Former White House car czar Steve Rattner predicted on Sunday that the economy is not in danger of slipping back into a recession and rejected Mitt Romney’s attempts to take some credit for the auto industry’s turnaround.
“I would say the probability is still quite low that we will actually go back into another recession,” Rattner said on Fox News Sunday in response to the weak job numbers released on Friday showing only 69,000 jobs were created in May. “We are growing slowly, but we are growing.”
He noted that sectors that might contribute to higher growth are still struggling including housing and the public sector, where many states have laid off workers.
Meanwhile, he also described Romney’s claims weeks ago that the Obama administration followed his call for a managed bankruptcy for the auto industry as “completely false.” He was responding to Romney adviser Ed Gillespie’s comments that the auto industry could have obtained capital from private sources instead of turning to the federal government for a bailout.
“There are differing opinions as to whether that could have been done. Governor Romney’s belief and the belief of many other people is that we would have been better off if we had gone through a managed private sector bankruptcy,” Gillespie said during an appearance on the same program. He added that Romney’s recommendation would have made the auto industry more viable in the long run.
Rattner, who led the auto bailout program for the administration, flatly rejected Gillespie’s view. If the government had not intervened, Rattner said, both General Motors and Chrysler would have been in bankruptcy for many years, which would have cost “hundreds of thousands of jobs,” instead of the more accelerated bankruptcy facilitated by the government’s assistance.
“The fact is there was no private capital available for these companies,” he said. “Not only did President Obama recognize that, President Bush recognized that. The first $17 million was in put in by President Bush,” Rattner said. “It would have been government or nothing.”