Obama's auto industry lies about Romney
It's one thing to distort your opponents record. All politicians do it. But to just make stuff up about your adversary should be called out by the media.
Unless your name is Barack Obama and the media is your obedient lap dog.
The president has been spreading lies about Mitt Romney's position on saving GM and the auto bailout.
Both agreed on a "managed bankruptcy," meaning the government would maintain financial lines of credit, honoring contracts in bankruptcy so that suppliers would keep operating. "A managed bankruptcy may be the only path to the fundamental restructuring the industry needs," Romney wrote in a 2008 New York Times op-ed that has been willfully distorted by Obama & Media.
The distortions, however, include Michigan's industry establishment which claims Romney refused government intervention and ignored the reality that credit markets were frozen and the automakers had no way to honor supplier contracts and customer warranties. They should know better. Romney explicitly called for government to provide cash financing in the Times op-ed:
"The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk," he wrote in a line that might make some conservatives cringe.
Where Obama and Romney disagreed was on what type of bankruptcy.
Obama took GM and Chrysler into Chapter 363 - a creative interpretation of the bankruptcy code that sought to avoid the traditional Chapter 11 process so that the White House could dictate terms to favor preferred constituencies like Big Labor. The result was thuggish tactics (as reported by this scribe and largely ignored by Obama's homer media) that threatened bondholders and shorted pension investors. While Chapter 363 bankruptcy allowed the automakers to emerge quickly from bankruptcy, it was hugely controversial in the legal community.
The government is "end-running the Chapter 11 process" by structuring the bankruptcies as sales, bankruptcy expert and UCLA Law Professor Lynn LoPucki told CFO magazine in June, 2009. Chapter 363 allowed both companies to get rid of liabilities without getting approval from their creditors. "It's improper, because creditors are not getting the legal procedure allowed to them by Congress," said LoPucki, who also teaches at Harvard, and who I sourced repeatedly during the Detroit bankruptcies.
Romney supported a bailout that was far more limited, and would have treated bondholders and pension investors more fairly. Romney's plan also would have avoided the prospect of the government owning GM preferred stock.
Romney's position might make many conservatives uncomfortable, but as far as "abandoning" the auto industry, Obama is lying on his position.
Hat Tip: Ed Lasky