There’s this weird meme among Republicans that I haven’t been able to figure out the origin of. It’s become an item of faith that the bailout of the banking and auto industries was a) a hostile takeover of private industry and b) the work of President Obama. Obviously, neither of these things are true. Both banks and automakers begged to be bailed out. The CEOs of the Big Three automakers went before Congress in December 2008:
“We’re here today because we made mistakes,” General Motors chief executive Rick Wagoner told the Senate Banking Committee. Wagoner, who drove to the hearing in a test version of the electric Chevrolet Volt, apologized for asking for the loans.
“We’re sorry to be asking for this support,” he said. “We wish the market conditions were better, but they’re not, so this is what we need to do.”
Things were worse still for banks. In the span of just eight days in September 2008, the U.S. financial system crumbled. Once Lehman Brothers was allowed to fail, the rest of the banks realized that they were screwed, for so many assets based on mortgage-backed securities. Within hours they agreed to take enormous loans from the federal government to prop themselves up, with AIG being a prime example of this:
Of the $58 billion in contracts that AIG had written, 64 percent of the insured instruments had been downgraded and six were in default.
If AIG failed, the effects would ripple through the world financial system and damage Wall Street firms.
The regulators stepped in on the evening of Tuesday, Sept. 16, with an $85 billion loan to AIG, in exchange for an 80 percent stake. The action averted bankruptcy and, with the first $30 billion loan installment from the New York Fed, enabled the company to meet its collateral calls from customers including Goldman.
The choice was between bankruptcy or bailout.
Obviously, this was President Bush’s doing, not President Obama’s, since Obama hadn’t even been elected when the automakers were bailed out, and hadn’t yet taken office when the banks were bailed out. Just reading a few headlines makes that much clear: “Bush bails out carmakers, banks need more cash,” “Bush: Treasury will take $250 billion stake in banks.”
So how in the world did it become settled fact among Republicans that Obama did this? It fits their narrative, so it’s probably easy to make people believe, but how is this message being spread? Is it word of mouth? Talk radio? E-mail forwards? An epidemic of stupid?
None of the above. At least here in Virginia, we can thank Pat Mullins and the Republican Party of Virginia. In an end-of-year fundraising e-mail, full of typographical errors and huge logical holes, this paragraph appears at the end of the second page of the four-page missive:
[T]he Obama Administration took over much of the U.S. banking system, and followed it up with a takeover of the American auto industry.
(That’s Mullins’ emphasis, not mine.) Now, there are a lot of things about this letter that are wrong, but this is an egregious lie. If Mullins is so ignorant as to believe that these things are true, he’s no better than Jeff Frederick. Worse yet is the possibility that Mullins figures it’s worth telling such a bald-faced lie in order to raise money.
I’d thought that Mullins was an improvement over Frederick, that he might get the RPV out of its rut of habitual lies and exaggerations. I guess I was wrong.
Perhaps you could provide a few links to those Republicans for whom it is “an item of faith that the bailout of the banking and auto industries was a) a hostile takeover of private industry and b) the work of President Obama”? Certainly, the fundraising letter you DO cite is a reasonable interpretation of President Barry’s administration to double down on the actions taken by the Bush Administration.
Unlike President Barry, we don’t blame Bush for every current problem, to be sure, but it is not my impression that we excuse him for his OWN actions, either. As for the bailout, certainly SENATOR Barry endorsed the actions taken by the Bush Administration, and to a great extent, doubled down on them, particularly with regard to the government’s position in the bankruptcies of GM and Chrysler, virtually re-writing (badly, I might add) the law regarding secured and unsecured creditors.
Republicans have just witnessed the collapse of two of their most favorite fantasies – Supply-Side economic theory and the Magic of De-regulation, so we will have to endure their pomposity until they can work from Denial, and Anger to Acceptance of their failures.
Obviously there has always been a penchant in politics to bend the truth and mislead. Print media has been bought by the wealthy since it’s inception. With the advent of the internet, information at our fingertips, and the ability to fact check immediately, there is no longer a need to mislead. Simply lie.
Lie and get it out in front. When people do start fact checking, just tell a new lie. The general public is busy with their own lives and really only cares for half a second about anything that isn’t directly in their lives. The general public likes bullet points. Doesn’t matter if the bullet point is true or not. If the bullet point already relates to your target’s point of view, you’re two steps ahead of the game.
To James Young: Funny, I recall Bush tagging on the GM and Chrysler loans under TARP. Since he included it under TARP, he didn’t need Congressional approval. Obama refused to extend the loans once he was president, hence, the two companies declared bankruptcy. So where’s the “double down” there?
And as for the actual TARP money, Obama hasn’t released anymore than what the Bush admin set forth in the first place. Again, “double down”? If you want to accuse the Obama of anything, call them for their wretched oversight (even though there was little to none in the Bush admin plans) and for continuing to employ people with a clear conflict of interest.
Like most everything with the Bush administration, the goal seemed somewhat acceptable, but the lack of planning and the abhorrent greed ruined everything and more. That’s where the Republican party is at. All they have left to campaign on are lies because the last 10 years+ have been one giant Fail.
That’s an easy one. :) Two minutes with Google yields 1, 2, 3. Republicans prominent and anonymous are attributing a takeover of banking and auto industries to Obama.
No it’s not. The letter says, point-blank, that the Obama administration took over the banking and auto industries, in that order. In fact, the Bush administration bailed out those two industries, in that order. This really isn’t a matter on which intelligent minds may disagree.
Wow. I got a little curious about James’s claims so I went over to wikipedia. There’s been some dubious clearly partisan posting on the auto bailout and the TARP. I’m assuming since these topics aren’t the immediate cause du jour, the close scrutiny by wikipedia isn’t in place that was around at the end of 2008. Nice.
Don’t forget to enjoy the sixth layer of irony in this seven layer dip — most of these folks were the same people who complained that Pres. Obama was disengaged from the process because he didn’t suspend his campaign a la Sen. McCain to return to Washington for the bailout debate.