Jason Linkins in his weekly Sunday Talking Heads live blog, did a nice job of summing this portion of Ed Gillespie's appearance on Fox News Sunday up, where Gillespie was trying to explain Mitt Romney's opinion on the bailout of the auto
June 3, 2012

Jason Linkins in his weekly Sunday Talking Heads live blog, did a nice job of summing this portion of Ed Gillespie's appearance on Fox News Sunday up, where Gillespie was trying to explain Mitt Romney's opinion on the bailout of the auto industry:

Wallace moves to Romney's opposition to the auto industry rescue. Again, Wallace has done his homework, pointing out that the current Republican governor of Michigan supported the rescue and has pointed out that Romney's weird explanation for how it came to be that he simultaneously opposed and supported this rescue does not make sense -- Rommey says he wanted a "managed bankruptcy" and has insisted from time to time that what Obama did was not a managed bankruptcy, only to say on alternate weeks that it was a "managed bankruptcy" and that Romney will "take a lot of credit for it."

There's only one salient difference between Romney and Obama's position -- Romney seems to think that private money should have been used and was available to manage the bankruptcy. The White House position was that private money would have OBVIOUSLY been preferable, but there was, as you could imagine, nobody who was particularly hot to pony up the scratch. So the federal government did, after the executives successfully jumped through a bunch of hoops. If we're being honest here, Romney played his hand back when it was still uncertain that the auto rescue would work, his gamble didn't pay off, and now he's having to spit a bunch of circuitous garbage about it to keep from simply admitting he was wrong.

It seems to me that he'd actually be better off if he just conceded the Detroit bailout to Obama, like Michigan's governor has, and just move to another point of critique. But in for a penny, I guess?

Gillespie doesn't have much of an answer, except to say that there was a debate and many people had different point of view. Gillespie says that a managed bankruptcy was Romney's idea. Wallace says, sure, but not with public money. Gillespie says that it's still a managed bankruptcy. Wallace counters, saying that doing it Romney's way would have actually led to a Chapter 7 liquidation. And around and around. "I understand that is an opinion," Gillespie says. He says that Romney's "belief" is that a private bailout would have been better. He thrusts his fists against the posts and still insists he sees the ghosts.

Gillespie eventually gets around to being slightly more honest -- Romney believes that the bondholders who made terrible investments in these companies should have been bailed out ahead of the middle class people who built the cars. That's really the only worthwhile thing to remember from this discussion.

Transcript via Fox below the fold.

WALLACE: As you know, we're talking in the next segment to Steven Rattner, who was former car czar. One of the biggest knocks against Romney is that he opposed the government bailout of G.M. and Chrysler.

The Republican governor of Michigan says if you hadn't had the government bailout there was no money coming from private investors. No money coming from banks -- this is during the financial meltdown during 2008. If you hadn't had the government bailout that these companies, G.M. and Chrysler, would have gone into a long-term liquidation and been in bankruptcy for years. Not the quick managed bankruptcy they had with the government bailout.

GILLESPIE: Well, I remember this debate pretty vividly and the fact is there were conflicting points of view both on Capitol Hill and in the White House at the time and then when President Obama came in and did essentially the managed bankruptcy that Governor Romney had called for.

WALLACE: I know. But he hadn't called for government money.

GILLESPIE: He called for a managed bankruptcy.

WALLACE: Without government money.

GILLESPIE: That's right.

WALLACE: And the point that Rattner will make there was no private money so if you hadn't had the government money, it would have gone into Chapter 7 liquidation.


WALLACE: The company would have been in bankruptcy for years and it would have to lay off all their workers.

GILLESPIE: Chris, I understand that that is an opinion. There are different opinions as to whether or not that could have been done. I know there were different opinions at the time and I know the decision was made this is the way it has to be done.

Governor Romney's belief and the belief of many other people is that we would have been better off if we had gone through a managed private sector bankruptcy. It wouldn't have had, for example, the unions having been given especially control over the auto companies and put in front of the line over bondholders. You would have had, I think, more of a restructuring that may have made the companies even viable over the long-term than today. But this is -- but there are different opinions on this, there's no doubt about it. Governor Romney's view is managed bankruptcy would have been the right way to go. They ended up going a similar route at the end of the day anyway. But there's no doubt, there is difference of opinion.

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