Guest: Debbie Stabenow, Thaddeus McCotter, Simon Johnson, Chris Kofinis, Matt Lewis, Austan Goolsbee, Jane Hamsher
High: President Obama rejects the U.S. automakers‘ restructuring plan.
Spec: Barack Obama; Automotive Industry; General Motors; Rick Wagoner; Chrysler; Economy
DAVID SHUSTER, HOST (voice-over): Tonight, President Obama rejects the U.S. automakers‘ restructuring plan.
BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: These companies and these industry must ultimately stand on their own, not as wards of the state.
SHUSTER: It‘s a big setback for GM and a potential death sentence for Chrysler.
GOV. JENNIFER GRANHOLM (D), MICHIGAN: This industry has to survive if this nation is going to manufacture things. It‘s the backbone of the manufacturing sector.
“Follow the Money.” A top economist says our government is now run by the finance industry and warns a Great Depression is coming.
Later, the Obama team gave GM‘s CEO a pink slip but gave the bank CEOs a White House lunch.
UNIDENTIFIED MALE: It was a cooperative, pleasant meeting.
SHUSTER: Team Obama lands in “Hypocrisy Watch.”
Plus, the nutty rhetoric continues from Rush Limbaugh, Michael Steele and Sarah Palin. Palin stands by her complaints about the McCain campaign.
GOV. SARAH PALIN ®, ALASKA: ... but nobody that I could find that I wanted to hold hands with and pray with.
SHUSTER: Senator McCain responds.
And the things I thought you should know: Tom Harkin‘s popcorn machine, Hoosier hysteria, and Twitter time, all tonight on 1600 PENNSYLVANIA AVENUE.
OBAMA: We‘ve got a lot of work to do.
SHUSTER: Talk about harsh—day 70 of the Obama administration.
And welcome to the show, everybody. I‘m David Shuster.
Today, President Obama soundly rejected restructuring plans from bailed-out U.S. automakers General Motors and Chrysler, saying the plans did not go far enough and don‘t show a realistic path to future viability. As a result, in a dramatic and controversial move, the administration is taking control, laying out its own plan for each company and for the first time, publicly raising the possibility of letting the companies go bankrupt.
(BEGIN VIDEO CLIP)
OBAMA: What I‘m talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts, even as workers staying on the job, building cars that are being sold. What I‘m not talking about is a process where a company simply is broken up, sold off, and no longer exists. We‘re not talking about that.
(END VIDEO CLIP)
SHUSTER: But with the threat of bankruptcy looming tonight, both GM and Chrysler are moving quickly to act on the administration‘s plan. And GM CEO and Chairman Rick Wagoner has resigned as part of the Obama administration‘s demand for fundamental restructuring within the company. GM will get an additional 60 days of capital to come up with a newer, stronger proposal, that includes showing an incredible model for succeeding in a competitive market.
For Chrysler, the Obama administration‘s plan is even tougher, saying Chrysler cannot survive on its own. The administration is giving Chrysler just 30 days to secure a deal with foreign maker Fiat, which has shown interest.
If the partnership deal is approved, the White House will authorize up to $6 billion more of federal funding. If the partnership doesn‘t happen, Chrysler is dead.
The U.S. auto industry has lost nearly half a million jobs in the past year alone. And the situation is dire for the Rust Belt states and hundreds of communities that are home to auto assembly plants and related factories. As it stands, unemployment in Michigan is now up to 12 percent. In Indiana and Ohio, the rate is over 9 percent.
This morning, President Obama tried to speak directly to autoworkers who have lost their jobs or whose jobs are now in danger.
(BEGIN VIDEO CLIP)
OBAMA: There‘s little I can say that can subdue the anger or ease the frustration of all whose livelihoods hang in the balance because of failures that weren‘t theirs. But there‘s something I want everybody to remember. Remember that it is precisely in times like these, in moments of trial and moments of hardship, that Americans rediscover the ingenuity and resilience that makes us who we are, that made the auto industry what it once was, and what it will be again.
(END VIDEO CLIP)
SHUSTER: Still a very, very tough day for Detroit.
And joining us now is Michigan Senator Debbie Stabenow. She‘s a Democrat.
And Senator Stabenow, your reaction to what the president did today?
SEN. DEBBIE STABENOW (D), MICHIGAN: Well, David, I think you would have to call this tough love. I mean, the very end of what you quoted the president saying is that the auto industry, that it will be. And in the end analysis, I believe that this president and the auto task force are committed to a stronger, viable auto industry.
These are very, very tough times for us. No question about it. But when I step back and look at the fact that two weeks ago, they were committing $5 billion for suppliers to keep them viable, when I look at today, they could have walked away, they could have looked at those plans and walked away and said we‘re done. And they didn‘t do that.
They said we‘re going to create a process to get to viability, to get the debt off of General Motors so they can be viable long term, and to support a partnership with Chrysler and Fiat. So I know it‘s tough for all of us, but I have to say, when you really look at it, and you‘re talking to the president directly last night, I believe he‘s committed to a viable auto industry, American auto industry. And I also very much believe he‘s committed to working with us in communities where plants have been closed, where there‘s a lot of work that needs to be done to create new jobs in those communities.
I think he‘s going to do that.
SHUSTER: Senator, did the president ask you for your advice or did he tell you, here‘s what we‘re doing?
STABENOW: Well, I‘ve been involved, as have colleagues, every day in talking with the auto task force about sharing information from my staff, making sure they were up to date. They went to Michigan. They saw what‘s happening with the great new technologies that GM and Chrysler are putting forward with electric vehicles, and so we are spending time with them talking on a regular basis.
And, you know, I‘m not going to say that I wouldn‘t have preferred that they just said, yes, they‘re viable and let‘s go. But they also didn‘t so no, and I appreciate that. I think this is a very important continuous process that we‘re in.
SHUSTER: But they did say—I mean, at least in Chrysler‘s case—that if this deal with Fiat doesn‘t work out, Chrysler is going to go into bankruptcy.
I mean, what would it mean for the state of Michigan if either of these two companies goes into bankruptcy?
STABENOW: Well, it‘s not just Michigan. I mean, obviously, it would be devastating for Michigan, but one out of 10 American jobs are connected directly or indirectly with the auto industry. We can‘t let that happen in this country.
We can‘t lose the capacity to manufacture, and we also can‘t lose our capacity to be able to make trucks that are now going to Iraq, or to be able to make tanks or other parts of our national defense. So not having an American auto industry I don‘t believe is the answer. What we‘ve got to do is help them be viable.
And what I heard more than anything else from President Obama today is that he‘s committed to hanging in there to help them get to viability. And so I want to thank him for that and I—we‘re going to continue to push him. We‘re going to continue to push on every front with the auto task force, but the reality is I think we have a partner that‘s trying to help us get there.
SHUSTER: Michigan Senator Debbie Stabenow, a Democrat from Michigan.
Senator, good of you to join us tonight. We appreciate it.
STABENOW: Thank you.
SHUSTER: You‘re welcome.
Some Republicans are outraged at the Obama administration move to essentially take the wheel of GM and Chrysler, saying that the U.S. government has no business running private companies.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN ®, ARIZONA: So, instead of sending General Motors and Chrysler into the prepackaged bankruptcy that they deserve, we now have taken the unprecedented step of firing the CEO of General Motors, a remarkable move by the federal government, I think unprecedented in the history of this country.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
OBAMA: Let me be clear. The United States government has no interest in running GM. We have no intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.
(END VIDEO CLIP)
SHUSTER: Joining us now is Congressman Thaddeus McCotter, a Republican from Michigan and member of the Financial Services Committee.
And Congressman McCotter, what could Rick Wagoner have done any differently?
REP. THADDEUS MCCOTTER ®, MICHIGAN: Well, I think obviously if you go back through the past, he could have begun a restructuring process sooner. But really, at this point in time to us, it‘s a question of why ask Mr. Wagoner to leave when you have 60 days standing between a very difficult viability plan that has to come forward and a potential bankruptcy?
SHUSTER: Do you believe, then, that they cannot get a viability plan in the next 60 days and that this is essentially it for GM and Chrysler?
MCCOTTER: No. I think that what you‘ve seen is the question of how many more job losses are required to make a viable plan? How much more do the retirees have to sacrifice to get to a viable plan that the White House determines will be successful in the case of GM? And then you add that to the 30-day deadline for Chrysler to merge with Fiat.
These are key questions that are constituents are asking because it‘s their futures that are directly affected.
SHUSTER: Do you think there‘s a double standard between the automakers and the bailed-out banks?
MCCOTTER: I think so. I think we in Michigan have seen it.
We‘ve never begrudged going through the process to show that we were viable in the first place with the bridge loans. That‘s what had to be done. But we‘ve also seen how other institutions that have received 10 times the amount have not had to do so, and we‘ve also seen the treatment of Mr. Wagoner versus how the Wall Street financial institution CEOs were treated and pledged the cooperation of the administration.
SHUSTER: Well, we are going to deal with that later in our show in “Hypocrisy Watch.”
But I want to read for you what Senator Minority Leader McConnell said today about the bailout and get your reaction.
He said, “Republicans in Congress called for true reform before bailouts last year. Automakers were given billions instead. Republicans called for an end of funding enterprises that refused to demand reform for management, labor and investors; each refused.”
Do you agree?
MCCOTTER: No. I think that one of the problems that we‘re running into is the way that the initial credit market freeze was handed by the Congress with the Wall Street bailout, with the throwing of the billions at the companies to re-capitalize them. And I think that that actually led to a retardation of the ability of the markets to freeze up—to free up.
That has been what has been the major cause of the lack of credit to buy cars, the number one problem facing all auto companies, foreign and domestic, as well as for GM and other companies that were restructuring to roll over their short-term commercial paper. So this is—no, I do not agree with that.
SHUSTER: Congressman, do you believe that, based on what President Obama did today, that the big three are headed towards some sort of renaissance? Or are we looking at the beginning of their funeral?
MCCOTTER: No, I think that the companies will come back stronger. Obviously, we would have liked to have more specifics so that we can help answer questions of our constituents and be prepared for the job losses that will follow, for the sacrifices the retirees will have to make. But in the end, have no doubt, Michigan will be back.
SHUSTER: And how are they going to do that? I mean, is it because of this new technology? I mean, how much more pain does Michigan have to go through? How much more pain are your constituents going to have to confront before you can turn the corner?
MCCOTTER: Well, that is a question regarding the viability of the companies in the next 60 days for GM and 30 days for Chrysler. But the reality is, the innovations and much of what‘s been going on through the restructuring process to date that has so often been overlooked by the public as a whole will continue. It will be intensified. And you will continue to see products such as the Chevy Malibu and others that Americans do want to buy and that are cutting edge innovations.
SHUSTER: Congressman Thaddeus McCotter, Republican from Michigan.
Congressman, good of you to join us tonight. And good look to you and all your constituents.
MCCOTTER: Thank you, Mr. Shuster.
SHUSTER: You‘re welcome.
Up next, you will meet the economist who says we are headed towards a Great Depression. He says dramatic changes are needed, started with the breaking of influence of Wall Street powerbrokers.
At the half-hour, Republican Michael Steele has done it again. His latest rhetoric is confusing and strange. But it‘s nothing compared to Rush Limbaugh‘s latest creed.
The GOP all-stars, we will have their latest at the half-hour.
And we‘re taking your questions and video suggestions over Twitter.
Just go to Twitter.com/shuster1600 or click on the link at
SHUSTER: With the Obama administration giving the auto industry some tough love, today critics are asking, what about Wall Street? Former chief economist of the IMF, Simon Johnson, is among them. He contends the finance industry has effectively captured our government.
The finance industry does not really manufacture anything, it moves money around and, yet, over the past decade, as bankers placed more and more value on the paper they bought, bundled and sold, the industry share of the U.S. economy skyrocketed and accounted for 40 percent of all U.S. business profits. Those profits, deserved or not, gave the financial industry enormous clout in Washington, enabling regulations to be written or not written to benefit Wall Street at your expense. If banks are not reigned in, Johnson warns, “What we face now could, in fact, be worse than the Great Depression.”
Johnson makes the argument in the upcoming edition of “The Atlantic.” He is a professor at MIT‘s Sloan School of Management and was chief economist at the IMF in 2007 and 2008.
Simon Johnson, welcome.
SIMON JOHNSON, MIT SLOAN SCHOOL OF MGMT.: Nice to be with you.
SHUSTER: What do you mean by worse than the Great Depression?
SIMON: Well, I think there‘s a view out there, there‘s a presumption, that‘s it‘s not going to be so bad in terms of the full—in output, in terms of the amount of unemployment in terms of how things last. My point is that it could easily be as bad or worse because the financial sector has got itself so massively overextended and so entrenched in terms of political power. It‘s going to be very hard to break that.
SHUSTER: You mentioned that over the past decade—and we‘ve got a graph to illustrate what you wrote about in “The Atlantic”—that Wall Street rewarded itself very generously. Pay shot up more than 180 percent, compared to the average worker, and the linkage between the financial sector and Washington became stronger.
A lot of people though argue that what‘s good for Wall Street is good for Main Street.
SIMON: Well, certainly we need a healthy financial sector in this country. No question about it.
But the financial sector became too big. We had a massive bubble. We thought about housing, we thought about dot-coms. Behind all of that was this massive increase in financial services.
It went too far. It‘s going to deflate. That‘s going to be painful.
And then I think we can get back on to a better track.
SHUSTER: When you look at what happened to the auto industry today, is that the sort of model that you would like to see or that you think is inevitable with the financial industry if we‘re going to save ourselves here?
SIMON: Yes, I do, actually. I think that the government‘s involved, the government is committed. President Obama said there will be an auto industry in the United States going forward. But they‘re obviously being tough.
And when you fire a CEO, you‘re sending a very clear message. And I think the message in particular to the auto industry is, guys, unless you get serious, you will go bankrupt, and the bankruptcy court will sort things out. So, do you want to do a better deal with the government or go through bankruptcy? They‘ll say the same thing to finance sooner or later.
SHUSTER: You say there are basically two ways out, two things that have to be done. First, nationalize the banks. Regardless of what you call it, the government has to take it over in some fashion. And the second point, the one you just mentioned, break the oligarchy.
Which one of those two, in your estimation, would be more difficult?
SIMON: Both pretty difficult. I think we‘ve already nationalized it to some degree. We already have a degree of—the government actually said a couple of weeks ago that Vikram Pandit, the CEO of Citigroup, will stay on. Now, that‘s obviously about state control, when you decide who is and is not going to be the CEO.
So I think it‘s about going to be rationalizing the way in which the state is involved and the way that government money is committed to the banks. And then breaking the oligarchy is going to be really tough, because those big banks that survive are more powerful than they were before because there‘s few of them left.
SHUSTER: I want to talk about the Wall Street/Washington corridor on that very point. Here are some of the names that have gone back and forth:
Robert Rubin, who was the treasury secretary under the Clinton administration; Henry Paulson, the treasury secretary in the Bush administration, a long, career on Wall Street; John Snow; Alan Greenspan. And then when you look simply at the Goldman Sachs alumni, Robert Rubin, Hank Paulson, Jon Corzine.
Why do these connections—why do they get in the way of sound policy? Because the argument is, wait a second, these people know better than anybody how to keep Wall Street greased and how to keep the economy moving.
SIMON: Well, obviously you need some experts. You need some people who know what‘s going on in the financial sector.
But I think it‘s the degree to which we‘ve let the top people on Wall Street become the top people in Washington and go back and forth. It‘s a little bit unhealthy.
And I hear this from a lot of people in finance. A lot of people on Wall Street working outside of these massive firms complain. They say they‘ve become too powerful and they distort the playing field away from what some people call true bankers towards these very particular kind of financial conglomerates.
SHUSTER: And the argument being—that you‘re making—is that when you take a look at AIG or some of these others, when they say they‘re too big to fail, that that‘s a problem to begin with.
SIMON: It‘s a huge problem. Anything that‘s too big to fail, it becomes a problem for all of us, but for the taxpayer and for every government. Any kind of government is going to face the same problem. Anything that‘s too big to fail, I would suggest, is too big to exist.
SHUSTER: Simon Johnson, who did some of these bailouts with the IMF, and a terrific piece in “The Atlantic.” And I recommend everybody read it if you want to understand part of the big problem in Washington and on Wall Street, and why so much of this matters.
And Simon, thanks so much for coming.
SIMON: My pleasure.
SHUSTER: Coming up at the half-hour, the GOP all stars, the latest bizarre rhetoric from Sarah Palin, Michael Steele and Rush Limbaugh.
You don‘t want to miss this.
Plus, Barackatology. President Obama‘s NCAA picks took a severe beating over the weekend. It‘s all coming up on 1600.
SHUSTER: Welcome back to 1600.
Just 48 hours after giving lunch to bank CEOs at the White House, the Obama administration this weekend forced the CEO of General Motors to resign.
And that takes us to tonight‘s “Hypocrisy Watch.”
First, the background.
Make no mistake, our nation‘s banks and our nation‘s top automakers are very different, and their role in our economy is very different. Nonetheless, the Obama administration is in the process of exhausting most of the $700 billion in bank bailout money Congress approved last fall. According to Treasury Secretary Timothy Geithner, so much has been doled out, that there is only $135 billion left.
On Friday, many of the bank CEOs who contributed to the economic mess and whose companies needed and received bailout funds met with President Obama at the White House. They described the meeting as pleasant. Afterwards, the CEOs were asked if any of them felt they owed the American people any apology for needing help.
(BEGIN VIDEO CLIP)
KEN LEWIS, BANK OF AMERICA CEO: I think there are very few financial institutions that would not say we haven‘t made mistakes and feel awfully bad about the mistakes that we have made.
(END VIDEO CLIP)
SHUSTER: But the question was, do you owe the American people an apology? The apparent answer from the CEOs was no.
(BEGIN VIDEO CLIP)
LEWIS: At some point we have to stop talking about the past and talk about the present, and talk about all of the great things the commercial banks are doing in their communities.
(END VIDEO CLIP)
SHUSTER: Now, contrast that with the attitude from General Motors‘ CEO Rick Wagoner. Last December, he acknowledged a multitude of mistakes at GM. And in advance of his testimony to Congress, Wagoner apologized for needing to ask taxpayers for help.
This weekend, the Obama administration forced Wagoner to resign.
(BEGIN VIDEO CLIP)
OBAMA: It‘s a recognition that will take new vision and new direction to create the GM of the future.
(END VIDEO CLIP)
SHUSTER: Now, that may be true. And perhaps Rick Wagoner is not the right guy to lead GM. But a lot of those bankers President Obama lunched with on Friday also don‘t represent a new direction. Some key executives who put AIG in the ditch still remain at AIG.
And you heard Ken Lewis, the CEO of Bank of America. His company has taken $45 billion in bailout money. But Lewis still cannot muster the words, “I apologize.”
When you treat bank CEOs to lunch at the White House and then order the CEO of General Motors to resign, that‘s hypocrisy. And it‘s wrong.
Up next, how offensive can Rush Limbaugh be? We will show you.
Plus, the latest bizarre comments from RNC chair Michael Steele and the prayer battle between Sarah Palin and John McCain.
A GOP roundup.
Plus, Twitter is free. So why are two tweets costing Dallas Mavericks owner Mark Cuban a whopping $25,000?
SHUSTER: Welcome back to 1600 PENNSYLVANIA AVENUE. As President Obama prepares for his trip to Europe tomorrow and a spotlight on the world stage, it‘s hard to miss the Vaudeville act here at home in the Republican party. The GOP all stars are at it again.
Republican National Committee Chair Michael Steele said last week his fight with Rush Limbaugh was by design. Now says he is done with President Obama.
(BEGIN VIDEO CLIP)
MICHAEL STEELE, GOP CHAIRMAN: I like the president personally, even though I think he‘s got a little thing about me. I haven‘t quite figured out what that is.
UNIDENTIFIED MALE: You haven‘t spoken to him? You‘ve reached out?
STEELE: No. Several times and I‘m done.
UNIDENTIFIED MALE: Is there any professional jealousy?
STEELE: Not on my part. What would I be jealous of?
UNIDENTIFIED MALE: He‘s the president of the United States.
STEELE: I‘m chairman of the RNC. What‘s your point?
(END VIDEO CLIP)
SHUSTER: If Michael Steele doesn‘t make you sad, well, then there‘s radio host Rush Limbaugh, no longer with content with wanting the president to fail, Rush is now calling out Mr. Obama as a girly man.
(BEGIN VIDEO CLIP)
RUSH LIMBAUGH, RADIO TALK SHOW HOST: I tell you what‘s really scary about U.S. foreign policy right now is that Hillary Clinton is incompetent. The scary thing is she‘s twice the man Obama is. That illustrates just how precarious our circumstance is.
(END VIDEO CLIP)
SHUSTER: Speaking of precarious, then there‘s GOP favorite Alaska Governor Sarah Palin. She‘s blaming her ‘08 electoral loss on the McCain campaign and God?
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN ®, ALASKA: So I‘m looking around for somebody to pray with. I just need maybe a little extra. And the McCain campaign, love them, there are a lot of people around me, but nobody I could find that wanted to hold hands with and pray.
(END VIDEO CLIP)
SHUSTER: Joining us now is tonight‘s political panel. Chris Kofinis is a Democratic strategist and communications director for John Edwards. Matt Lewis is a writer at AOLPoliticsDaily.com. Welcome to you both.
Let‘s start with Michael Steele. Last week we heard that every move of his was part of a grand plan. Watch this.
(BEGIN VIDEO CLIP)
STEELE: I am a cause and effect kind of guy. If I do something, there‘s a reason for it. Even if it may look like a mistake, a gaffe, there is a rational, there‘s a logic behind it. It helps me understand my position on the chess board. IT helps me understand, you know, where the enemy camp is and where those inside the tent are.
UNIDENTIFIED MALE: It‘s all strategic?
STEELE: It‘s all strategic.
(END VIDEO CLIP)
SHUSTER: It‘s all strategic. Matt Lewis, do you believe Michael Steele?
MATT LEWIS, AOLPOLITICSDAILY.COM: Let me just say, if I make any mistakes tonight, it‘s all strategic.
SHUSTER: He‘s the chairman of the Republican National Committee. Do you believe him?
LEWIS: No, I actually don‘t. I think that was pure spin. By the way, I‘m surprised that Michael Steele is even out there again. I thought he was doing better when he was being quiet. I‘m actually surprised to see him back on television right now. Howard Dean had this same thing happen when he first became chairman.
SHUSTER: Not like this.
LEWIS: Not quite like this. But Howard Dean had enough sense to sort of stay away from TV for a while. Michael Steele should learn that.
SHUSTER: Chris Kofinis?
CHRIS KOFINIS, DEMOCRATIC STRATEGIST: Michael Steele, Sarah Palin, Rush Limbaugh, it‘s like a bad ‘70s band. They‘re the Bay City Rollers of American politics. Every time you think it can‘t get worse, they put out a new song or two and it makes it worse. I mean, it just kind of leaves you speechless. It just says to me that there is a circular firing squad within the Republican party. There‘s no leaders. There‘s no strategy. There‘s no message. There‘s no idea where they‘re going.
So all these various characters are trying to fill the void. They‘re doing real damage.
SHUSTER: Matt, why doesn‘t a Republican get up and say, you know what, Michael Steele is a joke? He should not be leading our party?
LEWIS: Let me do that here. I‘m not a huge supporter of Michael Steele. Having said that, I do think that we need to have this ideological fight. I think that, you know, look, right now there are problems. There‘s no doubt about it. Parties have gone through this before. And we need to fight it out. I think, at the end of the day, it wasn‘t that long ago, in 2005, the Democratic party was essentially a joke. I‘m not writing off the conservative movement or the Republican party.
KOFINIS: This is not like what I think happens to every political party when you go through a series of defeats. This is more than just a debate within party circles about whether we should be moving in one direction or another. This is a fundamental problem, strategic problem within the Republican party that they have no conception, I think, of where the country is right now.
SHUSTER: It‘s not even about politics. Let‘s take a look at Sarah Palin. Sarah Palin, in that clip, was blaming John McCain because she wanted to pray before the vice presidential debate and she couldn‘t find anybody around the McCain campaign who wanted to pray with her. Now, whether or not you necessarily believe that, here‘s what John McCain‘s response was on “Meet the Press” when he was asked whether he would support the person he wanted to be a heart beat away from the presidency. He was asked, would you support her in 2012? Watch.
(BEGIN VIDEO CLIP)
DAVID GREGORY, “MEET THE PRESS”: In terms of future leaders of the Republican party, would you like to see Sarah Palin become president?
SEN. JOHN MCCAIN ®, ARIZONA: I would like to see her compete.
GREGORY: Would you support Palin?
MCCAIN: I would have to see who the candidates are and what the situation is at the time.
(END VIDEO CLIP)
SHUSTER: Maybe John McCain needs to consult with his spiritual adviser, but seriously --
LEWIS: This is much to do about nothing. Ronald Reagan it in 1988 didn‘t even endorse his own vice president, George Herbert Walker Bush, until May of that year. We had Al Gore not endorsing Joe Lieberman for president. I think it‘s perfectly acceptable and even predictable that John McCain wouldn‘t come out and endorse her now. But he very may in 2012.
SHUSTER: In the history of Republican politics, or even Democratic politics, Chris, have you heard of any politician who after the election criticizes the person they were running with because they couldn‘t find anybody to pray with? That seems like a bizarre—
KOFINIS: This has been going on now for months with Governor Palin, where she seems to blame everyone but herself for the trials and tribulations of the campaign. What‘s bizarre of what Senator McCain said, if you step back and think about it for a moment, here we were a few months ago, where he was touting Governor Palin as someone who was ready to be a heart beat away from the presidency. Now, a few months later, we‘re now realizing that not only is he not going to do, you know, give a ringing endorsement, he clearly has doubts.
I will go out on a limb, not much of a limb. I can guarantee it, almost guarantee it that there‘s not a chance that he will endorse Governor Palin when she runs for president.
LEWIS: Ronald Reagan in 1988. Remember, George Herbert Walker Bush was in a tough primary last year. Jack Kemp was in the race. Bob Dole was in the race. President Reagan didn‘t even endorse his own sitting vice president until May of that year. We had Al Gore not endorsing his vice presidential pick. I think this is a media-manufactured story.
SHUSTER: A part of the media is Rush Limbaugh, who has, according to his own count, 20 some million viewers. Rush Limbaugh used the word dike when talking about flooding in North Dakota. That was not the context that he was using it. He was talking about Democratic female politicians. That kind of stuff, where does that—why do people listen to Rush Limbaugh?
LEWIS: He‘s amazingly good.
SHUSTER: He‘s amazingly offensive. He‘s offensive. Would you acknowledge that?
LEWIS: I actually lived in North Dakota for a while. I have friends in North Dakota. I understand the sensitivity when you have this sort of tragedy going on.
SHUSTER: He wasn‘t talking about flooding.
LEWIS: It was a light-hearted moment.
KOFINIS: This is the problem.
LEWIS: Conservatives are often criticized for being uptight and buttoned down.
KOFINIS: That‘s not funny. Being offensive, I think—
LEWIS: On air for 15 hours a week you might occasionally—
KOFINIS: I don‘t think it‘s an excuse for being that offensive. The reality here is that Rush Limbaugh has such a powerful voice in the Republican party speaks volumes as to where the state of the Republican party is right now. He is, for all intensive purposes, the ideological soul of the Republican party.
SHUSTER: We are going to continue this conversation after this break.
Chris Kofinis, Matt Lewis are sticking around.
Up next on 1600, we‘re going to talk about white collar versus blue collar. Is there a double standard when it comes to government bailout? We‘ll ask Austan Goolsbee, a member of the White House auto task force.
Plus, the president drops below 50 percent in a new poll. The White House doesn‘t need to be too worried about that.
Your Twitter questions are coming up at the end of the hour. Just go to Twitter.com/Shuster1600. Or use the link at Shuster.MSNBC.com.
(BEGIN VIDEO CLIP)
OBAMA: I‘d like to speak directly to all those men and women who work in the auto industry, who live in countless communities that depend on it. Many of you have been going through tough times for longer than you care to remember. And I won‘t pretend that the tough times are over. I can‘t promise you there isn‘t more difficulty to come. But what I can promise you is this: I will fight for you. You‘re the reason I‘m here today.
(END VIDEO CLIP)
SHUSTER: Welcome back to 1600. President Obama spoke directly to workers today, after announcing two of the big three—two of the big three‘s days are numbered. The White House told General Motors it has 60 days to submit a new plan for viability, while telling Chrysler it has 30 days to find a partner. Very tough talk.
For more, let‘s bring in a member of the president‘s auto task force, Austan Goolsbee. He‘s the chief economist on the president‘s economic recovery advisory board. Austan, why shouldn‘t Americans think there‘s a double standard, one for the auto makers, another for the bailed out banks?
AUSTAN GOOLSBEE, WH AUTO TASK FORCE: I don‘t think that‘s an accurate description. Even within the automakers, it‘s clear that the two companies, GM and Chrysler, are very different. And they‘re facing different challenges. The president acknowledged that today.
Then if you compare them to banks, they‘re in totally different lines of business.
SHUSTER: Let‘s stop at the top with the CEO. You got rid of Rick Wagoner, asked him to resign. How come the administration didn‘t ask John Thain to resign, Lloyd Blankfein to resign, Vikram Pandit from Citigroup? How come none of them got asked to resign? Their roles in Goldman Sachs and the AIG bailout?
GOOLSBEE: The head of AIG stepped down, the head of Fannie Mae, the head of Freddie Mack. I don‘t think it‘s accurate to say that there are no financial institutions where they didn‘t ask for a change in the management.
SHUSTER: There are a lot of financial institutions that have not had any change in management, right?
GOOLSBEE: Yes. The question I thought is, in what ways are they similar or different? The similarities of GM that they need to have a change of leadership because they‘ve got to do something fundamentally different, make themselves viable, is similar in that sense to Fannie Mae or Freddie Mac or AIG or any of the other companies, where they said, look, you‘ve got to have a fundamental restructuring, and it takes new management.
SHUSTER: Austan, you‘re a very smart guy. You have a very smart team there. What do you guys think GM could do in 60 days that it hasn‘t done already?
GOOLSBEE: I think, as the president outlined today, the key stake holders in this thing, everybody‘s got to put some more skin in the game. You‘ve got the bond holders, you‘ve got the workers, you‘ve got the dealers, the suppliers. There has been a feeling among, say, the bond holders, people viewing the bond holders, that they were holding out on the thought that, well, maybe the government will just put them on life support and keep bailing them out no matter what. And, therefore, they don‘t need to make concession.
What the president laid out today is we‘re going to have tough concessions. They have to be viable. He believes they can be. There is every reason to think that they will make a series of changes, fundamental changes that put them on a different path.
SHUSTER: Why should Fiat or anybody else, though, partner up with Chrysler, given the review that you guys gave of Chrysler, essentially saying we don‘t see a path towards viability for them?
GOOLSBEE: Well, the thing that the president said, and what the auto task force felt was appropriate is there‘s no path to viability for Chrysler as a stand alone enterprise. It‘s simply not big enough. If you look at the successful auto companies around the world, they are all bigger than Chrysler. So a company could partner with Chrysler and it would be a viable enterprise. But as a stand alone entity, Chrysler has got some major challenges.
SHUSTER: Austan Goolsbee, a major player at the Obama White House, also a good guy. Austan, thanks for coming on.
GOOLSBEE: Thanks for having me.
SHUSTER: You‘re welcome. For more, let‘s bring in our panel, Matt Lewis, a blogger and writer for AOLPoliticsDaily, and Jane Hamsher, blogger at FireDogLake.com, who has written about the automakers longer than anybody I know. Jane, your reaction to what we discussed?
JANE HAMSHER, FIREDOGLAKE.COM: I don‘t know how making Chrysler
bigger is going to make anything better. That seems to be how we got into
the problem in the first place. I‘m actually going to challenge the people
who think the administration is being hypocritical here. Yes, they are
with regard to CEOs. But frankly, when they‘re saying to the bond holders
this is all about the bond holders—when they‘re saying to them, you finally have to take a haircut, they are saying that to Wall Street, because that‘s who‘s holding the bonds.
The question is, now, will they do that to the banks as well? If you took the too big to fail banks, who have probably a balance sheet worth about 12 million dollars, about 67 percent of that is unsecured debt. If they wrote that down 50 percent, the taxpayers wouldn‘t have to pay anything. Why aren‘t they doing that?
SHUSTER: Matt Lewis, how come they‘re not doing that? How come they‘re not putting the same pressure on those banks that are being put on the bond holders, essentially, that are helping with the automakers?
LEWIS: What I think about it doesn‘t matter as much as the fact that it‘s arbitrary. This is what the—this is the problem when you let government pick winners and losers. What happens is, instead of letting merit or success determine who succeeds and who fails, you have this sort of arbitrary situation, where Barack Obama and his advisers get to pick winners and losers.
And, you know, what the market really needs more than anything is certainty. And if you‘re an investor out there, going to start a business or if you‘re a stock holder, whatever, you honestly don‘t know what‘s going to happen. Some people—this started under Bush with Lehman—you know, Lehman Brothers gets bailed out. Other people fail. It‘s very, very dangerous and very bad for the economy.
Right now, there‘s this schizophrenic White House. I could be cynical and say hey, if you‘re a rich banker, you get bailed out; and if you‘re a blue-collar worker in Michigan, you don‘t. I would do that. I‘m not going to play the populist card.
SHUSTER: What happens if Chrysler—they‘ve got 30 days—if this deal with Fiat doesn‘t work out and Chrysler goes bankrupt, do we know what the unintended consequences might be?
HAMSHER: I don‘t really know what they hope to achieve by joining it together with Fiat. Originally, the Fiat deal was supposed to be they got the right to manufacture Fiat‘s car in the United States. That usually takes a very long time to adapt. So I don‘t know what they‘re hoping. They may very well be saying, Chrysler, we‘re going to let you go, and try to save GM. It really does seem to be about restructuring GM‘s bond debt.
SHUSTER: Is there a total problem for the White House? We mentioned it in hypocrisy watch that the bank CEOs, they get lunch at the White House. Some of them describe it as pleasant. And Rick Wagoner gets shown the door.
HAMSHER: I think there is a tonal problem. A lot of it has to do with the fact that we were told the AIG bonuses could not be restructured because we are a country of laws, says Larry Summers, and we can‘t break our contract. Yet, here we sit with GM, saying, we will not let you continue with the company unless you break your contracts with your bond holders. So there is a double standard here.
LEWIS: There‘s political hypocrisy, too. Remember, John McCain was just torn up for saying that, you know, some of these jobs in Michigan aren‘t going to come back. Barack Obama said that last week and there wasn‘t a problem. I wonder if folks in Michigan are going to maybe see things differently politically in the next couple of years.
SHUSTER: That‘s an interesting question as well. We‘re going to hold on to Matt and Jane. We‘re going to bring in Chris Kofinis, back from the penalty box.
Coming up, a basketball celebration in my hometown of Bloomington, Indiana.
And a big celebration for popcorn on Capitol Hill today. The things I thought you should know are next on 1600.
(BEGIN VIDEO CLIP)
GENE HACKMAN, ACTOR: Thinking about winning or losing this game. If you put your effort and concentration into playing to your potential, to be the best you can be, I don‘t care what the scoreboard says, at the end of the game; in my book, we‘re going to be winners. OK?
All right! Let‘s go.
(END VIDEO CLIP)
SHUSTER: The movie “Hoosiers,” one of the greatest sports movie of all times, at least to me. We‘ll get to the latest Hoosier hysteria in just a minute. But there‘s a lot going on today. Here are a few things I thought you should know.
The first involves popcorn. Yes, popcorn. It was honored on Capitol Hill today at Senator Tom Harkin‘s office. The Democrat from Iowa held a ribbon cutting ceremony for a brand new popcorn machine. It‘s replacing one that‘s been in the office for 25 years. Senator Harkin says the best popcorn comes from Iowa. Quote, “in our office, we gather around the popcorn machine, not the water cooler. Since the best popcorn comes from Iowa, it only makes sense to have it available to all of our visitors in the nation‘s capitol.”
Next, visitors to the White House will likely not see a March Madness bracket victory, at least not in the Oval Office. The NCAA Final Four is set, and President Obama‘s picks turned into a disaster. The president was wrong on Louisville, wrong on Pittsburgh and he was wrong on Memphis, which lost to Missouri in the semifinals. The president did get one region correct. Mr. Obama picked North Carolina, which beat Oklahoma. The president has North Carolina winning the whole tournament.
Speaking of winning it all, and despite all the attention on the NCAA tournament, there is nothing quite like the Indiana High School Basketball tournament. As many of you know, I grew up in Bloomington. Allow me to invoke the anchor privilege for this next one.
This past weekend marked the culmination of the Indiana High School Basketball Tournament. The players, coaches, students and fans you see going crazy on the video, they are from Bloomington. This year, the Panthers went undefeated, 26 and zero. They swept through the tournament, won the championship and brought home, in spellbinding fashion, Bloomington‘s first state basketball trophy in 90 years.
Hoosier hysteria, indeed. This year, it belongs to the Panthers of Bloomington High School. From a proud alum, congratulations.
Those are a few things I thought you should know.
And now it‘s Twitter time. And Twitter is no longer free, well, at least for Dallas Mavericks‘ owner Mark Cuban, who, by the way, went to college at Indiana University in Bloomington. This weekend, Cuban was fined 25,000 dollars by the NBA for complaining about the officiating during Friday night‘s game versus the Denver Nuggets.
Here‘s what Cuban Tweeted after the game: “How do they not call a tack on JR Smith for coming off the bench to taunt our player on the ground?”
Cuban didn‘t stop there and said on another Tweet, still complaining about the officiating. On Sunday, his followers got this Tweet. “Just found out got fined 25 K by NBA. Nice.” As one reporter put it, Cuban was fined 510 dollars for each word on Twitter, which prompted this response:
“Can‘t say no one makes money from Twitter now. The NBA does.”
Cuban says he‘s now thinking about setting up what he calls an incog-Tweeto account, so he can write whatever he wants. Wow.
Back with us now are Matt Lewis, Jane Hamsher and Chris Kofinis. Twitter time. And we‘re get a lot of questions. First, any reaction to the pun-manship of Mark Cuban, Chris?
KOFINIS: I guess he really does not like the officiating at the NBA.
LEWIS: Good thing there are only 140 characters allowed. It could have been a lot worse.
SHUSTER: Jane, let‘s start with you. A couple of people have written in asking about predictions for the auto industry. What do you think is going to happen?
HAMSHER: I think the bond holders are in a game of chicken with the administration. I think that they‘ll get some of what they want. There are financial reasons why the administration isn‘t going to want to take GM into bankruptcy. I think that they‘ll probably get a little more than the deal they‘re being asked to take now.
SHUSTER: What about Chrysler?
HAMSHER: Chrysler may go. I think they may decide to put Chrysler—
Chrysler‘s on life support. I think that Chrysler may finally realize that they can‘t do anything. Hopefully by the time they have to make that decision, GM will have an answer to their problem.
SHUSTER: Chris Kofinis, a number of questions. People want to know about the Democratic strategy. When you look up and see Sarah Palin, Rush Limbaugh, Michael Steele doing what they‘re doing, what should the Democratic strategy be the next couple weeks? Especially when the president is overseas? There might be something of a vacuum here at home.
KOFINIS: I think to some extent you‘re seeing it play out. You‘re seeing it play out in the special election, in terms of using Sarah Palin, Rush Limbaugh. They become, I think, powerful symbols to jazz up and excite the Democratic base. My guess is, what you‘re going to end up seeing in the coming weeks and months is be used as fund-raising tools and as the political punching bags that they‘ve become, to no fault but their own. It‘s just an ironic state, the Republican party is providing the Democratic party even better tools to fund raise.
SHUSTER: Matt, we did get a question specifically for you, based on a comment you made about not being offended by something Rush Limbaugh said. I want to give you a second chance on that. And the question is, if you‘re not offended would you like to come and work in North Dakota and throw sandbags down to stop the dikes?
LEWIS: I‘m not offended by Rush Limbaugh. I think it was maybe an unfortunate statement. I actually—if they‘ll help get me to North Dakota, maybe we could make this a whole thing. I have the hair to be, you know, to sort of be the news caster. I could do a live remote and help—
SHUSTER: There you go, North Dakota. Let‘s start the collection. Matt Lewis is ready to come work the sandbags. That‘s great. We‘ll keep everybody posted. Matt Lewis, thanks as always. Jane Hamsher, always a pleasure to see you. Chris Kofinis, he spent a few second in the penalty box, but that‘s OK. He‘s still one of our favorites. Great panel, appreciate.
That‘s the view from 1600 PENNSYLVANIA AVENUE tonight. I‘m David Shuster. Remember, get the latest political news and a sneak peek of what‘s going on the show sent straight to your inbox with the 1600 Daily Briefing. Sign up at Shuster.MSNBC.com or text Penn to 622639 to have alerts sent to your home. If you Twitter, I‘ll be online right after the show at Twitter.com/Shuster1600.
I‘m David Shuster. “HARDBALL” with Chris Matthews starts right now.
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