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Let's Check the Record

There was a critical moment in last night's final Presidential debate. Regarding Mitt Romney's position in late 2008 on how to respond to the problems facing the US auto industry during the Global Financial Crisis, President Obama and Romney had a sharp exchange. Romney stated that the companies needed to go through bankruptcy and then get government help and guarantees. Obama stated "that's not what you said." Romney suggested OBama "look at the op-ed." Obama then twice states "Let's Check the Record." Romney then tells Obama "You're wrong" three times, while Obama twice says "I am not wrong." They conclude by agreeing that people can/will "look it up."

Checking the record in this case takes less than a minute. Romney's NYTimes Op-Ed (11/18/2008) Let Detroit Go Bankrupt includes the following

"The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk."

In front of millions of people, in the final presidential debate, Obama was wrong. Not only was Obama wrong, he told people to "check the record," something the Romney campaign has claimed the Obama campaign has been avoiding. If Obama loses the election, I believe that exchange in the debate will represent the moment when the Obama Presidency past the point of no return. Literally and figuratively Obama saying "check the record", and proving to be wrong is a stark representation of Obama's reign.

Obama's record on this exchange get's a failing grade. He fought aggressively on a specific point where he had the facts wrong. The Romney campaign has argued that Obama has been avoiding talking about his track record. That record is considered to be marginal by most. This is also a symbolic point because it was about the "bail-out" of the US auto industry and the general mood of the nation is that "bail-outs" helped the firms and executives, but the American people got no bail out.

3rd Presidential Debate Transcript Video (exchange starts around 1 hour and 22 minutes in)

MR. ROMNEY: I just want to take one of those points. Again, attacking me is not talking about an agenda for getting more trade and opening up more jobs in this country. But the president mentioned the auto industry and that somehow I would be in favor of jobs being elsewhere. Nothing could be further from the truth. I'm a son of Detroit. I was born in Detroit. My dad was head of a car company. I like American cars. And I would do nothing to hurt the U.S. auto industry. My plan to get the industry on its feet when it was in real trouble was not to start writing checks. It was President Bush that wrote the first checks. I disagree with that. I said they need these companies need to go through a managed bankruptcy, and in that process they can get government help and government guarantees, but they need to go through bankruptcy to get rid of excess cost and the debt burden that they'd they'd built up. And fortunately the president picked
PRESIDENT OBAMA: Governor Romney, that's not what you said.
MR. ROMNEY: Fortunately, the president you can take you can take a look at the op-ed.
PRESIDENT OBAMA: Governor, you did not
MR. ROMNEY: You can take a look at the op-ed.
PRESIDENT OBAMA: You did not say that you would provide, Governor, help.
MR. ROMNEY: You know, I'm I'm still speaking. I said that we would provide guarantees and and that was what was able to allow these companies to go through bankruptcy, to come out of bankruptcy. Under no circumstances would I do anything other than to help this industry get on its feet. And the idea that has been suggested that I would liquidate the industry of course not. Of course not.
PRESIDENT OBAMA: Let's check the record.
MR. ROMNEY: That's the height of silliness.
PRESIDENT OBAMA: Let's let's check the record.
MR. ROMNEY: I have never said I would I would liquidate the industry. I want to keep the industry growing and thriving.
PRESIDENT OBAMA: Governor, the people in Detroit don't forget.
MR. ROMNEY: And and that's I have the kind of commitment to make sure that our industries in this country can compete and be successful. We in this country can compete successfully with anyone in the world. And we're going to. We're going to have to have a president, however, that doesn't think that somehow the government investing in in car companies like Tesla and and Fisker, making electric battery cars this is not research, Mr. President. These are the government investing in companies, investing in Solyndra. This is a company. This isn't basic research. I I want to invest in research. Research is great. Providing funding to universities and think tanks great. But investing in companies? Absolutely not. That's the wrong way to go.
PRESIDENT OBAMA: Governor, the fact of the matter is
MR. ROMNEY: I'm still speaking.
PRESIDENT OBAMA: Well (chuckles)
MR. ROMNEY: So I want to make sure that we make we make America more competitive
PRESIDENT OBAMA: Yeah.
MR. ROMNEY: and that we do those things that make America the most attractive place in the world for entrepreneurs, innovators, businesses to grow. But your investing in companies doesn't do that. In fact it makes it less likely for them to come here
PRESIDENT OBAMA: All right, Governor
MR. ROMNEY: because the private sector's not going to invest in a in a in a solar company if
PRESIDENT OBAMA: I'm happy I'm I'm I'm happy to respond
MR. ROMNEY: if you're investing government money and someone else's.
PRESIDENT OBAMA: You've held the floor for a while. The look, I think anybody out there can check the record. Governor Romney, you keep on trying to, you know, airbrush history here. You were very clear that you would not provide government assistance to the U.S. auto companies even if they went through bankruptcy. You said that they could get it in the private marketplace. That wasn't true. They would have gone through a
MR. ROMNEY: You're wrong. You're wrong, Mr. President.
PRESIDENT OBAMA: I no, I am not wrong.
MR. ROMNEY: You're wrong.
PRESIDENT OBAMA: I am not wrong. And
MR. ROMNEY: People can look it up. You're right.
PRESIDENT OBAMA: People will look it up.
MR. ROMNEY: Good.

Gary Karz, CFA Follow GKarz on Twitter
Host of InvestorHome
Founder, Proficient Investment Management, LLC

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