Auto bailout, trade deal aided Ky.

Auto bailout, trade deal provided boost

November 2, 2012 

Other than semantic debates about rape in congressional races, this election season has been dominated, from the presidential race on down, by jobs.

In Kentucky, there's been a tremendous amount of talk about coal jobs. But in talking about jobs and government, it might be better to look at manufacturing. In Kentucky that sector employs 10 times as many people as mining and logging (230,000 vs. 23,300, according to recent data from the Governor's Office of Economic Analysis. The number of people employed in the coal industry alone is well under 20,000.)

The auto industry — with Ford, GM and Toyota plants here as well as dozens of parts suppliers — makes up by far the largest segment of manufacturing in this state.

This is where things get really, really complicated for those who are against big government and for jobs. It looks an awful lot like the auto bailout — classic big government — saved jobs, and worked.

Again, from the most recent quarterly report by the Office for Economic Analysis, talking about the national economy: "The strength of the domestic auto industry has kept the manufacturing sector from experiencing significant contractions."

CNN reported in September that "the Center for Automotive Research, a well-respected Michigan think tank estimates that the bailout therefore saved 1.5 million U.S. jobs by keeping GM, Chrysler and the companies that depended on them in business." That same story, "3 answers to the bailout debate," also addressed whether private banks rather than the government could have made loans to the auto industry.

It quotes former GM Vice Chairman Bob Lutz, a Republican, who said there was simply no private funding available in 2009. "He (Romney) thinks we didn't try to borrow money from the banks?" Lutz said. "The banks were even more broke than we were. Who had the money?"

Consider also the free-trade agreement that President Barack Obama finally signed in October, 2011 after a two-year battle with Republicans.

Within two months, Toyota had a deal to ship 6,000 Camry's annually from Kentucky to South Korea. Kentucky Bourbon and agriculture sectors are also benefiting from the reduced trade restrictions. New markets mean new jobs.

No one is happy with the current U.S. or Kentucky economies, and there will always be legitimate debate about government's role in the private business sector.

But a clear-eyed look at the numbers suggests that without the big government efforts of the last few years, many fewer Kentuckians would be employed.

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