Today, writing in The Washington Post, Newt Gingrich blasted the decision of the Obama administration to save the auto industry. Gingrich criticized the move as being "anti-market" and "socialist" saying:
Violating 200 years of bankruptcy precedent to take money from bondholders and investors in the auto industry to pay off union allies is rather an anti-market intervention.
There was nothing anti-market about the decision to save the auto industry. A report released this week by the White House showed that in 2008 the auto industry lost 400,000 jobs. The report goes onto to show that had the government not helped the auto industry over 1 million jobs would have been lost in that sector in 2009. As a result of the government stepping in, the auto industry gained nearly 45,000 jobs, which was the highest rate of job growth in the auto sector in over a decade.
Saving one million jobs is hardly "anti-market." In fact, it was good for the markets because more people employed means more people buying stuff.
Furthermore, it wasn't a government takeover of the auto industry, as many on the right allege. The government merely provided the auto industry with the necessary support so it could have some breathing room to reshape in order to compete. As the President's top economic adviser wrote in The Huffington Post this week: "This turnaround wasn't an accident of history. It was the result of considered and politically difficult decisions made by President Obama to provide GM and Chrysler -- and indeed the auto industry -- a lifeline, if they could demonstrate the will to reshape their businesses and chart a path toward long-term viability without ongoing government assistance."
This is exactly the role that government should play to help struggling industries so they can compete and create good-paying jobs. This is the role our government has played throughout history, helping industry by educating workers, building infrastructure and providing incentives for development. This is good for the market. There is hardly anything radical or socialist about this. This is what we have done throughout our 200-year history. It's the American way.
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