The swing states: Ohio

Coal or cars?

Will Barack Obama’s rescue of the car industry or his “war on coal” count for more in America’s most reliable bellwether?

See article

Readers' comments



Governor John Kasich ges the credit for Ohio's jobs numbers, not Obama. He has told some big, fat lies about saving the auto industry Romney did say he would be in favor of government funding after a structured bankruptcy which would have been fair for everyone, especially the taxpayers.Obama lied in the last debate to millions insisting Romney did no such thing. A recent large poll indicated the the people said they would not buy a GM car because they took a taxpayer funded bailout but instead by 75% would buy a Ford.

New Conservative in reply to Katie10

Except a bankruptcy the way he would have done it would be anything but structured. The Romney method would have involved physically closing the factories and laying off the workers while the bits of the companies were being auctioned off for non existent private cash. Only after that, would the government have been invited to step in for support. You can see the problem. It's a lot easier to close factories and lay off workers then it is to rehire them. So while it's possible the car industry would have come back, it would have been smaller with less workers and production capacity and a reduced market share due to the hiatus.

The way it actually happened, public money allowed the companies to keep the lights on and pay their workers while going through bankruptcy. This meant that while people did take cuts in pay, and some people got laid off and a few plants got closed, the bankruptcy was largely on paper and didn't have a large effect on the physical business of these companies.

The Romney method would have had public money plug the hole in their finances only after the entire business had been liquidated. aking to plugging the hole in a leaky bucket only after all the water has gone out.

Tom FarEast LA in reply to Katie10

@Katie10, you are either delusional or a paid GOP blogger.
Any knowledgeable person will underscore that Governors have but minimal impact on job creation.

Funny that you would single out "Obama lied", when fact-checkers have rated nearly every Rmoney and Ryan statement at least 1 Pinocchio. The GOP follows the Big Lie philosophy of Hitler, Himmler and Goering without a doubt - and with NO embarrassment!

If your last sentence had any Truth to it, then please explain the Sales and Profit figures GM and Chrysler have been turning in??

You must be a GOP operative. No one else could be so wrong.

I don't think you know much about bankruptcy. It does not necessarily lead to closings, layoffs, or asset sales. You would do well to study the cases of numerous household-name companies that have emerged from bankruptcy. The only parties virtually always harmed are creditors, and even they often come out better than they would have without bankruptcy.

The way it happened, public money allowed some of the auto companies to continue their losing ways until the next time the cash runs out. It was the triumph of politics over judicial rationality.

One could view it most accurately as a transfer of wealth from taxpayers to the creditor companies.

Don't worry. You still have a year or two to read up on the topic before the next time this issue comes up from the American auto sector.

Certainly bankruptcy doesn't always destroy companies, but at that time, it would have. But we're not arguing about bankruptcy, the companies did go through it as they would have in either case.

The question is whether they would have been able to keep operating through their bankruptcy proceedings without public money. Flash back to 2009, there was no private money available to keep their doors open. Without public money immediately, they would have closed the companies entirely. A far more expensive proposition for both their creditors and taxpayers.

Like any policy, there are ways it could have been done better, but withholding public money would have undoubtedly ended up worse.

This is incorrect. This is not how a managed bankruptcy in the US works. The Romney proposal was for private money to be lent to GM with the benefit of US government guarantees. Democrats have argued that the capital markets were frozen at the time and no one would have lent to GM. This is a very weak argument. At the time private investors were piling into US treasuries (ie US government issued securities). In addition, lenders to companies in bankruptcy protection have priority over other creditors. On this basis, there is absolutely no reason to think that investors would not have invested in securities issued by GM and guaranteed by the US government. GM would then have used this cash to operate its business as it worked on a restructuring plan. The point is that the business is carried on while they come up with a restructuring plan and, once that plan is approved by court, it is implemented. There is absolutely no reason to believe that a Chapter 11 process would have involved mass lay offs or closures. After all many US companies have been through Chapter 11 (eg American Airlines has been in Chapter 11 for the last year).

How many large companies went through Chapter 11 in 2009 and survived without federal money? Also, you're not actually reading the op ed.


'Excess labor' is workers, 'real estate costs' are the factories. Or as you called them, "layoffs and closures."

Also, you're missing the thing that governments can do that private enterprise usually doesn't want to do. Which is put a ridiculous amount of effort and money towards something very, very quickly.

Private money, even guaranteed would have taken time. They would not have wanted to maintain the company at it's current size or even near there. They would have cut everything but the currently most profitable lines, shrank the size of the sector and fired a lot of workers.

I think the resulting company if it survived would have been smaller and more profitable but the Midwest as a whole would have been devastated.

The direct bailout allowed the company to reform with less layoffs, less shrinkage, and over a more gradual timescale.

Thanks. In response:
(a) I don't understand your first point. Romney was proposing federal money but in the form of a guarantee rather than as shareholder equity/grant. There were many examples of temporary US government support for companies during 2008/9.
(b) I am not sure what part of the op-ed you think I am not reading. Are you reading "post-bankruptcy" as after bankrupcy protection has ended when it obviously means post-bankruptcy petition ie during bankrutcy protection?
(c) Private investors can move very quickly. If you offer a private investor the chance to buy US treasuries yielding 1-2% or GM debt guaranteed by the US government yielding 5%, private investors would snap up the GM debt. They would not even care what GM looked like as they would be looking at the guarantee and taking US govermnet risk.
(d) Restructurings under Chapter 11 can take a long time, sometimes years. There are proposals, votes and, ultimately, court approval. Why do you assume that any layoffs/closures would have happened immediately?
In practice both Obama and Romney were advocating a similar process - federal support while GM restructures under bankruptcy protection. I see no strength in the arguments I have seen that Romney's plan could not have worked or would have, of necessity, caused mass and immediate layoffs and closures.

People buy US treasuries because they are made to be bought, sold, and traded. There's a difference between having 18 million dollars in treasuries and having 18 million dollars of GM. Company debt, even with federal guarantees, is far less secure than treasuries. Private money, with good reason, doesn't want to deal with something where their cash is dependent on congress sticking to its word.

Also, if it was guaranteed at 5%, wouldn't the tax payers lose money as they would be on the hook to provide that return on pieces of debt that were not going to yield that on their own?

I'm not an expert in bankruptcy but my understanding is that the companies would have to close, not because of negotiation, but because they literally did not have the money to buy inventory or pay workers next month. They had no time and there were no private loans to be had.

The way the bailout worked was, money first, details later. (Which has huge risks and lead to many problems)

but that's better than "details first, money later" which is what any private sector investor would have wanted.

But the companies would have imploded waiting for the details.

McJakome in reply to Tom FarEast LA

I'd bet on Murdoch/FOX employee. You know, from the "fair and balanced" 24/7 GOP propaganda network. Do you really think it's a coincidence that their Minister of Propaganda, Karl Rove, has a German name?

@Yankee, you seem to be laboring under the mis-information that GM & Chrysler had done themselves in ("allowed some of the auto companies to continue their losing ways")

While a popular mis-conception, it is false. They were failing because Wall St had pulled the run out from under so much of the Economy that both existing car buyers could not get loans and way too many Workers had lost their Jobs because of Wall St' & London's "the City"'s fraud and gambling. Chrysler had the added wound of Daimler having pillaged the company on their exit.

Obama's solution was simply pragmatic, but he and supporters had to pillory GM & Chrysler for some mysterious PR reason. It was that which caused the bad taste in too many un-thinking Americans craws.

You have a lot of reading to do yourself.


The correlation between Urban areas and Democratic voters is so consistent it's scary.

Tom FarEast LA in reply to TS2912

Yes, Democratic voters are the most educated. And, Lee Atwater went out of his way to recruit the least educated voters into the Republican Party as part of his Southern Strategy.
How short sighted ...

TS2912 in reply to Tom FarEast LA

Short-sighted is correct given the general decline in racism among the younger people (esp. the educated, secular ones) and the dramatic increase in non-white Americans as a proportion of the population.

NickyGoodtimes in reply to nocabdarb


Well, since you opened up this door, you may as well look at more than just a single indicator such as 'urban population voting democratic". By all means, please look at the correlation between a state's color (Red vs Blue) and their:
Rates of college education, per capita-
Rates of teen pregnancy per capita-
Rates of STDs per capita-
Rates of Divorce per capita-
Rates of avg income-
Rates of pop on welfare-
Rates of taxes collected vs return of services (ie- send $1 of tax to DC, receive $x amount back).

Care to guess where these will fall along the Red v Blue spectrum?

McJakome in reply to TS2912

This explains the viscious determination of the troglodytes to win and gain permanent control of the electoral process. Their unspoken slogan might be, Christian Dictatorship or Death!

I favor death, and would rather die fighting than let American Taliban take over.


Jobs vs cars is just another example of voters' silly preoccupation with putting food on the table for their own family. It pays for politicians to pander to it. Coal will be dug and burned so long as it is there. US policy won't stop the Chinese and others from burning it no matter the consequence. So, we may as well join the party and have air conditioning for our dining rooms. And who cares what that fellow promising me a job may do in a far-off place like Iran?


A wild card may be the weather. Extended forecasts (for what they're worth) are saying rain in the Democrat-rich north of the state, and just cloudy in the south on 11/6.



Products and events


Take our weekly news quiz to stay on top of the headlines

