Romney unclear on his position over Detroit bailout
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With the Republican presidential hopefuls participating in a debate about jobs and the economy just a few miles from the city of Detroit, it was inevitable that the candidates would be asked about the federal bailout that saved GM and Chrysler — and Mitt Romney in particular.
Romney’s father was a former auto company CEO and former governor of Michigan, so when he wrote a Wall Street Journal column in early 2009 with the headline “Let Detroit Go Bankrupt” and argued against federal money being used to restructure those companies, it drew a good deal of criticism from business, labor and politicians of both parties from Michigan who supported the bailout.
During Wednesday’s debate, Romney tried not to back away from that position:
He said: “My view with regard to the bailout was that whether it was President Bush or whether it was President Obama (approving financial relief), it was the wrong way to go.”
But one of his most prominent Michigan supporters illustrates the fine line Romney is trying to walk on the issue:
Saul Anuzis, Michigan’s Republican National Committeeman and a Romney backer, said the challenge for Romney and other Republicans who advocated for a managed bankruptcy is explaining what they mean by bankruptcy.
“If you ask the average voter today … they assume the company is going to be closed,” Anuzis said. “And that’s what the Democrats are saying, which is really a blatant lie. … Bankruptcy traditionally is a form of reorganization.”
But in fact, that is exactly what the Obama administration did — used a managed bankruptcy to restructure GM and Chrysler, after which they have emerged once again as profitable and growing companies. So the difficult task for Romney is to argue in favor of a managed bankruptcy and still argue that Obama was wrong for guiding the companies through a managed bankruptcy.