The Detroit News reports that former Vice President Dick Cheney claims to have opposed the decision to bail out GM and Chrysler, writing in his forthcoming memoir:
“The president decided that he did not want to pull the plug on General Motors as we were headed out the door… Although I understood the reasoning, I would have preferred that the government not get involved and was disappointed — but not surprised — when the Obama administration significantly increased the government intervention in the automobile industry shortly after taking office.”
Cheney notes he had voted against the 1979 $1.5 billion loan guarantee for Chrysler Corp. in the House. “I had continued throughout my career to be philosophically opposed to bailing out specific companies or industries,” he wrote.
But lest you think the 1979 vote makes Cheney a model of consistency, consider his defense of the $700b TARP expenditure:
Providing sufficient support to avoid the collapse of our banking system was something only the federal government could do. But, all things considered, companies in the private sector should be judged in the marketplace. Having the government intervene was not, in my opinion, a good idea.
I’ve been thinking about the bailout era a lot recently, as GM’s stock slumps towards an inevitable and significant government loss in the near future. I’m sure that when the government finally writes off the $14b+ loss, a political knifefight will ensue with all sides seeking to justify their positions on the matter. But where will that get us? After all, both political parties bear some responsibility for the decision, and it’s impossible to say what would have happened without the bailout. And if politicians and partisans make the final chapter of the auto bailout about politics, they’ll have missed the entire point… and provide a smokescreen for the real culprits.
GM and Chrysler have to live with their outstanding moral (if not legal) debt to the American people, and all eyes should be on those companies rather than the posturing politicians. How these private firms relate to the taxpayers who bailed them out will be the defining issue of their post-bailout existence, and one that should be taken extremely seriously in Auburn Hills and the Renaissance Center. I’m not sure I can say exactly what they should do about it, but the first step is to not run from reality (as has already happened too often in the past). The final tallying of the bailout bill will be a defining moment for these two companies… let’s hope they realize it, and act accordingly.
