The Rachel Maddow Show: Alison Stewart interviews Paul Krugman on the auto bailout.

[Wetzelbill]

Run time: 06:06 https://www.youtube.com/watch?v=YV0ub1C2QGo   Posted on YouTube: November 20, 2008 By YouTube Member: Views on YouTube: 0   Posted on DU: November 20, 2008 By DU Member: Wetzelbill Views on DU: 2732

 

[Aqaba]

1. Allison is awesome

[Eric J in MN]

2. The CEOs-took-corporate-jets thing is the stupidest anecdote since...

...John Edwards' $400 haircut.

I guess Krugman brought up the corporate jets to say it's irrelevant.

[Jim Sagle]

5. Actually he didn't, and it isn't.

It's just that we're pressed for time.

[dothemath]

7. Moran has spoken ......................

A moran has spoken (yes, I know how to spell moron, but in keeping with the new paradigm that separates morons, like me, from really, really stupid, racist, homophobic, neocon, super-evangelical, fucked-up - genome republicans like the new permanent minority in this country, we now have a new classification - MORANS).

John Edwards paid for his own haircut out of his estimated $15 million fortune and taxpayers will get the 'privilege' of paying for the heads of the Big 3 to Washington.

Shut up and go away.

[mentalslavery]

3. Why is it assumed we have to keep the CEO's

I don't get to keep much when I go bankrupt. Kick the bums out!! Save the jobs of the average worker who did nothing wrong. Let them continue to make cars under a management that is green. Hell, give them raises for putting up with this shit!!!

[ksimons]

4. Let's see, give 'idiots' as Krugman calls them $25 billion, WITHOUT a strong plan

Maybe Krugman is the idiot this time, nobel prize or no nobel prize. On its face value, it isn't Krugman's money so tell ya what - let's see him put HIS entire house, life savings AND ALL future earnings on the line and see if he really believes in this proposition of giving all HIS money to 'idiots' without a plan.

I bet he'd walk away from that deal.

[4lbs]

6. You obviously don't get or understand it.

He was saying that simply letting them go bankrupt isn't like a person or some other company going through regular bankruptcies.

First of all, which consumer is going to want to buy a car from a company that went bankrupt, knowing that there was a chance their dealers wouldn't be around in a few years or even the 5 year/60,000 mile warranties and such wouldn't be honored?

Second, if they go bankrupt because there's no bailout, why would financial institutions want to lend them cash to keep them afloat in the short term? We've already seen financial lenders take that $300 billion of the $700 billion and hoard it, not lending to even good, functioning companies. Why would they lend to a company that just went bankrupt? There might be no more GM, Ford, or Chrysler AT ALL if they aren't rescued.

Third, the Big 3 top level execs are responsible for the boneheaded decisions. Why punish millions of auto workers for the decisions of a few dozen stupid asses at the top? Bail them out, but put strings on it making them change the way they do business.

[AusDem]

8. potentially the simple answer is

That the government provide the bailout cash to banks in chunk by chunk basis.

"Find good, solid investments for this money; companies that have good business plans, are growing, are recruiting, are expanding or investing, and lend out the money. You'll only get more once you can prove to us that the the first chunk has been lent out, that your credit books are filling up, and that you're ready for another capital infusion. Sure some of those companies may not make it, but them's the breaks.

Additionally, if the new administration wants to be serious about the promise of $150Billion invested in Green technology, they should provide added incentives as part of the bailout money. E.g. if you lend money to a company that is driving R&D in, or production of products/services that will reduce carbon impact, you will get a tax break on any returns that you get from that investment. Maybe even make the damn thing tax free. See how that gets people moving along.

Do the same thing for key infrastructure projects, or anything that will benefit the community as a whole and help the country tide over the recession. The rules should of course be tightly monitored, and its absolutely necessary that there is absolute impartiality in the way the money is given to banks. They need to compete for, and make use of this money, not just take it and sit on it!

Force accountability! This will make banks actually do what they are supposed to do, go out there and get good returns for investors (this time of course being the government).

[4lbs]

9. I totally agree. Also, give the Big 3 the rescue money, but put hard regulations and qualifiers on

the funds.

1.) Executives must forfeit any and all bonuses, stocks, and dividends until the company is solvent and repays the federal loan. Relatively low base salaries only (~$250,000). Just the executives. No salary restriction on the millions of auto workers.

2.) The money must be used only to make better fuel efficient vehicles. Thus, no 2010 Ford Explorer SUV unless it gets at least 24 mpg city, not the 14 mpg it is getting now. However, GM should revive the Geo Metro 4-door sedan that got 40+ mpg easily.

3.) All transactions and contracts must be transparent and easily viewable by a federal overseer at any time, to make sure no irregularities occur.

4.) Since they are sucking at the federal teat for the short term, it would be kind of a conflict for them to lobby Congress. Get rid of the lobbyists.

[GOTV]

14. Why can't the top level execs be held accountable?

Tell them "Fine, we give you the loans but we're taking 90% of your net worth as an application fee".


> First of all, which consumer is going to want
> to buy a car from a company that went bankrupt,

If the price is cheap enough they will buy it. It's not our fault their financial mismanagement has given them a lousy reputation. Now they'll have to do what any other company with a poor rep has to do. Price their products too low to ignore.

[tclambert]

10. A key point Alison got wrong is that they aren't asking to be given the money. They want a loan.

And they intend to pay it back, like Chrysler in 1979.

Two other points people keep missing:

1) Management was stupid in not producing enough fuel efficient cars. But they are fixing that. You can see the progress if you look. The completely new lines of cars designed since gasoline prices rose so sharply 3 years ago are not ready yet. They need one or two more years. It takes that long to design, prototype, test, and ramp up for production when you are talking something as big as an automobile.

2) The immediate problem with the car companies is not their fault. It is the mismanagement of the financial sector that caused a plummet in sales. Toyota sales were down 26% in October, too. Everybody buys cars on credit. Rumors of economic depression and car company bankruptcy don't help sales, either.

[safeinOhio]

11. Stop with the blame excuse

How about the difference in an economic downturn and a full blown depression. We gave, GAVE the banks and AIG how fucking much money? 15 times as much? they aren't worst idiots? Save the fucking economy? Lets see what happens with 3 million more out of work and an industry wiped out. Let the transplant companies take over? Their sales are down 25% to 33% fort the month also. A depression will also wipe them out. Ok, you economic neo-cons on this board, I'm sure the free market will led the way with a rise in the equine industry to supply transportation to our new 19th century market driven economy. I'll take Krugmans' advice over Milton Friedmans any day..

[GOTV]

13. I'm fine with giving the industry the loans. But if we all have to suffer...

... those at the top should suffer hardest.

[GOTV]

12. Man, I hate these lame-ass TV interviews

Here they are talking like there's only two options: Give them what they want or there goes the auto industry. They keep bringing up how stupid these guys at the top are and then Paul pretends - and Alison lets him - that there's nothing else we can do.

How about removing the idiots that run these companies.
Take their bonuses, stock options, dividends, and anything else we can get to punish these selfish miscreants who mismanaged our auto industry for personal profit.
Find someone else to take the job for a small multiple of an assembly person's wages.

Hell, I'd be willing to run an auto company into a wall like an imbecile for 250K a year.