Wednesday, October 17, 2012

Romney would have let GM go bankrupt. Obama did.

In last night's debate Obama came back to one of his favorite campaign talking points: Romney would have just let GM go bankrupt.  While it's true that Romney would have done so, and said he would in speeches, I'm not clear why it's interesting.  GM went bankrupt and Obama supported it.

The first sentence of the Wikipedia article on the GM restructuring (which is accurate):
The General Motors Chapter 11 sale of the assets of automobile manufacturer General Motors and some of its subsidiaries was implemented through section 363 of Chapter 11, Title 11, United States Code in the United States Bankruptcy Court for the Southern District of New York

There are serious questions surrounding how the bankruptcy was handled.  For instance whether TARP repayments could legally be used to bailout automakers, or whether the Federal government actually has the power to subordinate higher priority creditors in order to make sure that union pensions continue to get funded, but Romney and Obama agree that the whole thing should be handled through Chapter 11.  We know that because Romney said so and Obama handled it through Chapter 11.

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