For Obama, Auto Bailout Goes from Unpopular to Populist

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A year ago and a half ago – October 2010 -- I was in Jackson Michigan, an hour's drive on a long flat plain due west of Detroit, in a county that is evenly split between Democrats and Republicans.  The auto industry looms large in Jackson, as it does in much of Michigan.  Almost everyone seems to work in the industry or have family that does – or did.

One of the things I’d come to find out was how the auto bailout was playing in Jackson.  Even then, the White House had been laboring mightily to  argue the virtues of the bailout, sending out report after report about auto industry jobs that had been saved by the deal.

But it wasn’t selling.

That month, I met Linda Webb, who was working at Target. She practically spit teeth at the thought of the bailout. “I feel they should’ve gave the people the money to spend to keep the companies going,” she told me while pushing her grocery cart out of the local Walmart super market. “But they did it the opposite. They gave it to all the big people that didn’t need the money. If they handed me money like they handed them, I could’ve went and bought a car — it would have kept them in production.”

Tough. In the fall of 2010, saving a big company turns out to have stirred up a populist sentiment against that very thing.  The auto bailouts didn’t seem to be worth much electoral coin.

That shouldn’t have been surprising -- as the New York Times has reported, in early 2009, 3 out of 4 Americans didn’t think Washington should help the automakers.  Six in 10 opposed the bailouts once they happened.

But, as a Pew poll last month found, those numbers have practically reversed, with Americans saying the bailouts were mostly good for the economy, by a 56 to 37 percent margin.  The industry's now in the black, and -- most importantly -- people are going back to work.

This is hugely significant for the Obama Biden 2012 campaign in the key swing states of Michigan and Ohio, and they’ve seized upon it.    There isn’t a speech on the economy when President Barack Obama doesn’t invoke the bailout, and mention the 55 mpg targets cars will reach by next decade.  It’s become of meme for Obama.  An improved, energy-efficient car, for an improved energy-efficient economy.

This month, the campaign stepped it up even further.  On March 14, a press release landed in my inbox from the Obama Biden campaign with the headline “Strong growth in auto industry drive job creation across the state of Ohio.  New report illustrates the importance of the auto industry for middle class families.”    Since most of the reports on this have come from the White House, it was striking that this had now leaped to a purely campaign argument.

A day later, Biden himself took this show on the road. Sounding about as fired up as he’s been since 2008, and speaking to a crowd of enthused autoworkers, Biden stuck it to the Republicans. Referring to a now-infamous op-ed penned by Mitt Romney “Let Detroit go Bankrupt.” Biden said “What’s really bankrupt is the economic theories of Gingrich, Santorum and Romney,” adding: “We’re about promoting the private sector they’re about promoting the privileged sector.”

President Obama himself traveled to Michigan on the day of the Republican primary last month to fairly chortle over GOP woes -- both Romney and Santorum were having trouble jumping their opposition to the bailout.

Of 2009, the President said:  "The heartbeat of American manufacturing was flat-lining and we had to make a choice.  With the economy in complete free fall there were no private investors or companies out there willing to take a chance on the auto industry.  Nobody was lining up to give you guys loans.  Anyone in the financial sector can tell you that."

"So we could have kept giving billions of dollars of taxpayer dollars to automakers without demanding the real changes or accountability in return that were needed — that was one option. But that wouldn’t have solved anything in the long term.  Sooner or later we would have run out of money.  We could have just kicked the problem down the road.  The other option was to do absolutely nothing and let these companies fail.  And you will recall there were some politicians who said we should do that."

Then came the boos.

In 2008, Obama did so well in Michigan that John McCain gave up campaigning there.  In 2010, Republicans swept.  But in 2012, the bailout has proven so successful that it's become a mandatory talking point.

There are, as pundits like to note, plenty of caveats for Obama in Michigan and Ohio.  But one thing is clear.

The Obama White House bailed out a giant industry.  And in so doing, gave it self a populist argument that may prove one of its most powerful this year.

How the worm turns.