Politics

Obama: His type of economic plan built Detroit

Neil Munro White House Correspondent

President Barack Obama today lauded his 2012 economic plan as the type of plan that created the U.S. auto-industry, which boomed 100 years ago after Henry Force built his first factory in 1899.

“I believe America only succeeds and thrives when we’ve got a strong and growing middle class… [and] that idea is what built America, that’s the idea that built Michigan,” he told a rally of auto-workers in Redford, Mich.

“That’s the idea that’s at the heart of the economic plan I’ve been talking about all year long on the campaign trail,” he said.

Despite Obama’s statement about Michigan, the credit for Michigan’s economic success goes to the U.S. auto industry and a variety of entrepreneurs, especially Ford — the hard-nosed inventor of the moving production line.

The line reduced the price of autos so dramatically that even millions of teenagers were able to buy autos in the 1950s.

Ford built his revolutionary factory in Detroit in 1899 — when the federal and state government played minimal roles in economic policy — because the city already had a large carriage-building industry and machine-tool industry.

The U.S. machine-tool industry was then world-famous for its revolutionary ability to make uniform and interchangeable parts. That interchangeability allowed the mass production of industrial and consumer products.

The production of interchangeable parts was pioneered by the U.S. gun industry, and was shown worldwide in 1851 by Sam Colt, founder of Colt’s Patent Fire-Arms Manufacturing Company.

Prior to the 1940s, the federal government played little role in education, training and technology development.

However, Obama today insisted on a primary role for his style of government.

“I want to give more Americans the chance to earn the skills that businesses are looking for right now, and give our kids the kind of education they need to succeed in the 21st century. I want to make sure America leads the world in research and technology and clean energy.  I want to put people back to work rebuilding our roads and our bridges and our schools,” he insisted.

“That’s how we grow an economy,” he insisted.

Obama also claimed credit for the partial recovery of the U.S. auto industry after the collapse of the subprime mortgage industry, which Obama supported from the 1990s.

“Remember, it was just a few years ago that our auto industry was on the verge of collapse… I wasn’t about to let that happen,” he said.

“Three and a half years later, that bet is paying off [and] this industry has added over a quarter of a million new jobs…The American auto industry is back,” he said.

In November 2012, U.S. sales data showed GM increasing sales in 2012 by 4 percent to 2.7 million autos. Chrysler pushed sales up by 22 percent to 1.5 million autos. Ford declined federal aid in 2009, and boosted sales to up 5 percent to 2 million. However, Toyota’s sales grew 29 percent to 1.9 million, and Honda grew sales by 24 percent to 1.3 million.

Also, Obama’s effort to claim credit for Detroit was undermined by the company that provided him the stage for his speech.

“Today, Daimler is announcing a new $120 million investment into this plant, creating 115 good, new union jobs building transmissions and turbochargers right here in Redford,” he said. “You guys will be building all the key parts that go into powering a heavy-duty truck, all at the same facility [and] nobody else in America is doing that…. it’s just the latest example of Daimler’s leadership,” he said.

But Daimler is a German-owned company, and it bought the factory in 2000 after General Motors spun it off in 1988.

Obama’s Dec. 10 claim of government leadership echoed Obama’s controversial campaign-trail downgrade of entrepreneurs’ importance.

“If you’ve got a business, you didn’t build that,” Obama told a Virginia crowd June 14, while urging tax increases and a larger role for government. “Somebody else made that happen,” Obama declared, highlighting the government’s funding of roads and schools.

In January 20011, Obama also tried to give credit for the U.S. innovative gas-fracking industry, which is spurring U.S. economic growth by providing enormous quantities of cheap natural gas.

“The marketplace needed a nudge here” from government, Obama said at meeting of his jobs and competitiveness council. “Folks are acting as if that [boon] just sprung out of thin air and is one more example of the dynamism of the marketplace,” he complained to the council’s executives.

Despite Obama’s expenditure of $5.7 trillion in borrowed funds, U.S. manufacturing jobs remain roughly 1 million below their 2008 figure of about 13 million.

In November, for example, U.S. food and chemical companies shed another 21,000 manufacturing jobs, although auto-industry jobs gained an estimated 10,000 jobs. .

Yet Obama repeatedly emphasize government’s leading role in economic growth.

“Our success as a country in this new century will be defined by how well we educate our kids, how well we train our workers, how well we invent, how well we innovate, how well we build things like cars and engines,” he said.

“That’s how you bring new jobs back to Detroit. That’s how you bring good jobs back to America. That’s what I’m focused on. That’s what I will stay relentlessly focused on going forward,” he said.

Follow Neil on Twitter