THE UNITED Auto Workers protested against Mitt Romney’s speech to the Detroit Economic Club yesterday by spelling out the headline of an opinion piece Mr Romney published in 2008 on cars parked on the roof of a multistorey garage next to Ford Field.
“Let Detroit Go Bankrupt,” the letters on the cars read.
In the run-up to Tuesday’s Michigan primary, Mr Romney has stuck doggedly to the position he took against the Obama administration’s $82 billion bailout of the automobile industry.
His chief rival, Rick Santorum, took the same position, but pointed to Mr Romney’s inconsistency: “Mitt Romney supported the bailout of Wall Street; he opposed the bailout of Detroit,” Mr Santorum said.
The business executive who introduced Mr Romney to the Economic Club described him as “a car guy”.
“I drive a Mustang and a Chevy pick-up. I used to have a Dodge truck,” Mr Romney boasted. “My wife Anne drives two Cadillacs.”
He blamed the unions for Detroit’s troubles. But nothing could make up for his original and continuing sin of opposing the bailout. Michigan has returned to economic growth because of the bailout. The bailout worked, says the state’s Republican governor, Rick Snyder. General Motors just reported a $7.6 billion annual profit.
“In my heart of hearts, I don’t believe it could have been done differently, given the lack of credit at the time and all that was going on with the automotive industry,” said Beth Chapell, president of the Economic Club that invited Mr Romney.
“People do not realise the depth and breadth of what a manufacturing job does for this country. It used to be every automotive job created 10-12 other jobs; now it’s 7-9.”
Mr Romney was in his element, surrounded by businesspeople. But applause was lukewarm. You could almost hear the audience thinking: If he got the auto bailout so wrong, why should we trust him for the rest?
The speech had been billed as the unveiling of Mr Romney’s economic programme, but the candidate had revealed the key points during the week: a 20 per cent across the board reduction in income tax for all Americans; lowering the corporate tax rate from 35 to 25 per cent (President Barack Obama this week promised to lower it to 28 per cent); ending the “repatriation tax” to give US companies an incentive to bring profits home from overseas; eliminating death duties for all, as well as capital gains and taxes on interest for Americans earning below $200,000; reducing government spending to 20 per cent of GDP and capping it there.
Mr Romney claimed his great tax giveaway would not increase deficits. “Stronger economic growth, spending cuts, and base broadening will offset the reductions,” he said.
It was the $62 trillion in “unfunded promises” – social security and medical benefits for ageing Americans – that “keep me awake at night”, Mr Romney said. He would not change benefits for those nearing retirement age, but would gradually raise the age of retirement and lower the amount of benefits.
He would also make the states – not the federal government – responsible for Medicaid, food stamps, housing subsidies and job training programmes.
Social issues such as contraception, abortion and same-sex marriage dominated the campaign in recent weeks, because of Mr Santorum’s strong stand on those issues. Mr Romney is ill at ease on that terrain, and seemed to deliberately pull the debate back to the economy.
Strangely, Mr Romney did not mention the rising cost of petrol, which is becoming a major issue. Analysts say $4 per gallon is the “tipping point” beyond which the US public grows exasperated. Prices have reached as high as $5.89 a gallon in parts of Florida.
In a speech in Florida on Thursday, Mr Obama poked fun at the Republicans, saying “Some politicians always see this as a political opportunity. You’re shocked, I know. Last week, the lead of one news story said, ‘Gasoline prices are on the rise, and Republicans are licking their chops’ . . . Only in politics do people greet bad news so enthusiastically.”
Mr Obama summarised the Republicans’ plan: “Step one is drill, step two is drill, and step three is keep drilling.”
The US has only 2 per cent of the world’s oil reserves, but consumes 20 per cent, Mr Obama said, calling for more US oil production, the development of alternative energy sources and higher fuel efficiency standards.
Ms Chappell of the Detroit Economic Club said Washington could learn a lesson in bipartisanship from Michigan, where Republicans and Democrats are working together “like we have never seen before” to grow the state’s economy. “Whoever the next president is, we really need that alignment of purpose and focus,” she said.