Let Detroit Go Bankrupt

In November 2008, Mitt Romney wrote an Op-Ed for the New York Times about the ongoing crisis with which American auto manufacturers were dealing. In it he argued against the government bailing out the car companies, and said that they should be made to restructure instead. If, he said, they would get bailed out, “you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.”

While the content of Romney’s Op-Ed was all about allowing the auto industry to free itself from the shackles of years of bad management and bad labor deals, the editors at the New York Times gave it the title “Let Detroit Go Bankrupt.” This was technically true — Romney advocated a kind of managed Chapter 7 bankruptcy which would cut close to $2,000 from the cost of each car, making it easier for Detroit to compete with Asian cars. What it sounded like, however, was that Romney was advocating liquidation of the very companies he was trying to save. That title would cost him dearly in the 2012 election.

Four years later, when Romney challenged Obama for the presidency, Obama used the false impression the title gave to take swings at Romney. Contrasting his bailout with the phrase “Let Detroit Go Bankrupt” from Romney, Obama was able to successfully demonize his opponent and, in a weekly address, went so far as to say, “We refused to throw in the towel and do nothing. We refused to let Detroit go bankrupt. We bet on American workers and American ingenuity, and three years later, that bet is paying off in a big way.”

Fast-forward to this past week, when the city of Detroit filed for what would be the biggest municipal bankruptcy in American history. Republicans have been quick to point at this as a vindication of Romney and an indictment of the president. Democrats have been just as quick to point out that such an argument is a conflation of Detroit, the city and Detroit, the auto industry. The truth, however, lies somewhere in the middle.

Ingham County Circuit Judge Rosemary Aquillina (a liberal) tried to stop the filing on Friday, ordering that Governor Snyder and Emergency Manager Orr pull it back. While they appealed this decision, it is worthwhile to note that when she handed down her order, she told Assistant State Attorney General Brian Devlin, “It’s also not honoring the [United States] president, who took [Detroit’s auto companies] out of bankruptcy.” Putting aside the sheer absurdity of that statement, if the two aren’t related, why would a liberal judge make the same “mistake” the president’s foes are making?

The president, when touting his success dealing with the auto industry, wasn’t using it to make a narrow point. Statements in his ads included a woman saying, “As a Detroiter, obviously Mitt Romney doesn’t care about me,” and “My community is healthier as a result [of the bailout],” painting Romney as an uncaring rich man who doesn’t care about blue-collar workers. This strategy ultimately was what cost Romney the election.

A Public Opinion Strategies exit poll of the 2012 election showed that while Romney outperformed Obama in three of the four categories most important to voters when deciding for which candidate to vote, he was soundly trounced in the fourth. Romney won in “vision for the future,” “shares my values” and “strong leader.” The president won “cares about people like me” by a resounding 81–18 margin. That amazing margin proved to make the difference in the election.

The Obama campaign, however, didn’t just stop at the auto industry. That is why it is fair to use the president’s words then to criticize him now. In an ad that aired in the battleground states of Michigan, Ohio and Wisconsin, Romney’s words were used to define him as someone who doesn’t care about Detroit, the city — not just the auto industry. In the ad, a worker says, “To let the automotive companies fail in Detroit is to let Detroit fail completely,” while another points out that without the bailout, “… the independent businesses … the economy would’ve been devastated.” The strategy was to make Romney look like someone who doesn’t care about blue-collar and middle class cities, not just industries and workers.

That is why the liberal Judge Aquillina wants to stop this from happening. It actually is an indictment of the president and his policies in not allowing the auto industry to save itself from itself. The handicaps that still inhibit it continue to have deleterious effects on the entire city.

And just like four years ago, the correct course of action is the practical one. Judge Aquillina needs to come to terms with what she already understands. Mitt Romney was right, and President Obama was wrong. We need to let Detroit go bankrupt — and “Detroit” means both the auto industry and the city.