Bain Capital vs Janesville GM Plant: Being misled by reporters who ask the wrong questions
The central issue of this presidential campaign is this:
Obama favors central planning and government control of industry
Romney favors venture capitalism and creative destruction
When Obama attacks Romney for the actions of Bain capital, the press gets that. What Obama’s narrative says is that creative destruction has cost the US manufacturing worker his livelihood. The Obama narrative does not blame the geopolitical realities of cost, supply and demand; instead, Obama places the blame on the leaders of industry, who could, in his view, be controlled by central planners.
When the Romney campaign attacks Obama over grandiose statements like “With government intervention, this plant will be open for another hundred years”, what Romney is saying is that crony capitalism is ignorant and impotent against the realities of cost, supply and demand; Romney’s campaign reveals the fundamental flaw in central planning: Intended consequences and wishful thinking do not change the world into something it is not.
No amount of “hope” is going to create a practical electric car. The practical electric car will come, not from central planning, but from innovation. In all likelihood, the critical breakthroughs will come from innovators funded by venture capitalism, not central planners.
When Obama gave his speech about the plant being open for another hundred years, what people heard was: “I and my plans will stand up for this plant, and you will benefit [from central planning]”. But the plant closed, all the same, not because Obama made a heroic effort to save that plant, or any other particular plant–no such effort was ever made–the plant closed because of the realities of cost, supply and demand. Realities to which Obama was and is willfully ignorant.
Nobody denies that central planning is a powerful tool. The Soviets put men in space–few nations have done that. What we as Americans understand, but apparently Maddow does not, is that central planning is a tool that must be used carefully and skillfully, or preferably, not at all. Central planning rarely produces the best results. Good results sometimes, terrible results other times, but in the ongoing contest between central planners and individual innovators, central planners have proven wanting.
What the Janesville GM plant closing proves is that central planning, in the hands of Barack Obama, is again a failure. He believed that central planning would save that plant, but he was wrong. Just like he was wrong about how to create jobs, fix the economy, reform healthcare… Just as he has been wrong about too many things.
The question is not: “did the plant close before Obama was president?” (it was still producing cars in 2009). The real question is: “was Obama wrong when he said [central planning] government would save the plant”. The government did not hold back in 2008, it did intervene, and yet the plant closed anyway. YOU CAN BET that if the plant had been saved, Obama would be touting that.
That plant closure is a failure of central planning. We look at our economy, see it sputtering and dysfunctional, yet we cannot easily see what has happened, event by event, that makes for such a weak economy. Solyndra is a signpost. The Janesville GM plant is a signpost. Neither of these by themselves explains the failure of central planning, but together, these and a thousand other Obama central planning missteps do explain what we see.