In the second Presidential debate between President Barack Obama and Mitt Romney at Hofstra University last night, the candidates sparred through two hot-button automotive issues that will play a big role in the election.
The bipartisan website FactCheck.org provides an excellent analysis of the entire debate here, but we’re most interested in the two topics that affect the way you drive.
In a difficult economy where millions of Americans are still struggling to find work, the price of gas is a major concern. Romney blamed the current high prices on Obama, but the truth is that not only does the President have little control over a market based on global supply and demand, but prices are about where they were four years ago. While Romney estimated that gas prices have gone up $2,000 per car annually since Obama took office, FactCheck.org explains “…the $2,000 figure is greatly inflated because gasoline prices were much higher during most of 2008 than they were at the moment Obama was sworn in.”
While gas prices are important because they affect Americans in the here and now, the issue of the 2008 automotive industry bailout will have lasting effects on the economy and job market for years to come. While there has been debate about whether Chrysler and General Motors are upholding their end of the bargain with paying back the more than $80 billion loaned to them, by and large the verdict is that the government investment saved thousands of jobs and possibly even the companies themselves – Chrysler recently reported its best September sales since 2007, while GM growth has been more slow and steady.
At issue is whether Obama took the right course of action. During last night’s debate, Romney claimed that he and Obama shared the same views, however in 2008 Romney argued that the Detroit companies should be allowed to go bankrupt without government intervention. The FactCheck.org article cites a Congressional Report, stating that while the bailout put American investments at risk, it kept GM from defaulting on its loans and provided a more clear path to recovery than bankruptcy without assistance would have.
Romney has in fact been a fervent critic of Obama over the bailout in the past, though in this article, TheHill.com correctly points out that the auto bailout was actually begun under President George W. Bush.
Since the automotive industry has such major implications on the national and global economy, job market, national debt and other areas, expect cars to be front and center right up until Voting Day. In fact, Autoblog.com makes a great point about a potentially hot-button issue that wasn’t discussed last night: the bankruptcy of A123 Systems. The company filed this week and supplies BMW, GM, Fisker and other automakers with batteries for electric and hybrid cars. Romney has criticized Obama in the past for investing American money in eco-friendly vehicles that may not pan out, and A123 received about $249 million in federal loans in 2009. This could be a major talking point for the GOP moving forward.
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