Alex takes issue with Romney’s New York Times article on the Detroit bailout, claiming that Romney has somehow “flip-flopped”. I think this is ludicrous. First, some quotes and commentary from/on Romney in the primaries:
Michigan native and former Massachusetts Gov. Mitt Romney offered the most extensive comments on the industry’s plight, saying the next president should have an open door to industry executives and boost spending on research into new energy-saving technology.
“It’s inexcusable that Michigan is undergoing a one-state recession,” Romney said. “There’s a lot we can do to strengthen Michigan, and in some respects what Michigan is seeing, the entire nation is going to see unless we take action now to get Michigan stronger.”
October 17th, 2007 Knight Rider Tribune Business News
“We need to initiate a bold, far-reaching research initiative — an energy revolution — that will be our generation’s equivalent of the Manhattan Project or the mission to the moon. It will be a mission to create new, economical sources of clean energy and clean ways to use the sources we have now. We will license our technology to other nations, and, of course, we will employ it at home. It will be good for our national defense, it will be good for our foreign policy, and it will be good for our economy. Moreover, even as scientists still debate how much human activity impacts the environment, we can all agree that alternative energy sources will be good for the planet. For any and all of these reasons, the time for energy independence has come.”
July/August 2007 Foreign Affairs
He offered proposals to ease mileage standards, to lighten automakers’ burdensome employee health care obligations and to “make a fivefold increase — from $4 billion to $20 billion — in our national investment in energy research, fuel technology, materials science and automotive technology.”
USA Today, January 16, 2008
“From legacy costs, to health care costs, to increased (fuel economy) standard costs, to the cost of embedded taxes, Detroit can only thrive if Washington is an engaged partner, not a disinterested observer,” he said….
While saying he wasn’t proposing a bailout, Romney proposed a five-fold increase – to $20 billion – in federal funding for energy research, fuel technology, materials science, and automotive technology.
He vowed to get rid of burdensome regulations, taxes and litigation costs that hurt automakers and other businesses. He said he would work on “legacy” health care costs as well, but didn’t offer details.
He said he would make the tax credit for research and development permanent. He said he would ensure that trade deals don’t hurt automakers or other U.S. businesses.
He also criticized Washington for the recent fuel economy hike that President Bush signed into law.
“Washington also has to stop loading Detroit down with unfunded mandates…. Discontinuous CAFE leaps, uncoordinated with the domestic manufacturers, and absent consideration of competitiveness, kills jobs and imperils the entire industry,” he said.”
Detroit News, January 15th 2008
Now, from his new article:
It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the embedded tax penalties that favor foreign carmakers….
It’s hard to understand how this is viewed as a flip-flop, and Alex’s comments on the matter give us no real insight into the matter. He’d have us believe that because Romney said, in January, that Washington hadn’t “done much” for Detroit, it’s now inconsistent to oppose an attempt by Washington to help Detroit. Or something. Romney specifically notes that the automakers are reasonable to ask Washington for help; he simply opposes this particular means of “help”. As the Detroit News article, from January, notes, Romney made it clear that he wasn’t proposing an automotive industry bailout. Alex’s more specific criticisms are similarly misleading. He writes:
While offering a $20 billion aid package specifically to the auto industry. He’s still dropping the $20 billion number, but he’s doing it in a very tricky manner: what he’s proposing now and what he proposed before are not the same package. Pretty slick, and psychologically savvy.
But, this isn’t true, as even a cursory examination of Romney’s actual words-and the reports on those words- indicates. Here were Romney’s exact words, from the Detroit Economic Club speech:
[We need to] make a fivefold increase — from $4 billion to $20 billion — in our national investment in energy research, fuel technology, materials science and automotive technology.
Here are his exact words on the topic today:
[We should invest more] on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today.
These two statements are substantively identical; they use nearly identical rhetoric. It’s true enough that Romney’s critics accused him of pledging the 20 billion specifically to the auto industry- certainly Alex felt that way- but the charge is just not merited on the facts. Romney was proposing, and continues to propose, broad increases in research and development, particularly in the energy field. I won’t deny that Romney went out of his way to emphasize how this program would help the automotive industry, when he was campaigning in Michigan, but it was never geared specifically towards that industry as the quote above indicates. Alex further writes:
And furthermore, he’d rather see a managed bankruptcy than fight for every job and “take burdens off the back of the auto industry.”
Again, it’s hard to know what to make of this. It’s impossible for me to understand how he could have read Romney’s New York Times piece, and come to the conclusion that Mitt was backing away from his pledge to “fight for every job”. Romney’s article is centered around the notion that a “managed bankruptcy” will preserve jobs more effectively, precisely because the industry cannot sustain its current model. For Romney, a bailout of this nature will, far from preserving jobs, ultimately end them by ensuring the automotive industry’s collapse.
His contention that Romney no longer wants to “take the burdens off the auto industry” is similarly puzzling. What does he suppose Romney means by quotes like: “insurmountable labor and retiree burdens” or “First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers” or That extra burden is estimated to be more than $2,000 per car”? What can Romney mean when he insists that “embedded tax penalties” must be lifted? It requires, I think, willful malice to interpret Romney as somehow inconsistent on this matter. He’s been saying the same thing, sometimes with the exact same phrases, for months now.
November 19th, 2008 at 3:07 pm
Thanks, Matthew. Once again, we are on the same page – I was going to pen something very similar to this but you beat me to it.
Alex, you still have some growing up to do, bro.
November 19th, 2008 at 3:24 pm
Hotair.com has a great video of Romney explaining his proposals on MSNBC
November 19th, 2008 at 3:27 pm
Good job Matt!
The fact is that Detroit’s labor cost per employee runs $73 an hour, while foreign automakers costs in Southern, non-union plants, consistently run below $50 an hour. How could Detroit possibly compete? Romney is well aware of this dilemma and wants to take steps to save the American auto industry from extinction. He’s been totally consistent, and every plank in his platform makes sense, and is, indeed, absolutely necessary. Right now America is sending hundreds of billions of dollars overseas for oil and foreign-made vehicles, which is money that we could keep right here at home if Romney were to get his way. In the process, we would create literally millions of new jobs; and for this, he incurs abuse from those who lack vision.
November 19th, 2008 at 3:30 pm
Thanks Taylor, that video was really good.
November 19th, 2008 at 3:36 pm
Now this is an issue Mitt has definitely not flip flopped on and one where his expertise clearly shines.
His vision of how corporate american should be is spot on.
Anythign Alex writes about Romney just lights the ignore button in my mind. We all know why he hates Romney.
November 19th, 2008 at 3:44 pm
Thanks for showing the record. The record clearly speaks for itself.
November 19th, 2008 at 3:47 pm
I just read this op-ed this morning and I was thoroughly impressed as an economist myself. The auto industry doesn’t need more money from the government as that is simply the band aid. They need a new direction and a new plan. Romney’s ideas on the matter are way way better than those of the liberal in congress.
November 19th, 2008 at 4:08 pm
Thanks for such a cogent well documented response to Alex’s assertions. Nice job!
the back and forth on the issues and candidates is why I love this site
November 19th, 2008 at 4:36 pm
I just watched Mitt on Neil cuvuto, a pretty long segment, and recorded it. He says that bankruptcy is not imminent, but a restructuring, involving wage and benefit concessions will be.
November 19th, 2008 at 4:50 pm
Thanks for pointing this out matt.
Like I said earlier, Alex was more eager to write the headline than to really think through this.
November 19th, 2008 at 5:10 pm
#10. Problem is that Alex has an agenda and thinking would get in the way of that agenda.
November 19th, 2008 at 5:14 pm
Let me explain why Alex views this as a flip flop:
In January, Mitt said he wants to fight for every job (meaning he wants Detroit to win!)
Now he’s saying he wants Detroit to go bankrupt (meaning he wants them lose!)
Classic Romney flipflopery. Duh.
November 19th, 2008 at 5:15 pm
If only the world were as simplistic as G thinks it is, none of us would have to research our votes!
November 19th, 2008 at 5:26 pm
Great post! My sentiments exactly.
November 19th, 2008 at 5:39 pm
#12 G, what the …???
November 19th, 2008 at 5:44 pm
#15, that’s how i think Alex views this.
Mitt used to say he was going to fight for every job, now he wants bankruptcy, which means he wants everyone fired.
It sounds as dumb to me as it does to you, but go read his post.
November 19th, 2008 at 5:54 pm
Sorry G, didn’t get you at first.
November 19th, 2008 at 6:13 pm
G,
Where did Romney say he wanted everyone fired?
What bankruptcy allows the Big Three to do is get out from under those massive, unworkable union contracts. These are the contracts that add $2000 to the price of every car. So if you are choosing between a Ford sedan and a Toyoto sedan, Toyoto can put $2000 worth of extras into your car for the same price as the Ford.
No job needs to be lost. They won’t have nearly the benefits that they used to, but at least the workers will have a job.
Are you opposed to that?
November 19th, 2008 at 6:45 pm
G is superficial and silly. Romney says bankruptcy is the only way to save jobs from being lost. He doesn’t want them to lose. Only a closeminded fool thinks that way.
And Alex…well, wasn’t he a Huckabee guy? Huckabee won’t let up on Romney, why should his chief apologist? And why with so many losers in that primary there is only one who acts like a poor sport bashing his competition and those who endorsed them? Alex and Huckabee need to rise above the petty differences that matter to no one but them.
November 19th, 2008 at 7:15 pm
The GOP needs to vociferously oppose any bailout or loan to the auto industry – let the free markets prevail.
November 19th, 2008 at 7:49 pm
kids,
It appears that G was trying to get inside the head of Alex. Lori, Alex never supported Huckabee.
November 19th, 2008 at 8:22 pm
GREAT JOB MATT
November 19th, 2008 at 8:33 pm
Very thorough explanation… I’m convinced
November 19th, 2008 at 9:32 pm
Well, just for the sake of breaking up this Mitt Romney lovefest and a 23 post group hug, you all should know that Mitt Romney wears a diaper on weekends and prances around at night in a French maid costume.
Just thought you’d like to know…….
November 19th, 2008 at 10:17 pm
MWS.#24,
Well then that must mean he has your vote, right?
November 19th, 2008 at 10:29 pm
marK,
Not until he flip flops on Huggies vs. Pampers.
November 19th, 2008 at 11:18 pm
Can we all get together and vote Alex off the island?
November 19th, 2008 at 11:28 pm
Nate G,
I’m kind of upset that no one has suggested I get kicked off the site yet. I need to write more wildly incendiary posts. I thought the “I’m in Favor of Affirmative Action” post would rile people up, but everyone seemed to agree.
November 19th, 2008 at 11:43 pm
Matthew,
I must not have read that one (sorry).
Maybe you could write a post in favor of a single payer health care system. I’m sure that would shake up the hornet’s nest.
November 20th, 2008 at 12:31 am
Alex, you still have some growing up to do, bro.
I like how every time I disagree with someone, they accuse me not of being incorrect, but of needing to grow up, as if only wild immaturity would lead someone to dislike Mitt Romney. It’s as absurd as Kristofer’s everyone-that-dislikes-Palin-is-sexist tripe.
I’m kind of upset that no one has suggested I get kicked off the site yet.
It’s an elite club. DaveG, Kristofer and I are its members right now. You can do it, Matthew!
November 20th, 2008 at 12:32 am
Wow, I love how all of the Rombots assume I’m some kind of Huck-a-bot.
Have they been paying attention to anything I’ve written over the past week? Or do they just click CTRL+F and search for the word ROMNEY when they come to this site?
November 20th, 2008 at 12:33 am
And Alex…well, wasn’t he a Huckabee guy? Huckabee won’t let up on Romney, why should his chief apologist? And why with so many losers in that primary there is only one who acts like a poor sport bashing his competition and those who endorsed them? Alex and Huckabee need to rise above the petty differences that matter to no one but them.
Now I’m Huckabee’s chief apologist. That’s among the funniest things I’ve ever heard!
November 20th, 2008 at 8:31 am
All I can say on this is that the Michigan TV news has blasted him on this. He can write off Michigan and possibly Ohio for these comments.
November 20th, 2008 at 12:44 pm
The gas prices this past year have seriously damaged our economy and society. We must get on with becoming energy independent.We can’t take another year like this past. Jeff Wilson has a wonderful new book out about the energy crisis and what it would take for America to become energy independent. It covers every aspect of oil, what it’s uses are besides gasoline, our reserves, our depletion of it. Every type of alternative energy is covered and it’s potential to replace oil. He even has proposed legislative agenda’s that would be necessary to implement these changes along with time frames. This book is profoundly informative and our country needs to become more informed and move forward with becoming energy independent. It is called The Manhattan Project of 2009 Energy Independence NOW. http://www.themanhattanprojectof2009.com
November 20th, 2008 at 3:28 pm
Just the facts, Ma’am. Facts are pesky things, some best understood in complete context. Thanks for the (more) thorough and objective treatment, Matthew.
As we find ourselves reeling after this election, one of the biggest reasons, in my mind, is that Republicans couldn’t find pithy ways to distill a cogent message for a popular audience. I won’t go into the ludicrous “Drill, baby, drill” spiel, but the opposition’s nebulous “change” mantra, though effective on the stump, is not turning out to mean much as most of the candidates for Obama’s cabinet are Washington insiders or longtime party loyalists. Not much new blood in that labor pool. Change connected on an emotional level, not on a substantive policy level.
But as we dissect this one issue, the domestic auto industry, we see how well-thought out and nuanced Romney’s positions were, way back at the beginning of the year, and how none of us really truly grasped the depth of his policy stances on matters economic. If running large companies was easy, more would be successful. The real reason all the other candidates feared Romney (on both sides of the aisle) was not his political skills (lackluster, but improving), or his speaking ability (powerpoint policy wonk, if you like that stuff, but few do), it was his intelligence and acumen and track record of success – actually getting things done. So where he came up short as a campaigner, as an executive, he would have been unmatched.
So this is the biggest failing that we need to overcome in 2012: how to package real solutions for mass marketing to an illiterate and uneducated (disinterested) consuming public (Joe the voter). We need a candidate with the skills, background and intelligence but also the political savvy to connect emotionally to a broad swath of the electorate in truly Reaganesque fashion.
My two cents. Great post! Let the deconstruction of 2008 and reconstruction for 2012 continue…
November 28th, 2008 at 11:02 am
What if the big 3 go under? I work for a large government fleet as a mechanic. Our fleet is all Ford , Dodge and Chevrolet. We are due to replace these vehicles in the last quarter of 2009. Could you imagine if we had to buy 2300 Toyota’s. It would not seem right.
I would also like to state that I support the unpopular car Czar Idea. As long as it is someone who the automotive industry respects like Lee Iaccoca! Imagine a new 2009 Carol Shelby Limited edition Hybrid K-car! Tell me that would not bring buyers back to the show rooms.