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Thursday, June 9, 2011

Romney and the Auto Industry

The Detroit News reports:

A conservative Republican slammed Mitt Romney — on a campaign swing Wednesday through his native Michigan — for not supporting the auto bailout.

Rep. Thaddeus McCotter, R-Livonia, who supported the government intervention for General Motors and Chrysler, met constituents and the media at E&E Manufacturing in Plymouth to blast Romney, and tried to link the Republican candidate to President Barack Obama.

"Motor City hospitality dictates a Michigan message to Mitt that our struggling families, entrepreneurs and workers think Mr. Romney and Mr. Obama are not rivals, they're running mates," McCotter, who is considering his own run for the White House, said in a statement.

In 2008, as GM and Chrysler, on the verge of collapse, asked the federal government for a bailout, Romney argued in a New York Times op-ed piece headlined "Let Detroit go bankrupt" that any government intervention would hasten the decline of the industry as a whole.

Romney won Michigan's 2008 primary, beating out Sen. John McCain, R-Ariz., by more than 80,000 votes, largely driven on the name recognition of his father, the late George Romney, the former Michigan governor and head of American Motors.

Those deep connections brought Romney's anti-auto sentiments as somewhat of a surprise to some, but political observers say the candidate is trying to balance the needs of Michigan's electorate, and the labor-dominated culture of Metro Detroit, with a broader appeal needed to successfully negotiate a path to the presidency.

"The Republican primary electorate is certainly not labor-dominated and I would say of mixed opinions, on how much the auto industry should play into Michigan's economic future," said Matt Grossmann, an assistant professor of political science at Michigan State University in East Lansing.

In a personal communication, Professor Grossmann adds: "In a general election, it might be a good issue to challenge him on. In the primary, I don't think one of his major opponents is going to bring up his opposition to the auto bailout as a reason not to vote for him."

This story illustrates ideas from the textbook. Why does McCotter continue to support aid to the auto industry? Because many of his constituents have an economic stake in it. As Madison wrote in Federalist 57. "the House of Representatives is so constituted as to support in the members an habitual recollection of their dependence on the people."

Our chapter on parties discusses the presidential nomination process. Whereas labor plays little role in Republican primaries in Michigan, people in agriculture do play a significant part in GOP Iowa caucuses -- which may explain why Romney supports the ethanol subsidy.