hurt to give a little tip of the hat to our forgotten Republican president, George W. Bush.

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