Auto sales show the market working – with government help

In the April 1 (no fooling) episode of Mad Men, Governor Romney is called a clown. We’re talking about Michigan Governor George Romney, father of Mitt, a current Republican candidate for president.

Mad Men is loaded with harsh judgment, often distanced from fact or logic. The statement about George Romney may have been one such salvo. But Mitt, the son, is in a constant battle with competitor Rick Santorum for “foot in mouth” disease. Ironically, some of Mitt’s greatest gaffes have been related to the industry of which his father was a “captain” – the auto industry.

With the recent successes of the auto industry, the antiquated and archaic “solutions” that Romney has suggested over the past four years become more bizarre and at the least show Romney as a poor predictor. In April, 2012 we learned that in 2011, General Motors posted its largest profit ever, $7 billion.

Over the past two years,” America’s Big Three (GM,  Ford,  and  Chrysler) have added 15,000 more manufacturing jobs. Each of these jobs supports another nine jobs in the U.S. Workers at a number of plants are receiving profit-sharing bonuses of $7,000 for the success that they and their supervisors have had. But the success of the auto companies is possible only because of the direct involvement of the federal and other levels of government. As Massachusetts Democratic Senatorial candidate, Elizabeth Warren, has pointed out,

There is nobody in this country who got rich on his own. Nobody. You built a factory out there – good for you! But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to education. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us do.

Now look, you built a factory and it turned into something terrific, or a great idea – God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.


Romney continues to criticize the January 2009 $24.9 billion loan from the federal government to General Motors and Chrysler. Prior to the financial assistance supported by President Obama and passed by Congress, Romney penned an op-ed in The New York Times entitled “Let Detroit go Bankrupt.” He favored the private sector lending money to the auto industry but he was blind to the fact that banks and other financial institutions had virtually no money to lend in 2008-09 and that included his Bain Capital, the company that he headed for fifteen years, presumably creating numerous American jobs.

Romney is quick to criticize President Obama for rising gasoline prices. For a “thinker with vision and a global perspective,” he seems to ignore the enormous global increase in demand for petroleum products over the past several years. China and India alone are guzzling gasoline at unprecedented rates. American production of refined petroleum products is higher than it’s been in eight years. None of this keeps Romney from ignoring encouraging facts about the auto industry as they roll out almost on a day-by-day basis.

Mitt Romney has been criticized for being a “flip-flopper.” However, there are two sides to every coin. The other side of a “flip-flop” coin is an open mind and willingness to be influenced by facts; to integrate new information into one’s thinking. Because Mr. Romney has developed a persistent habit of denying that he has or is changing his mind, he short-circuits his ability to make a thoughtful, considered, deliberate change in opinion when the facts warrant such. If he can’t do that with regard to the industry that was his father’s business and to which he had a reasonable amount of exposure and presumably knowledge, then it is difficult to imagine him having the depth of thinking necessary for sound domestic thinking and secure international policies.