If you’re looking for an expert in revisionist history, look no further than former Governor Jennifer Granholm (D). For the past several months, Granholm has been trying to erase from people’s memories the economically-destructive record she left behind in Michigan. And now, Granholm is trying to rebuild the image of the equally unpopular government bailouts of General Motors and Chrysler. Neither effort is likely to successful.
Governor Granholm has been on television, in print and online for weeks now extolling the virtues of the auto bailout. On May 24, she said: “Michigan families, Midwestern families would have been left out in the cold, no job, no income, no industry.”
If there is one subject that Granholm is an expert on, it is Michigan families without jobs, income or industry. But the truth is that the government’s takeover of two automakers did not save Michigan, and also, Michigan is not saved, yet.
First, as Heritage’s James Gattuso points out, it was bankruptcy and restructuring, not financial bailouts, which rescued Chrysler and GM from the abyss.
Gattuso writes: “President Obama should get credit for finally forcing the two into bankruptcy in early 2009. Unfortunately, however, it was accompanied by a massive inflow of taxpayer cash, government ownership of the two firms, and a manipulation of the bankruptcy process to advantage politically favored interests (notably the unions) at the expense of shareholders.”
In August of 2010, bailout advocate Granholm said GM had paid back its loan and she celebrated Chrysler’s apparent payoff this past month. However, in neither case did the facts support Granholm’s merriment.
In November 2010, General Motors was still costing taxpayers tens of billions of dollars, not counting subsidies for the terribly unpopular Chevy Volt or other outstanding loans. To this day, General Motors has not paid back the taxpayers in full.
This past month, as Granholm lauded Chrysler’s rise from the ashes as they refinanced part of their government loan to secure lower rates (CEO Sergio Marchionne once called the American taxpayers “shysters” for the high interest rates Chrysler was paying). Chrysler actually held an event, complete with a banner reading “Paid”, to announce this step towards independence.
In reality, Chrysler still owes the government billions in loans. Even Marchionne admits as much recently assuring PBS in an interview (that included Jennifer Granholm) that taxpayers would actually be fully paid back by 2014. And just this week, the president’s own National Economic Council projected at least $14 billion in permanent taxpayer losses from the auto bailouts.
None of this even counts the billions of dollars in new loans Chrysler is still hoping to get from the U.S. government to fund retooling of plants to make energy-efficient cars. Chrysler finds retooling necessary in light of new auto efficiency standards pushed by Obama and supported by Granholm, paid for by taxpayers at production and purchase points.
Chrysler may be hanging banners and celebrating, but General Motors certainly isn’t. A GM source told The Daily Caller: “[GM’s] not hanging a ‘Mission Accomplished’ banner and [The President] shouldn’t either…GM is not in a position to declare victory.”
The auto bailouts, like Granholm’s two terms as Governor, were simply not successful no matter how you paint it. When the president is using his bully pulpit to sell cars like the Volt; fires and hires “private sector” CEOs; offers sweetheart deals to unions at the expense of shareholders and manipulates the private market and legal process, no outcome can justify these means.
And Detroit wasn’t rescued from bankruptcy by the bailouts as Granholm and other government bailout advocates may suggest. In fact, Detroit wasn’t rescued from bankruptcy period. Granholm left Michigan with double digit unemployment, the fifth-highest in the nation. Detroit itself had a shocking unemployment rate between 30 and 50 percent post-bailout depending on what statistics you use.
Granholm continually put liberal philosophy over Michigan’s well-being, pushing for policies that hurt business growth and drove out investment. In 2007, the satirical newspaper The Onion published an article entitled “Thousands Lose Jobs As Michigan Unemployment Offices Close” which jokingly told the story of the state losing the only jobs economy it had left, handing out unemployment checks. This was Governor Granholm’s true legacy, and it isn’t a joke.
Governor Granholm was so proud of her achievements in Michigan that she moved out of the state merely days after her term ended to find solace in Berkeley, California as a professor, where economic destruction such as hers is apparently lauded rather than scrutinized.
So, yes, Granholm is welcome to barnstorm the nation on behalf of massive government interventions and bailouts. But it won’t work. Governor Granholm’s approval rating was 27% in 2010. The bailouts were opposed by six in ten Americans in 2008 and 72% flatly rejected additional loans in 2009. Voters are smart enough to know when their government isn’t working. And all of the banners and barnstorming in the world won’t convince them otherwise.