I didn't want there to be 21 percent unemployment, Bush said Monday in the closing speech at National Automobile Dealers Association convention in Las Vegas, according to Bloomberg. I didn't want to gamble. I didn't want history to look back and say, 'Bush could have done something but chose not to do it.' And so I said, 'No depression.'
Bush's remarks come at a time when political debate is heating up over the loans provided by the administrations of Bush and President Barack Obama in 2008 and 2009. Obama has touted the bailouts as a success as the U.S. auto industry continues a dramatic recovery. But Republican presidential candidates, most notably front-runner Mitt Romney, have been steadfast in their criticism of the government's decision to wade into the private sector.
Late in 2008, the Bush administration signed off on emergency loans to GM and Chrysler. The bailout eventually totaled $17.4 billion. Upon taking office, the Obama administration enacted what amounted to be an $85 billion bailout.
According to The Detroit Free Press, Bush told about 22,000 dealers at the conference that Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged him to take action late in his presidency to avoid the serious repercussions that could have come quickly. Bush wanted to stick to the free-market philosophies he championed.
But sometimes circumstances get in the way of philosophy, Bush said, according to the paper. I would make the same decision again.
Both Chrysler and GM have repaid their loans, but the U.S. government is still likely to lose money off the bailouts because it owns about a 26 percent stake in GM. Last week, Chrysler announced its first profit since 1997. And last year, GM again became the world's top automaker in terms of global sales.
Beginning with the State of the Union address, Obama has begun to paint the auto industry bailout and subsequent recovery as a major campaign theme heading into a general election that could pit him against the front-runner Romney. In 2008, Romney penned an op-ed in The New York Times entitled Let Detroit Go Bankrupt, advocating a managed but more traditional bankruptcy process for the automakers.
Visiting the Washington Auto Show last week, Obama poked Romney on the issue.
When you look at all these cars, it is a testimony to the outstanding work that's been done by workers, American workers, American designers. The U.S. auto industry is back, Obama said at the auto show, according to a pool report.
The fact that GM is back to No. 1 I think shows the kind of turnaround that's possible when it comes to American manufacturing. It's good to remember the fact that there were some folks who were willing to let this industry die.
During the Super Bowl, Chrysler debuted a commercial featuring Clint Eastwood entitled Halftime in America. Much of the reaction centered on the similarity of the themes in the ad and those that Obama is likely to push in his re-election campaign. But Chrysler CEO Sergio Marchionne said Monday that the commercial had zero political content.
Meanwhile, Bush is not wavering on his stance nearly four years ago. He defended the bailouts using the same rationale when he explained it in his 2010 memoir, Decision Points.
Nobody was more frustrated than I was, he wrote in the memoir. It was frustrating to have the automakers' rescue be my last major economic decision. But with the market not yet functioning, I had to safeguard American workers and families from a widespread collapse.