The Bush administration eventually conceded the economy was in a recession before he left office. I don’t really care which party was in office, the fact is, the economy had been on a downward spiral for several years before the current administration took office. Nothing was done to correct it early on, and it continued to worsen. There were a lot of factors that combined to cause it, but the fact is undeniable that the underlying economy was not strong. With growing unemployment, housing prices plummeting, and entire segments of the economy failing, how can you say the underlying economy was strong?
As far as the problem with GM and the rest of the U.S. auto industry, you over simplify the issue. Poor management and poor quality were major contributors. However, unfair trade practices by the Japanese (manipulation of the yen against the dollar and government subsidies) also served to give the Japanese an advantage in the market. Despite what you may believe, this has never been a “free market.”
If you look at current quality studies, several models from GM and Ford have displaced some Honda and Toyota models for top quality picks. The problem is consumers are afraid to take the chance on U.S. cars after the crap they produced from the early 80s through early 2000s, and rightly so. That is why this new GM campaign was developed. It is designed to entice buyers to try GM products again. GM believe if the can get consumers to try it GM products, they will like them. If it works, you will see other car companies (domestic and foreign) follow suite.