THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
Guests: Pat Buchanan, Richard Wolffe, Lawrence O'Donnell,
Chuck Todd, Mort Zuckerman, Eric Schmidt
MIKA BRZEZINSKI, HOST: Tonight, President-elect Barack Obama rolls out his economic team. Will Geithner, Summers, Romer and Barnes be able to tackle the tough road ahead? Plus, what he said about the big three and a possible Detroit bailout.
Also, Hillary Clinton, what the world can expect from madam secretary working inside 1600 PENNSYLVANIA AVENUE.
Fifty-seven days until the inauguration of President-elect Barack Obama.
Welcome to the show. I'm Mika Brzezinski, in for David Gregory.
My headline tonight, "Taking Care of Business."
While declaring, "We don't have a minute to waste," President-elect Obama made it clear today that he is serious about getting the country and the local economy back on track. Stressing the need to act swiftly and boldly to prevent millions of job losses next year, Obama assured Americans that he's got big plans for both Wall Street and Main Street.
In what was a clear attempt to restore confidence in our financial future, the president-elect unveiled his economic advisory team today, far earlier than usual. Assuming the helm, four leaders that he says possess both the experience and innovation to tackle the long list of economic woes. They are New York Federal Reserve president Timothy Geithner as treasury secretary; Larry Summers, former Clinton treasury secretary, as the director of the National economic Council; top economist Christina Romer, as chair of the Council of Economic Advisors; and former chief counsel to Senator Ted Kennedy Melody Barnes will be the director of the Domestic Policy Council.
The president-elect expressed confidence in not only his leadership choices, but in the American resolve.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I have full confidence in the wisdom and ingenuity of my economic team, and in the hard work, courage and sacrifice of the American people. And most of all, I believe deeply in the resilience and the spirit of this nation. I know we can work our way out of this crisis because we've done it before.
(END VIDEO CLIP)
BRZEZINSKI: He outlined an ambitious agenda to tackle key facets of this country's crisis, and there are many-setting goals to stabilize our financial system; addressing the growing foreclosure crisis; helping the big three automakers as they face bankruptcy; rebuilding the federal infrastructure; saving jobs. The list goes on.
This all come on the heels of yet another bailout on Wall Street. The government will rescue one of the country's largest banks, Citigroup, in an agreement to inject $20 billion of new capital and guarantee roughly $306 billion of troubled assets.
Today was step one for President-elect Obama. He plans to follow up today's rollout with remarks tomorrow about the "cuts and sacrifices" the nation will need to make in the days ahead.
In a minute, I'm going to be joined by a key member of the Obama transition economic advisory team, Chairman and CEO of Google, Eric Schmidt.
But first, I want to turn to two of the brightest minds from the political and financial worlds respectively. Chuck Todd, NBC News political director, and Mort Zuckerman, chairman, editor-in-chief and publisher of "US News and World Report," and also chairman and publisher of "The New York Daily News."
Gentlemen, thanks very much for joining me. I gave you no choice this morning on "MORNING JOE."
Chuck, Mort, both of you, first a quick headline on how this rollout went-Chuck.
CHUCK TODD, NBC NEWS POLITICAL DIRECTOR: Well, I think they did a-
Obama did a pretty good job. It is interesting in how he is trying to extend this an extra day. It kind of feels as if now he is playing a little bit of politics, by trying to stretch it out over two days rather than put everything out there. Today was the economic day.
TODD: Let it all sink in. You know, keep having surrogates talk about what you want to get done.
He did seem to have a charge to Congress which said get me a stimulus pan as quick as you can. If you can get it to me on my desk on January 20th, I'll sign it. So that was the one headline that I think people missed, was he did issue, I thought, some orders to Congress.
BRZEZINSKI: Mort, was it a strong enough message that he put forward in his tone and in the content/ And what do you make of this two-day rollout of remarks about the economy?
MORT ZUCKERMAN, "US NEWS & WORLD REPORT": Well, let me just concentrate on the fiscal policy side of it...
ZUCKERMAN: ... which is really critical, because that is the only way that we're going to move the economy, given the fact that lending is not really taking place, monetary policy is going to have a limited effect. So fiscal policy is going to have to make the difference.
And I must say to you that I'm really intrigued by the team he has put together. I'll tell you a wonderful story of Tim Geithner.
When one of the investment banking firms was literally going down the tubes, Bear Stearns, a lot of people in the financial world were trying to put pressure on him not to get back into a lot of over-regulation. They said even though the elf-regulation didn't work that well, it's the only way to really run the financial system.
And he said, you know, self-regulation is to regulation what self-importance is to importance. I mean, that's a wonderful way to respond to this kind of pressure. And any man who can come up with that kind of line is going to be able to handle that world very well. And it's going to be very important.
So I think he's going to do a lot of very good things. But the problems are unprecedented. We are in the most difficult financial circumstances frankly in our history.
BRZEZINSKI: Go ahead, Chuck.
TODD: And politically, he took over-he took-a responsibility for the economy is maybe too strong. But he came out and said, you know, working on this economy now. I've instructed these folks to start working on this now.
He even said that he would be trying to find out exactly what Hank Paulson and President Bush had wanted to do next with TARP if that was done before Inauguration Day. So he is-whatever pressure was put on him to say, you've got to talk about the economy now, you've got to lay out your team now, and you've basically got to take responsibility for what's happening now from here on forward, he said fine.
BRZEZINSKI: And briefly, Mort, here's what you write in your magazine. "We have never before had to deal with simultaneous bursting of bubbles, of excessive debt that have plagued the financial system, the American consumer and the American housing world. Nobody knows where the bottom is."
There are several echoing this, Mort.
"People who say they do are either ignorant or serving their own interests."
Is the bottom something that we're not going to know about for a while? And could it be very bad?
ZUCKERMAN: Well, I think there is a chance that it could be very bad. I think the good news is that Obama and his team understand you can't even wait until January the 20th to begin addressing this problem, because the longer it goes with a downside momentum, it tends to compound itself and feed on itself, and then it makes the problem infinitely more difficult. So if they can get things done earlier, it will save enormous amounts of problems that would have occurred in his own administration when that begins in January.
But there's no doubt, it could get very, very bad. I think it's going to absolutely dominate everything that's going to be going on in this country for the next couple of years. There's no way of avoiding it because we're going to see a huge increase in unemployment, a major drop in retail sales, a great deal of anxiety in the American public.
ZUCKERMAN: And he's got to show that he is addressing these issues.
BRZEZINSKI: Chuck, I want to bring in now a member of President-elect Obama's Transition Economic Advisory Board.
Joining me now, the Chairman and CEO of Google, Eric Schmidt.
Mr. Schmidt, thanks very much for joining us.
We've heard from Mort Zuckerman, we've heard from Tom Friedman that this could be a situation of unprecedented crisis, a situation that we may never have seen in our history. Does Barack Obama, the president-elect, have a handle on the crisis? Is he underestimating it in any way? Is there any concern he may be?
ERIC SCHMIDT, CHAIRMAN & CEO, GOOGLE: Thanks for having me back.
These guys understand. These guys are in a hurry. This is all happening faster than any other transition for a reason.
If you look at what's happening, this huge contraction that Mr. Zuckerman talked about, and all of a sudden, we have to get the government to bail out Main Street, as well as Wall Street. If you don't act quickly, what happens is it just spirals down and down and down. So hopefully this economic team-and I know these members are very, very smart-will get ready by January 20th, which can't happen fast enough.
BRZEZINSKI: Yes-Chuck Todd.
TODD: Eric, I understand, you know, obviously you were able to build your company without a lot of government intervention or government help. But what is it that you would like to see government do so there is another Google-I'm not saying that about your business per se-or that there are a thousand wannabe Googles that pop up, that start creating new jobs and moving this into a 21st century economy?
SCHMIDT: Well, it starts with confidence. And the most important thing is that people have to believe in the financial system, that banks are lending, and so forth and so on.
At the same time, you've got these huge problems around jobs. The president-elect talked about 2.5 million jobs being saved or created. And you'll get that out of, for example, moving money into the states and local cities which are hurting terribly.
And also investing in infrastructure. He's highlighted energy, of course, rebuilding the energy infrastructure. A huge opportunity for new startups-buildings, roads, and schools, things that matter to the average citizen. He'll take people who are currently out of work and get them working again.
TODD: But those seem like old economy jobs. What about some new economy jobs?
SCHMIDT: But at the moment, we have to get jobs going. New economy jobs come from a financial industry and a notion of innovation. The good news is that innovation is alive and well in America. In fact, the president-elect has called for doubling the research funding for thing like science in the next year's budget.
BRZEZINSKI: Mort Zuckerman?
ZUCKERMAN: What do you do, for example, as Chuck was saying, I think, in the new economy? Could we do different thing? Provide scholarships? Provide more than for the sciences in our colleges and universities in order to expand that? Would that be a help?
SCHMIDT: It would. The issue that these guys have is they have to move quickly. So they have to use the mechanisms that are in front of them right now. They have to use existing programs to get money flowing into people so that they're not afraid to go to the store, they're not afraid to pay their mortgage, that they're not terrified about whether they're going to lose their job or not.
Again, the economic engine of the United States has this amazing ability to create new companies, new jobs, new careers. We're in much better shape than, for example, Europe, on the same issues.
BRZEZINSKI: All right. Chairman and CEO of Google Eric Schmidt, on the Obama transition team.
Thanks very much for joining us on 1600 PENNSYLVANIA AVENUE tonight.
SCHMIDT: Thank you.
BRZEZINSKI: Chuck Todd, see you bright and early tomorrow morning.
Get some sleep.
TODD: Yes, ma'am.
BRZEZINSKI: Mort Zuckerman, thank you very much. I appreciate it.
A lot happened today that will determine the direction of this country and its financial future. Tonight we're looking at all of the angles of President-elect Obama's economic rollout.
Up next, meet the players who will lead this economic team. What experiences and ideas will they bring to the table, tackling the challenges ahead?
In our next half-hour, CNBC's Dylan Ratigan will join me to assess what the president-elect said today about the two top priority issues-a stimulus package and a potential automaker bailout. And we'll look at the big picture, the role the current and future president plays in restoring confidence in the economy.
It's all ahead as 1600 PENNSYLVANIA AVENUE continues.
(BEGIN VIDEO CLIP)
OBAMA: We'll need to bring together the best minds in America to guide us. And that is what I sought to do in assembling my economic team. I've sought leaders who could offer both sound judgment and fresh thinking, both a depth of experience and a wealth of bold, new ideas.
(END VIDEO CLIP)
BRZEZINSKI: That was President-elect Barack Obama this morning introducing team members of his economic team.
Joining me now to talk about today's appointment are Lawrence O'Donnell, former chief of staff to the Senate Finance Committee; Richard Wolffe, "Newsweek" senior White House correspondent; and Pat Buchanan, former Reagan White House communications director, Nixon speechwriter, and former presidential candidate himself.
All three MSNBC political analysts.
Gentlemen, thanks for joining me.
Pat, I want to read you something, Steven Pearlstein from "The Washington Post."
"This group is made up of proteges of Robert Rubin, who advocated deregulation, free trade, balanced budgets in the '90s. Some of these policies may be at the root of Citigroup's current problems."
What do you make of the group, Pat? And do you agree?
PAT BUCHANAN, MSNBC POLITICAL ANALYST: Well, I think Robert Rubin has got real problems with Citigroup...
BRZEZINSKI: He might.
BUCHANAN: ... and bears a measure of responsibility for that mess. But I do think there is no question that Summers and Geithner, who are the key players, I mean, they were treasury second and deputy at the end of the Clinton administration. They're heavyweights.
I think the markets have reacted favorably. I think it's-I mean, I have no criticism whatsoever. I do think they may have a problem in this -Lawrence Summers suffers from an enlarged ego.
BRZEZINSKI: Oh dear.
BUCHANAN: And the fact that he's going to be on the White House staff when his former deputy is probably going to be the most famous treasury secretary since Andrew Mellon, I think could present some problems of fiction.
BRZEZINSKI: Well, that is a good question, Lawrence O'Donnell. I mean, there is the ego and the personality issues that always plague White Houses and lead to some problems, and even resignations or firings.
Do you see a potential problem there? He is known for his personality. I would think that they would take that under consideration.
LAWRENCE O'DONNELL, MSNBC POLITICAL ANALYST: Well, look, administrations are frequently team of rivals...
O'DONNELL: ... in the sense that they are rivals for the president's attention. But to call Larry Summers a protege of Bob Rubin is absurd.
O'DONNELL: It couldn't be a more ridiculous frame to look at him. He was the youngest professor to get tenure in Harvard's history. That's in three centuries.
His mother is an economist. His father is an economist. You might think maybe he is a protege of the Summers' school of economics. He has two uncles who are Nobel Prize winners.
So he was a giant in this field long before he met Bob Rubin, and he served in the Treasury with Rubin, but he also served with Lloyd Bentsen as the first treasury secretary that he worked for. No one says he is a Bentsen acolyte. So this kind label make no sense at all.
BRZEZINSKI: All right.
Richard Wolffe, let's try a different angle then. And this is from David Brooks.
If I can say word, I'll be able to read this to you, "valedictocracy." "Even more than past administration, this will be a valedictocracy ruled by those who graduate first in their high school classes. If a foreign enemy attacks the United States during the Harvard/Yale game any time over the next four years, we're screwed."
"The personnel decisions have been superb. The events of the past two weeks should be reassuring to anybody who fear that Obama would veer to the left or would suffer self-inflicted wounds because of his inexperience. He's off to a start that nearly justifies the hype."
Is it a valedictocracy, Richard Wolffe?
RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Oh, don't ask me to pronounce that word.
BRZEZINSKI: I tried. I did a terrible job.
WOLFFE: Very good. I'll ask you about Ahmadinejad next.
BRZEZINSKI: That I can handle. I don't know why. But take it away.
WOLFFE: Look, these are brilliant people that he is-intellectually brilliant people that he's choosing. Politically brilliant, depends on their effectiveness.
I think Pat is right in one sense, that Larry Summers has an abrasive quality to him. He is a very, very gifted academic economist, for sure, which is why it makes sense to have him in the White House, rather than having to deal with Congress and having that sort of political showmanship that comes with being a cabinet secretary.
The question is, are any government ideas up to the challenge here?
What is the scale of this problem?
Is the financial meltdown something that the government can fix, or is the economy going to have to grow itself out of these problems? And can you jump-start that with (INAUDIBLE) style spending?
I mean, look, they're not going to be short of good ideas, they're probably not going to be short of resources. This is the best team a Democratic president could get in terms of economic brainpower. We just don't know if they're up to the job because we haven't seen this kind of challenge for two or three generations.
BRZEZINSKI: Well, clearly, Richard, the brainpower is there.
BUCHANAN: Yes. I mean, this really is (INAUDIBLE) on methadone, quite frankly. You know, we've got $700 billion in a bailout, another $700 billion in a stimulus package. You've got a $455 billion deficit last year.
Throw in AIG and Citigroup and the rest, we're up to close to maybe $1.2 trillion to $2 trillion deficit. I mean, that is 10 percent of the entire gross national product.
We've never tried something like that before. Even in the New Deal.
Only in World War II.
Is it going to work? I don't know, but it's going to be tried.
Richard was saying this morning the Japanese tried something like that during the lost decade and it didn't work. And what they have got now is a debt that is 200 percent of their entire economy.
One other point, Mika. We don't have any savings. We're going to have to borrow this from the Chinese. What are they going to charge for this $1.5 trillion?
BRZEZINSKI: Oh, good lord. I don't know.
BRZEZINSKI: Go ahead, Richard, real quick.
WOLFFE: There is no supply side solution to this. There are no other ideas out there. So if you don't try to spend your way, if you don't try and stimulate your way out of this economic hole, then what else are you going to do, sit back and watch it happen? I don't think so.
BRZEZINSKI: I guess if you can't get a loan.
O'DONNELL: You know, 40 years ago, Pat's boss, Richard Nixon, said we're all (INAUDIBLE) now. I guess he didn't check with Buchanan when he said that.
But can I just go back to this issue of the temperament of Larry Summers?
I worked with him when I was the chief of staff of the Senate Finance Committee. His temperament in government is not what people are talking about. He is a perfectly cooperative person to work with. There were no rumbles about oh, he's got this kind of ego and he's a problem to deal with. All of that stuff, as far as I know, is made up by people who have not worked with him in government.
BRZEZINSKI: Listen, and I also don't mind a little spice in a personality. And usually brilliant minds come with a little bit of extra with them. I'm just saying. I mean, I've heard different things.
O'DONNELL: What would make you think that?
BRZEZINSKI: And Mike Barnicle, he tells me...
O'DONNELL: Who are you referring to when you talk about that?
BRZEZINSKI: ... you shouldn't have dinner with him.
BRZEZINSKI: Let's not go there. The segment is over.
BRZEZINSKI: Gentlemen, panel, thank you very much.
Up next, Obama's economic team took center stage today-you're trying to get me in trouble. But there is news on the foreign policy front as we learned who will be Hillary Clinton's deputy if she becomes secretary of state.
1600 returns right after this.
BRZEZINSKI: Welcome back to 1600.
In the midst of today's economic leadership announcements, we also have news about the future of the State Department. NBC News has confirmed that, barring unforeseen developments, Barack Obama is expected to name Jim Steinberg as his deputy secretary of state. Steinberg served as deputy national security adviser for President Clinton.
And speaking of the Clintons, the anticipation continues to build as we wait for the president-elect to name Hillary Clinton as his secretary of state. That's the topic of today's "Smart Take," which come to us from Peggy Noonan in "The Wall Street Journal," who writes this: "On the face of it, the apparent offering of the secretary of state job to Hillary Clinton is a clever, interesting choice. An experienced and sophisticated workhorse with her own standing in the country, and bearing a name that is popular in the world, will be the public face of the U.S. diplomacy."
"Mr. Obama gets to put her in a subordinate position while appearing to be magnanimous, and her seat in the U.S. Senate will likely be filled by a more malleable Democrat who won't be plotting from day one to get to the White House."
That's what she calls, Bob Shrum, a "threefer."
Joining me now, Democratic strategist Bob Shrum on the set here at 1600.
So, it's a good point.
BOB SHRUM, DEMOCRATIC STRATEGIST: Yes. I actually agreed with it until about the last sentence.
BRZEZINSKI: Oh, come on.
SHRUM: No, no. I mean, look, Hillary Clinton is an appointment that says this is a strong guy, that he has a lot of confidence, it's reassuring to the world.
SHRUM: I've just been at two NYU conferences on the election, one in Abu Dhabi, one in Italy. People were thrilled about Obama. They're euphoric, actually. He bears the burden of hope now, I think.
BRZEZINSKI: Yes, that is a burden.
SHRUM: But they were also very happy about Hillary Clinton. They have a sense that they know her. They think she'll be active and involved.
I think it is an appointment-you know, I was trying to think of something that is like this. In 1940, Franklin Roosevelt, on the eve of World War II, took Frank Knox, who had been the Republican vice presidential nominee against him four years before, and made him secretary of the Navy.
BRZEZINSKI: OK. But in this case, I mean, it was a pretty tough primary fight be between them, and she criticized his foreign policy very clearly, on very specific issues pertaining to specific countries. And also, you wonder if-and I think Tom Friedman brought this up, and certainly former Secretary Jim Baker brought this up on "Meet the Press" yesterday-will they have each other's back? Will they be seamless? When she goes and represents the United States to other countries, will she be representing Barack Obama?
SHRUM: I think she will. I think he's demonstrated that he is in charge. I think she understands that.
And if you believe that she's ambitious, for example, and wants to run for president in 2016, which I think she could do, she's got to play ball. She's got to be there, do a good job, and do the president's business. I have no doubt that's what she's going to do.
BRZEZINSKI: See, my gut is you have to put that aside if you're going to take a job like this, a job that is so-that really-well, quite frankly, sucks the life out of you. To be secretary of state or national security adviser, you're working on policy, you're working on international relations. You can't be running for president on the side. You can't do it.
Is there precedent for it?
SHRUM: Yes. Actually, most of our-many of our presidents in the early years of the republic were secretaries of state. Since then, there's been almost none. In fact, Al Haig was the last secretary of state to run for president, and he probably is not a recommendation for trying to go from that post to president.
BRZEZINSKI: Right, not a good example.
SHRUM: But I agree with you. And I think what you do is you draw back. You say, look, I may have ambitions for eight years from now, but for the next four, five or six years, I'm going to work very hard at doing this job right.
BRZEZINSKI: Bot Shrum, it's a threefer. It's a threefer.
BRZEZINSKI: Thank you very much for coming on tonight.
SHRUM: Thank you.
BRZEZINSKI: We're looking at all angles of the president-elect's economic rollout today. Coming up next, another stimulus package. It's on the way. How big will it be? CNBC's Dylan Ratigan joins me after the break, here on 1600 PENNSYLVANIA AVENUE.
BRZEZINSKI: Tonight, jump starting the economy. President Elect Obama rolls out his economic team and calls for a major stimulus package, as the federal government green lights another Wall Street bailout. But will the embattled auto makers be left on the side of the road? Plus, the president's roll in restoring economic confidence; what do the markets from want to see from the current and future residents of 1600 PENNSYLVANIA AVENUE?
Welcome back to 1600 PENNSYLVANIA AVENUE. Today, President-Elect Obama held his second news conference since winning the election. He rolled out his economic team, headed by Treasury Secretary Nominee Tim Geithner, whose first order of business will be a stimulus package.
(BEGIN VIDEO CLIP)
OBAMA: We have a consensus, which is pretty rare, between conservative economists and liberal economists that we need a big stimulus package that will jolt the economy back into shape. Across the board, people believe that this stimulus is critical and the first job of my economic team is to shape that economic stimulus package.
(END VIDEO CLIP)
BRZEZINSKI: Joining me now, a bunch of guys who know a lot about this, Dylan Ratigan, anchor of cNBC's "Fast Money," Harold Ford Jr., chairman of the Democratic Leadership Council and an NBC News analyst, and still with us, Mort Zuckerman, chairman, editor and chief and publisher of "U.S. News and World Report," and chairman and publisher of the "New York Daily News." Also with us, Pat Buchanan, former Reagan White House communications director and Nixon speech writer and former presidential candidate himself, also an MSNBC analyst. Wow.
Dylan, let's start with you. First of all, the rollout today of the economic team. Does it send a strong message? Are we looking forward to anything bright at this point?
DYLAN RATIGAN, CNBC ANCHOR: The real answer is nobody know. The good news is you're getting some people there. I think Mort and I were just talking about it right before the segment began. We are in a situation where things are actually worse in the economy in general than most people realize and likely to get worse than people realize. As a result, this is a time for very intense action relative to the economy. I'll let Mort pick up on that.
Again, once you understand the truth, which is that we were creating 40 trillion dollars for every trillion dollars that was out there on a lot of bad things, and we have chopped that off, we now need to take drastic action to deal with the consequences. Wouldn't you say, Mort?
ZUCKERMAN: Yes, I think that's right. The good news is I think they appreciate the nature of the problem, the extent of the problem, and how critical it is to get as much done as early as possible. The longer it goes on, the more it feeds on itself. And then it become much more difficult to deal with. The fact that they are getting started this early, and with, I might say, a first rate team of people who really are quite brilliant and knowledgeable about how this system works, is as good an indication as you can get at this stage.
It doesn't mean that hope alone is going to be enough. As we say, hope is a good breakfast but a poor supper. He is going to have to deliver at some point. And that is not-his expectations, the expectations cannot be too great. Otherwise, everybody will get disappointed and the confidence will erode.
HAROLD FORD JR., MSNBC POLITICAL ANALYST: He strategically positioned himself to do a lot of what Mort and Dylan are saying the night he gave his acceptance speech. He said look, this won't change in the first year. It may not change in the first four years. He reiterated that over and over today. It cannot be over-stated enough, a new team that has inspired confidence in many, largely because they are new. You're right, it is like picking the first draft, having the first draft pick, and a great quarterback. He's got a shoe contract. He's now got to go out and throw the ball.
You have to be encourage, I understand now, these four stimulus packages are going to stimulate spending and growth and, for that matter, activity among middle class people. That's one of the values he tried to reiterate in the campaign. He certainly emphasized that and it came through loud and clear today in his press conference.
BRZEZINSKI: Pat Buchanan, there are people calling for President-Elect Obama and President Bush to work together on something symbolic or even something more concrete between now and Inauguration Day. Where do you stand on that?
PAT BUCHANAN, MSNBC POLITICAL ANALYST: I would say yes. I think it ought to be-the immediate thing is the bailout. You simply cannot let your auto industry go down. Let me talk briefly, Barack Obama seems to be very cognizant of history, not only the team of rivals, but also the criticisms of FDR and the Federal Reserve in the Depression. The Fed, it was said, did nothing, sat on its hands. It didn't replenish the blood supply. And FDR was, frankly, too timid. So they have an enormously bold plan. As I said earlier, 10 to 12 percent of the entire Gross National Product in bail outs and stimulus packages.
The question is, however, is it going to work? We don't have that money and we're going to have to borrow it.
RATIGAN: There is a huge opportunity here on the confidence side, Mika, in so far has not been constructive for the building of confidence in markets. They've flip-flopped all these things. No transparency, they flip flop around, all this business. To the extent to which Tim Geithner has a blank slate, a new opportunity to come in. He has an opportunity to make the way the Treasury will deal with past funding more transparent. He has an opportunity, most importantly I think to Harold's point, because this will take years, not months, to make the methods of his decision making understood by as many as possible. So that if an as not only Geithner, but the rest of the administration is forced to change their view, the rest of the world can understand the methodology they're using to form their opinion, which is something we have lacked up to this point.
BRZEZINSKI: Dylan, there is one problem I need you all to address. Mort, take a jab at this and pass it along. David Ignatius, "The problem is that the bakes don't want to make riskier loans in this business environment. Who can blame them? They're looking over the edge of a cliff and they can't afford to make more mistakes, so they're sitting on a lot of the 159 billion dollars in government money that they've already received. The sad fact is that the global economic situation is continuing to worsen. The time has passed for bickering over who deserves government money and who doesn't. Just get it out the door. But will they lend it?"
ZUCKERMAN: This is exactly on point. Now look just at Citigroup.
Citigroup, we just find out, has over 300 billion dollars of toxic loans.
BRZEZINSKI: That's scary.
ZUCKERMAN: That's staggering. They've already written off 100 billion dollars or so. This is not typical-atypical. This is typical of most of the banks. They were all in this game. And we don't know how bad their loan book, as they call it, is. And they don't know how bad their loan book is. One of the things, just to give you an illustration, is credit card loans. A lot of them have credit card loans. They're all collateralized. They-the credit cards are going to be in terrible shape over the next couple years. And that is going to present another huge exposure to the banks.
They have to keep their capital to protect their own basic-
RATIGAN: Hey, Pat Buchanan, as the most experienced politician here, no disrespect intended to my friend Harold. Also the oldest-we won't get into that-what would your counsel be not only to Geithner but to all of those who have the opportunity to create a message here in this transition, as their counselor on communications, having born witness to recent events. What is your counsel?
BUCHANAN: I would first pick Zuckerman as my adviser. No, here's what I would do. What I would do is-the American people, as Mike was saying in the previous show, don't understand what this is all about. You need a spokesman out there to lay it out in simple-look, here's how we got into this mess. Here's what it is. And use simple and large numbers to explain exactly what is going on, what is happening. Try to build some confidence out there because the consumer is frozen up, too. Anybody that has any money is sitting on it, just like those banks are sitting on it, because they're scared to death their 401-K, their pension is gone.
FORD: To Pat's point, one of the advantages Obama has is that he is such a gifted communicator. You really can't overstate the point that both Dylan and Zuckerman have made. He has to get out more and more and explain where we are, where we're going and how we got here. Where we're going, why we're going there, and what the sacrifice we're all going to have to make and what it takes to get that. The more he does that, the more he explains that government may have to be the spender and investor of last resort, because consumers are tapped out. The banks aren't lending in large part and you find the global economy slowing down.
With all these factors converging at one, you have to have a smart, efficient-not only a smart team, but an efficient plan. They seem to be moving in that direction. And it has to be building confidence in markets that have watched over the last four weeks. Remember, we were told we didn't have a problem six weeks ago. We were told we did have a problem. We were told we were going to do one thing. Then we were told we were going to do another thing.
BRZEZINSKI: Go ahead, Pat.
BUCHANAN: The model would be-and I know it's a cliche-it's FDR's fireside chats. Except Obama as television. Obama can speak. He go out there and say look, we took another hit here. Here's what we're doing here. Here's what they are doing. We're going to keep at this. We're going to try things. Some of them may fail, but this is where we're going. And I think if he does that and brings the country along, I think it is the best thing he can do to rebuild confidence. There is none right now.
ZUCKERMAN: There are two constituencies. One is the financial world and the other is the public. The financial world, fortunately, is going to have somebody whom they can have confidence, which is Geithner and Larry Summers. That will help. They're going to have deal with them very, very on a regular basis as well, both in and out. That is in the public eye and outside of the public eye. And Obama will have to deal with the public at large.
BRZEZINSKI: Dylan, wrap it up.
RATIGAN: I think Pat hit it on the head. And I think we're all in agreement. If they are clear and consistent about the methods of the decisions they are making, the American public's willingness to accept different decisions goes up tremendously. When they say trust us, we've got it, and then they continue to change, you get yourself in a real problem.
FORD: When Barack said he would not write a blank check to the automakers, that sent a clear message to the auto manufactures, labor union and all that look, we're going to have to come to the plate and play together and sacrifice. I thought that may have been the most important point.
RATIGAN: The irony, however, what was disconcerting, is then we get in today, and we have the same 25 billion dollars the auto makers wanted, we give it to Citigroup without any conditions effectively on very cheap-that's where you lose confidence.
BRZEZINSKI: Hold that thought because that's the perfect transition. Stay right there. Up next, will Washington rescue Detroit? What President Elect Obama said about a possible bailout for America's automakers when 1600 PENNSYLVANIA AVENUE returns.
BRZEZINSKI: Welcome back to 1600 PENNSYLVANIA AVENUE: With today's announcement that the government has decided to invest 20 billion dollars in Citigroup and guarantee more than 300 billion dollars of the company's troubled assets, some are asking the question, what about the Big Three? Still with us to talk about what is next for the nation's automotive industry, Dylan Ratigan, Harold Ford Jr., and Pat Buchanan. I think it's a fair question at this point, Dylan, because the big three have been begging for some sort of handouts.
RATIGAN: I think the real question for the auto makers is not whether or will there be a bailout or should we, but how, which is the point that you made? In other words, ultimately, if these businesses need some form of government assistance, I find it hard to believe they won't get it, considering what is going on. The question is what will the terms be of that assistance.
FORD: I don't think there's any doubt. I think the president elect today made that clear. Money will be available. He said he was disappointed in the message, the strategy and the presentation made by the three automotive leaders. There are two conversations here. One is workers and suppliers and vendors and all of those associate. Two-Pat has raised this point a few times-what happens if we give up our auto industry, one of the fastest growing industries in the world? We are number one in important markets around the world, especially Asia.
Do we decide, with 100 million new vehicles being bought in China, that we don't want to be in this industry?
RATIGAN: People do drive cars.
FORD: This is the second question. I think we get so caught up-if your child is in an accident and the child needs emergency care, you don't show up and say what was in the kid's care? Were they drinking. You take care of your child. Then you figure out the steps you take to fix it.
BRZEZINSKI: But this child has been naughty. This child hasn't listened over the years.
FORD: That's true. But you're talking about-
RATIGAN: The child lit the house on fire.
BRZEZINSKI: That's a bad child. That's a bad team.
RATIGAN: That's why America is frustrated.
FORD: To Dylan's point, what are the term? This administration, listening to President-Elect Obama, they understand there have to be tough terms. They're going to define them.
BRZEZINSKI: Let me put this to Pat Buchanan. Is the auto industry a naughty child that just needs help or a bad seed that is unhelpable?
BUCHANAN: It is not like Citibank. What did Citibank do? We're talking about 200 billion of toxic paper these idiots bought.
RATIGAN: They created it, Pat.
BUCHANAN: The automotive companies, OK, they were building the big SUVs and selling them like hot cakes. And there was a sudden turn of the wheel. And now everybody wants a Prius. They have problems but they are successful companies in terms of selling millions and millions of cars. Their problems are legacy costs for what? Health care for workers, pensions for workers.
But Citibank and GM have this in common. If either one of them goes town, they drag an awful lot of people down with them who are totally innocent. And you can't let that happen. We can let that-we can let the gambling casinos go in Las Vegas. You can let restaurants go. You can even let networks go. You cannot let the auto industry go.
RATIGAN: And pat made a variety of good points there. I think one critical thing to think about, whether it is the banking institutions, the automakers or health care, this is all one systemic problem. In other words, one of the reasons why the automakers have the problem they have is because the auto workers are paying for the health care of millions of people who do not work there. So, in other words, if you want to solve the car problem, you have to solve the health care problem. You want to solve the car problem, you need to solve the credit problem.
Until we look at this as a holistic problem, a systemic problem in our economy, which is what it is, we will have more and more problems.
BRZEZINSKI: You're calling for a money party.
RATIGAN: We had that. It didn't work out.
BRZEZINSKI: It sound like another one is starting.
RATIGAN: You presume that the only way to solve this is to spend a vast sum money. There are other ideas out there for health care.
BRZEZINSKI: We're giving this money out, Dylan, without transparency.
We don't even know where it is going.
RATIGAN: I'm well aware. To get started on the current administration's treatment of tax payer money is a different TV show. But my point is when you think about the car makers, think about health care in America.
BRZEZINSKI: Harold and Pat, Paul Krugman on the Citi bailout-this is what Paul says, "A bailout was necessary, but this bailout was an outrage, a lousy deal for the tax payers, no accountability for management, and just to make things perfect, quite possibly inadequate so that Citi will be back for more." That's true. Won't they? I mean, won't they?
BUCHANAN: I think that's right. Look, if they have 300 billion in bad paper, the 20 billion isn't going to do it at all. I do agree, there ought to be accountability for these executives and the boards and everything else there, up there. I think Krugman has a point here. It is the banks, quite frankly, that to me are far-they're the greatest villains in this whole thing. All of them violated their own basic rules of conduct and behavior. Dylan has talk about the 40 to one and 30 to one leverage. They shouldn't have been doing that and they all know that.
BRZEZINSKI: And Citi did that.
FORD: We find ourselves in a horrible moment. I don't know what we - the president or his team, if they sit and try to look backwards, as the president said today, they are not going to solve these problems. You have to figure out how-Pat, you said it best. Citi and GM, if there is a problem and they go down, they drag a lot of innocent people down. The problem and his team I think are not only mindful of that, they're sensitive to that and they're focused on it as they try to develop a new agenda.
You have to look forward. I know Pat agrees with that and Dylan has been saying that.
RATIGAN: To add on to what Harold was saying, the outrage only gets you so far. There is a point at which you feel helpless. We will all agree that it is outrageous. What do we do? We know we have wasteful corporations. We know we have inefficient corporations. We know that we have corporations that are incorporated in the state of Delaware and share holders are not able to move those states out where they're protected. We could actually change a law in this country that allows share holders to take companies out of Delaware and move them to another state where we would have more accountability for those executives.
How do you do that? Well, you need a bigger fish. Carl Icahn has created-Carl has his pluses and his minuses, but Carl has created the United Shareholders of America at IconReport.com to pursue exactly that agenda, changing that Delaware law so there is more accountability for the executives. There are thing we can do is my point.
BRZEZINSKI: I think you're absolutely right. Stay right there. We have more work to do. Harold Ford Jr., thank you very much. See you tomorrow morning.
FORD: Look forward to it. To be clear, we're going to be on "MORNING JOE" together.
BRZEZINSKI: That's true. Sorry about that. Pat Buchanan, thank you very much. OK. Up next-Wow! runaway train this show is tonight. How can the president-elect restore confidence in the markets? And how can the current president help him? We're going to talk about that when 1600 returns right after this.
BRZEZINSKI: Welcome back to 1600. With the economy in turmoil, wild swings in the stock market and President-Elect Obama saying things are likely to get worse before they are going to get better, how long could it take to turn things around? Back with me now, cNBC's "Fast Money" anchor Dylan Ratigan and Mort Zuckerman, chairman, editor in chief and publisher of "U.S. News and World Report" and publisher of the "New York Daily News." I'm getting good at that. Morning and evening.
First of all, I'd like a headline from you both. Mort, I'll start with you. How do you think Barack Obama did in his rollout today in terms of restoring confidence? Was it a good start?
ZUCKERMAN: I think it was an excellent start. I think it was as much as he could possibly do. And I think he really indicated to the country that he is prepared to move on a large scale and to move quickly. You can't ask for anything more than that, particularly since he announced a first rate team.
BRZEZINSKI: He did.
RATIGAN: He's done everything up to this point that he has influence over well. He has spoken well. He accepted the election well. He presented himself well today. Now it just comes down to our conversation earlier, which is can they execute and can they include the country in the navigation of a long and difficult process, in a way that keeps the people with the administration.
BRZEZINSKI: What about including the president-the present administration in some sort of plan. A lot of people are expressing a lot of consternation about the next 60 days, waiting this long for anything to really get going. Do we have this kind of time?
ZUCKERMAN: No, I don't think we have this kind of time. I think it is not just 60 days. It could be 90 days or 120 days. Those are a critical 120 days or even 60 days. There has to be a lot of cooperation with the Bush administration and vice versa. The problem is, we only have one president at a time. So how that is going to actually operate is quite critical.
I do think at least on the economic side, that the second of the treasury will work with his designated secretary of the treasure, because he has been directly involved all the way along in all of this stuff.
BRZEZINSKI: We have one minute left. I want to squeeze something in. That is on November 13th, this is Secretary Paulson talking about how the banking system is stabilized. Can we play it or should I read it? He says "I believe the banking system has been stabilized. No one is asking themselves anymore, is there some major institution that might fail and that we would not be able to do anything about it. So I think that is a positive. I think our major institutions," Dylan, "have been stabilized. I believe that very strongly." Citigroup.
RATIGAN: Hank Paulson was an advocate of the leverage that I speak of so frequently. Hank Paulson was compensated handsomely as the CEO of Goldman Sachs, and Hank Paulson has lost all credibility on this. He has no credibility. So whatever. He can say what he wants, do what he wants. The American people get it.
BRZEZINSKI: But the guy getting all the money and funneling-we don't know where it is going.
RATIGAN: I'll lay it out. We all know the facts. He has no credibility.
ZUCKERMAN: It is a problem. I don't want to diminish his competency in other areas. He has zero credibility as treasury secretary. Geithner I think is really going to be a terrific and fresh face. Let's move on with that.
RATIGAN: Look to the future, truly.
BRZEZINSKI: We will move on. We will look at the future. Mort Zuckerman, Dylan Ratigan, gentlemen, thank you very much. See you on "MORNING JOE." And that is the view from 1600 PENNSYLVANIA AVENUE tonight. I'm Mika Brzezinski. Thank you for watching. I'll see you bright and early tomorrow on "MORNING JOE" starting at 6:00 am Eastern time right here on MSNBC and then back again tomorrow night on 1600 PENNSYLVANIA AVENUE. "HARDBALL" with Chris Matthews is straight ahead.
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