McRomney Sad that Autoworker Retirees have Healthcare while Millionaire Bondholders Took a Bath

February 14, 2012

In an astounding op-ed piece appearing under the strange title, "The Son of Detroit," McRomney continues on a strangely self-defeating path of saying he is one with the local folks - Michigan residents - while dissing the very recovery that has saved their state from total collapse. Who the heck is running his campaign? Sarah Palin and Christine O'Donnell? Thank goodness for small favors!

The Huffington Post details the strange twists and turns of his basically anti-worker, anti-retiree screed - which clearly suggests it would have been far better for Chrysler bond-holders to have fully collected their higher share of a bankruptcy payout - while canceling the health care for nearly half a million UAW retirees. By constantly using terms like "union bosses," McRomney continues to distort the relationships between workers and their union brothers and sisters. Imagine how great those UAW retirees would feel without their union's determined efforts to save their long negotiated and promised health care? Not so great I'd suspect.

McRomney both argues for and against "managed bankruptcy," the process whereby an ailing company goes into bankruptcy protection while trying to reorganize. In the case of Detroit and the whole auto industry - President Obama did something brave and visionary - which saved this industry from complete collapse. Private enterprise did not step in - though they were offered many chances to do exactly that. The taxpayers and the federal government were the only ones able to save this industry on the brink of disaster and the further loss of millions of jobs in collateral damage from the fallout of the automaker's collapse. A Republican like McRomney in the White House means disaster for working people - plain and simple.

So Romney had to be very specific in his piece for the Detroit News about why he's up in arms about the managed bankruptcy he urged and the overall outcome he applauded. It all boils down to a class argument. He's angry that "secured creditors" had to take a haircut, while the workers under union contract did not lose their pensions or health care benefits. Non-union workers did lose in the deal, which to my mind is a good argument for unionization. If Romney had his way, no one's pensions or insurance would have survived. (Romney glosses over this, because the voguish thing to do these days is to get one group of have-nots riled up and angry at another group of the same -- see also: Wisconsin.)

As Wheeler points out, though, the idea underpinning Romney's op-ed amounts to a "stick up for the one percent" argument:

He’s complaining, of course, that VEBA (the trust fund run by professionals that allowed the auto companies to spin off contractual obligations–retiree healthcare–to the unions) got a stake in Chrysler while Chrysler’s secured creditors took a haircut.
So, in part, he’s basically complaining that the bailout preserved the health care a bunch of 55+ year old blue collar workers were promised. He’s pissed they got to keep their health care.
He’s also complaining that banks took a haircut, as would happen in any managed bankruptcy.
But it’s more than that. He’s complaining that a bunch of banks that themselves had been bailed out had to take a haircut. He’s complaining, for example, that JP Morgan Chase, Chrysler’s largest creditor at the time and the recipient, itself, of $68.6B in bailout loans, had to take a haircut on $2B in loans to Chrysler.
Romney now demands that "the Obama administration needs to act now to divest itself of its ownership position in GM." But elsewhere in the piece, he argues that the "shares need to be sold in a responsible fashion and the proceeds turned over to the nation's taxpayers." These two demands are incongruous. Per Justin Hyde, at Motoramic:

If the Obama administration sold its 500 million shares in GM today, it would lose at least $14 billion. GM shares have struggled even as the company reported strong profits, in part over concerns about an underfunded pension plan. If GM shores up its pension costs, its shares could rise — although they would need to nearly double before the government broke even.
There's ample factual reasons to criticize the bankruptcies — from the treatment of Delphi's retirees and GM's unsecured bond-holders to the advantages GM, Chrysler and Chrysler's new parent Fiat gained over Ford. But doing so requires acknowledging that Obama's decisions, including his call to save Chrysler when some advisors were ready to let it go, were mostly right: GM and Chrysler came out stronger and leaner, keeping jobs in the country that would have disappeared if they'd gone out of existence.
And Romney is the candidate who understands the economy and finance and how jobs are created? Compared to that argument, his "son of Detroit" label actually seems like less of a stretch.
To read the whole article go here: