The Obama reelection campaign likes to talk about the auto bailout an awful lot, and the news media tends to portray it as a regional attempt to curry favor in Michigan and the Midwest. But why, then, is Obama running an ad about the auto bailout in Florida?
The answer is that the auto bailout isn’t just about appealing to people who benefitted from it, either directly or secondarily. It’s a way of assailing Mitt Romney’s economic credibility. Obama’s campaign thinks the only way Romney can win is by credibly portraying himself as able to accelerate economic growth:
… their research suggests Romney has exactly one rhetorical path to victory, as a can-do businessman able to fix what’s broken. Chicago intends to focus as much of its formidable firepower as necessary to dismantle Romney on that front and prevent the election from becoming a referendum on the President’s economic tenure.
There are a lot of ways to do this. The main one is to define Romney as protecting the interests and representing the perspective of the very rich, and, relatedly, proposing to return to failed Bush-era policies. The auto bailout is another and more concrete way to do it. Obama designed a plan, Romney insisted it would fail, and instead it has thrived. The importance of the issue, I would guess, lies not just in its effects as policies, but also what it shows about Romney’s judgment. Romney was emphatic about his prediction that Obama’s plan would result in the death of the industry, and he was wrong in an easy-to-grasp way. That’s a simpler argument to make than explaining the flaws in other arguments Romney has made. And it explains why Obama is making such a big deal about the auto bailout even though it still doesn’t poll especially well.
Now, Romney’s arguments about the auto bailout are actually a little more complex, though ultimately still wrong. Romney initially argued for private financing and the regular bankruptcy process, and he denounced Obama’s plan for writing a blank check without requiring any major restructuring. In fact, the credit markets were completely frozen, making any private-sector restructuring impossible. And Obama’s plan did impose a major restructuring.
Romney has actually clung to this latter fact to justify his own complaint. (He has taken to asserting that Obama took his advice, or even taking credit himself, for the success of the auto bailout, because Obama forced a major restructuring.) But this is both substantively misleading — it ignores both the impossibility of the private-credit solution Romney urged and the obvious fact that he had positioned himself to second-guess Obama if the bailout failed — and a politically impossible case to make. So here we are, with Obama resting a large chunk of his reelection case on a decision that few people, including those in the administration, expected at the time to be running on in 2012.