Tuesday, October 30, 2012

There You Go Again: New York Times Trying to Save Obama in Ohio

 In its GOP Turns Fire on Obama Pillar, The Auto Bailout, the New York Times engages in a blatant distortion to prop up Obama’s waning fortunes in Ohio. 

The Times rehashes a November 18, 2008 Romney editorial entitled Let Detroit Go Bankrupt as follows:

“Mr. Romney wrote an Op-Ed article in the New York Timesgiven the title by the newspaper “Let Detroit Go Bankrupt.’’ In the piece Mr. Romney wrote that in the event of a bailout, “You can kiss the American automotive industry goodbye.”

Notice that the Times admits it chose the misleading headline (“Let Detroit Go Bankrupt”), which served as campaign fodder for Obama for the next three years.

Anyone who bothers to read the Romney piece knows he is arguing against a federal bail out (not bankruptcy) of GM and Chrysler. A bailout would leave both unable to compete, and, indeed, you could “kiss the American automotive industry good by.”

Instead, Romney advocated a court-managed Chapter 11 bankruptcy to realign GM and Chrysler’s costs with competitors to save GM and Chrysler.  The Obama administration agreed. Obama’s car czar pushed GM and Chrysler through Chapter 11 bankruptcy proceedings. Chrysler was, in effect, sold to Fiat.  The bankrupt “old” GM’s shares became worthless, and its assets were transferred to a “new” GM owned primarily by the unions and the federal government.

The Times somehow forgot to tell its readers that Obama agreed with Romney to “let Detroit go bankrupt.”

Romney wanted a regular bankruptcy preceding to put in place  “new labor (UAW) agreements to align pay and benefits to match those of workers at competitors.” Alarmed by his UAW allies, Obama rushed to strong arm through a political bankruptcy at taxpayer expense that shortchanged bond holders, preserved union contracts and gold-plated pensions, and made the federal government the largest single shareholder.

Do not take my word: The Washington Post’s Fact Check: Letting Detroit go bankrupt rejects Obama’s references to Romney’s  wanting Detroit to go “bankrupt.”  I quote:

“This statement is drawn from a headline — ‘Let Detroit Go Bankrupt’ (chosen by the Times)— on an opinion article written by Romney for New York Times. But he did not say that in the article…Although ‘bankrupt’ often conjures up images of liquidation, Romney called for a ‘managed bankruptcy.’ This is a process in which the company uses the bankruptcy code to discharge its debts, but emerges from the process a leaner, less leveraged company.”

Confronted with this truth, Obama’s supporters can only claim: “But there was no money for a regular bankruptcy.” Yes, there was. If the federal government could throw $80 billion at the GM-Chrysler bankruptcies, it could have put up the small amount of creditor-in-possession funds required for a regular bankruptcy.

Ohio remember:  Obama’s political bankruptcy of GM did not rescue jobs. It rescued union pay and benefits.

published in forbes.com 

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