RSS Feed MenuAny stick will do to beat a dog, goes the old saying, and the same rule seems to apply to the 43d president.
Megan McArdle has been doing a fantastic job covering the auto crisis, among the very best anywhere, but this latest blogpost of hers seems massively unfair to George W. Bush:
Austan Goolsbee recently complained on television that they’re only embroiled in the auto mess because the Bush administration “kicked the can down the road”. Keith Hennessy, who was in the Bush administration, says that’s not quite how it happened: the administration proposed a more definitive resolution process, but the Obama transition team, which wanted more control over the process, declined.
It seems to me that the Bush administration could hardly have resolved things any more quickly than they did; restructuring a company takes time. Nor did they have much political scope for bold action. But perhaps my old professor was voicing my secret suspicion: that the Bush administration only gave the automakers loans because they wanted to leave the incoming Democrats with an ugly, expensive, mess on their hands. If Bush had had a few more years in office, he might simply have let the automakers fail. But this way, he kept Michigan competitive, and forced the Democrats to spend huge, unpopular sums on a fairly naked bailout of a key labor constituent.
Now consider the implied alternative here.
The request for federal aid for GM, Ford and Chrysler is presented Oct. 30, 2008, by the auto state governors, led by Michigan’s Jennifer Granholm.
It is Nov. 7, 2008, when GM declares it is heading for insolvency.
The car companies themselves ask for a bailout on Nov. 18.
Is it suggested that the outgoing administration of George W. Bush – an administration that had just been repudiated at the polls on a scale not seen since 1980 – should have made the bold decision to kill the Detroit companies then and there, foreclosing options for the new president? Seriously? Can you imagine what the reaction among Democrats would have been? And for once – rightly so.
Megan believes that GM should have been allowed to fail. I agree. So probably did George Bush. But he had the grace to appreciate that this was not a decision for him to make at this point in the political cycle. He extended the Detroit companies enough credit to sustain them until the new administration arrived. If this new administration finds that responsibility uncomfortable, it says more about them than it does about George Bush.
And by the way: Do please notice that the timeline here shows that the major decisions were all made after election day. Besides, Michigan was never going to be competitive in 2008, and no Republican decision-maker ever imagined otherwise.
Bulldoglover100 // Jun 8, 2009 at 9:19 am
I think your missing the point David. Bush choose not to do anything and apparently felt the decisions that would have to be made would be unpopular so he left them to Obama. Bad call on his part because Bush still got the blame. You can parse the months all day long but the fact remains that this country melted down under Bush and no one but the GOP believes any differently…thats why our numbers are in the far regions of the sewer.Bush should have handled it and let them fail. At least he would have been supporting the ideology he says he believes in regading conservatives….so 2 strikes for his Presidency. One for the mess to begin with and now one for leaving the country to someone he knew would take it into debt.
balconesfault // Jun 8, 2009 at 9:27 am
I always fall back on a simple decision tree when evaluating Bush Administration decisions – which side of the decision would make more money for the wealthy in America?Whether or not Bush was a true conservative is something that will be debated for a long time. Whether his administration embodied some of the worst aspects of crony capitalism seems beyond question. It was the rot that corrupted even his best intended programs and policies.
sinz54 // Jun 8, 2009 at 9:41 am
balconesfault: How would Medicare Part D (pushed through Congress by Bush) “make more money for the wealthy”?Or the No Child Left Behind Act, also pushed through Congress by Bush?Or PEPFAR to fight AIDS in Africa?I think you have Bush all wrong. Of course Bush favored the private sector most of the time–he’s a conservative. I favor the private sector most of the time too, yet it doesn’t make me any money to do so.But Bush was not averse to taking steps that weren’t free-market steps. Like expanding Medicare, or education reform, or TARP.
balconesfault // Jun 8, 2009 at 10:31 am
Medicare Part D created a huge new federal stream of money to the drug and insurance companies – and for good measure, added in the proviso that the federal government couldn’t use their buying power to force drug costs down.NCLB forced standardized testing into being a metric for every school district in America. Standardized testing is a cash cow, and selling software to school systems to help their students perform better at standardized testing (for example NCLB money was being spent by many districts for the Ignite! Learning package – sold by Neil Bush).I’ll give you the PEPFAR program.TARP wasn’t a free-market step – but it certainly pumped a lot of taxpayer money directly into the pockets of some very wealthy people.
sinz54 // Jun 8, 2009 at 5:30 pm
balconesfault: Oh, brother. Virtually *any* Government spending program is going to create a “huge new federal stream of money” to private business. You give out welfare checks, and families are going to spend them at supermarkets. You give out Medicare itself, and the elderly and disabled are going to spend it at doctors and for-profit hospitals. As long as we live in a mixed economy, money dispensed from the Government is going to find its way to private business eventually.But Bush chose to spend the money on a Medicare prescription drug benefit for seniors, as opposed to the direct subsidies to Enron and the banks that Phil Gramm and the Clintonites were doing in the 1990s. Bush chose to do NCLB to raise the standards of public schools, not to just hand great gobs of money to private schools. And Ted Kennedy worked with Bush on NCLB–was Ted Kennedy also trying to give handouts to private companies?Believe me, there were plenty of other things that conservatives would have done with the hundreds of billions of dollars spent on Medicare Part D and NCLB.
Garett Jones // Jun 8, 2009 at 9:01 pm
I thought that in the real world of politics, the lame duck period between election and inauguration is the *perfect* time to make politically difficult decisions….Standard DC rule of thumb: Pre-election: Pander to voters.Post-election: Think long term (or repay political favors, as needed)I suspect Bush saved GM and Chrysler because he was concerned about His Legacy ™. Ultimately, he decided that since liberal professors write the history books, he didn’t want the last chapter of every Bush bio to be entitled, “Bush’s Path of Destruction: Iraq, New Orleans, Detroit.” For decades, taxpayers and car buyers will suffer the consequences of Bush’s quest to improve His Legacy.
balconesfault // Jun 8, 2009 at 10:33 pm
“Believe me, there were plenty of other things that conservatives would have done with the hundreds of billions of dollars spent on Medicare Part D and NCLB. “I’m not doubting that. Which is why I don’t believe that Bush generally acted out of any ideology other than dancing with them that brung him, as we say down here in Texas.