Overhaul

I've started Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry, by Steven Rattner (2010, Houghton Mifflin Harcourt; paperback available).  We're likely to hear a lot about the auto industry "bailout" as the campaign crawls toward November, so I thought I ought to read this, the one and only book on the subject.

Steven Rattner started out as a journalist, and then got into investment banking.  He is a "private equity" specialist.  His firm, Quadrangle, worked in the entertainment and communication industries, putting together acquisitions and mergers, and taking some firms into bankruptcy.  When he was named to head President Obama's Team Auto, his lack of background in the auto industry worried lots of people, including Michigan's legislators, governor, and many talking heads.  But not being an Auto Guy helped him take a fresh look at an industry rushing blindly toward the bankruptcy cliff.

There has been much chatter from the Right about how the Government should have let the free markets do what they do best, i.e., by letting GM and Chrysler go bankrupt.  Mitt Romney in particular has voiced this criticism during the just-ended Republican primary food fight.  What he fails to understand, or admit, is that the auto industry's collapse occurred simultaneously with the meltdown of the financial sector.  There was no private money available to keep the auto makers afloat or to fund restructured companies after they emerged from traditional bankruptcy.  It's most likely that GM and Chrysler would have been cut up and sold for scrap.  That, in turn, would have sent the supplier chain into bankruptcy, taking Ford Motor Co. with them, and put a million workers out on the street.  And that, in turn, would very likely have meant bankruptcy for many communities in Michigan, Ohio, Illinois, and Wisconsin, and possibly for the State of Michigan itself.

In short, if the "free markets" had been allowed to do their thing, we almost certainly would have had a proper Depression in the Midwest, and perhaps more widely.  That is not a happy vision to contemplate.

I'm about a quarter into the book.  Rattner writes well, and offers unvarnished portraits of the major players, including the auto company CEOs.  What I find most fascinating, however, is how young the members of Team Auto were — many in their 30s, brilliant, quirky, willing to work 24/7 to get the job done.  And Rattner provides amusing insights on public service in the Age of Obama.  For example, in 2009 the Department of Treasury was busy doling out billions to banks on the brink, but if Team Auto scheduled a lunchtime meeting with auto industry big shots, Rattner had to pay for sandwiches and bottled water out of his own pocket.  Treasury had no line item for such frills.

You can catch Steven Rattner on MSNBC's "Morning Joe" program, usually on Mondays in the 6:00-7:00 a.m. slot.  He often brings charts which help explain this or that aspect of economic policy.  I commend his book as a good read for this political season. •••