Any Stick Will Do

Any stick will do to beat a dog, goes the old saying, and the same rule seems to apply to the 43d president.

Megan McArdle has been doing a fantastic job covering the auto crisis, among the very best anywhere, but this latest blogpost of hers seems massively unfair to George W. Bush:

Austan Goolsbee recently complained on television that they're only embroiled in the auto mess because the Bush administration "kicked the can down the road". Keith Hennessy, who was in the Bush administration, says that's not quite how it happened: the administration proposed a more definitive resolution process, but the Obama transition team, which wanted more control over the process, declined.

It seems to me that the Bush administration could hardly have resolved things any more quickly than they did; restructuring a company takes time. Nor did they have much political scope for bold action. But perhaps my old professor was voicing my secret suspicion: that the Bush administration only gave the automakers loans because they wanted to leave the incoming Democrats with an ugly, expensive, mess on their hands. If Bush had had a few more years in office, he might simply have let the automakers fail. But this way, he kept Michigan competitive, and forced the Democrats to spend huge, unpopular sums on a fairly naked bailout of a key labor constituent.

Now consider the implied alternative here.

The request for federal aid for GM, Ford and Chrysler is presented Oct. 30, 2008, by the auto state governors, led by Michigan's Jennifer Granholm.

It is Nov. 7, 2008, when GM declares it is heading for insolvency.

The car companies themselves ask for a bailout on Nov. 18.

Is it suggested that the outgoing administration of George W. Bush - an administration that had just been repudiated at the polls on a scale not seen since 1980 - should have made the bold decision to kill the Detroit companies then and there, foreclosing options for the new president? Seriously? Can you imagine what the reaction among Democrats would have been? And for once - rightly so.

Megan believes that GM should have been allowed to fail. I agree. So probably did George Bush. But he had the grace to appreciate that this was not a decision for him to make at this point in the political cycle. He extended the Detroit companies enough credit to sustain them until the new administration arrived. If this new administration finds that responsibility uncomfortable, it says more about them than it does about George Bush.

And by the way: Do please notice that the timeline here shows that the major decisions were all made after election day. Besides, Michigan was never going to be competitive in 2008, and no Republican decision-maker ever imagined otherwise.