UPDATE: September 2020 - When we originally wrote this article a few years ago, we knew that saving the American auto industry during the Great Recession began during the Bush administration and was completed by the Obama administration. But there were two things we hadn't realized: that Joe Biden coordinated that effort during the Obama years and that Mike Pence was one of the many conservatives in Congress who voted against it.

Which tells you once again everything you need to know about the overall management of our economy: when times are tough, Democrats can be counted on to make the right decisions to save/create jobs and to improve economic conditions for everyone. As for conservatives? They're always willing to give tax breaks to their fat-cat friends, but when it comes to the little guy...well, you're usually on your own.

(Biden with Detroit auto workers - image from ABC News)
Here's our original article, which explains the details of why the "bailout" was necessary and why it worked:

Study Shows Auto Bailout a Success

The Center for Automotive Research (CAR), an independent non-profit organization based in Ann Arbor, Michigan, has confirmed what most of us already knew: the bi-partisan Bush/Obama government "bailout" of Chrysler and General Motors was a success. Despite what you may have heard from Mitt Romney during his 2012 Presidential campaign and from many of the far right politicians and pundits since the financial crisis, CAR's December 2013 study confirms that the government intervention achieved its goals.

Here are some of the study's key findings:

The federal government's actions in 2009 saved 2.6 million jobs at the automakers and related companies

$284 billion dollars in personal income was preserved as a result of these actions

The loss of these jobs would have cost the federal government $105 billion dollars in unemployment compensation, Social Security contributions, and personal tax collections

(GM Headquarters - image from nyt.com)
The study did not address two other positive impacts the government's action had on the economy: preserving the pensions of 600,000 GM and Chrysler retirees and precluding the damaging psychological impact the collapse of the US auto industry would have had at a time when the US economy already was spiraling in a downward direction.

Further evidence of the longer-term success of the intervention can be seen in the growth experienced in the industry since 2009: GM alone has invested $8.8 billion in U.S. facilities and created over 25,000 new jobs.

Critics of the government's actions to save the US automakers like to point out that the government did not recover approximately $13.5 billion dollars of the over 65 billion dollars invested. While this may be a tempting political argument to make to the uninformed, it is an inaccurate economic argument, as it focuses on only one part of the overall cost-benefit analysis and ignores the revenue that the study shows would otherwise have been lost.

Not only does the saving of $105 billion in government revenues more than offset the unrecovered amount, the critics fail to include the longer-term economic benefits of saving two-thirds of the domestic US auto industry. They also ignore the fact that both the Bush and Obama Treasury Departments repeatedly stated that the goals of the intervention were not to make a profit, but to save US jobs and help stabilize the precarious economy.

We're pleased to disagree with the critics on this one and to agree with CAR's chief economist, Sean McAlinden, who summarized the outcomes of the government's actions by saying "This peacetime intervention in the private sector by the U.S. government will be viewed as one of the most successful interventions in U.S. economic history."

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