Krugman vs Will on the Auto Bailout
By Heather Monday Dec 15, 2008 2:00pm
Paul Krugman takes on George Will on This Week about the very serious consequences to our economy if GM is allowed to go into bankruptcy.
Stephanopoulos: Let's move now to the economy. The other big issue of the week and Paul Krugman let me bring you in and get you to respond to McCain's defense of not rescuing the auto companies. He's saying basically until they change their ways and the way they do business we shouldn't be stepping in.
Krugman: The problem is time. The problem is yeah we ought to have, and I think a lot of people are talking about structuring something where we're calling it a structured bankruptcy, maybe it won't be called that, but a reform, get current management down, abrogate a lot of the contracts, probably a lot of the benefits to retirees where one way or another it could be shuffled off to the tax payers. All of this stuff to keep those companies going with but ah you know a lot of give backs, but it can't be done over night and the problem is these companies are on the verge of disappearing over night. This was, everything he said was an argument for why you should give them a short term bridge loan but nothing more than that and we can do the right thing.
But you can't expect them to come up with a plan before Christmas that's going to do everything he's saying and they should have done it years ago but they didn't and that's where we are now. Are you prepared to let probably a million plus jobs disappear in the middle of the worst recession since the nineteen thirties.
Stephanopoulos: So isn't it a sad policy the times demand it?
Krugman: It's a question of the policy giving you a little bit of time to work out the good policy. It's you know, this is, these are not normal times.
Will: Paul refers to the companies and all three are in the same boat in a sense but this is all about General Motors. Ford is not asking for money now. It only wants access to a line of credit in case there is what it calls a major industry event which means the bankruptcy of the, well the failure, General Motors is bankrupt but that is General Motors not being able to pay its bills to the three thousand parts suppliers in this country to which the three companies today owe thirteen billion dollars which is one billion dollars short of the fourteen billion dollars they're asking for.
Krugman: But that's exactly the point. We have an industry that's highly interdependent. These are not stand-alone integrated companies. They draw on the same network of suppliers. If any one of them goes down, and in particular General Motors goes down, all three go down. And so the point is, we need to work this thing out. We can't do it before… before January 20th. Um, are you prepared to make the awesome decision to allow the core of the traditional US auto industry to disappear because you weren't prepared to - you know, you wanted everything on your plate all at once - or are you prepared to pay all the …
Will: (crosstalk) But it won't …
Krugman: … It will. The suppliers will disappear. The companies will - you know, the plants will disappear, it will be a shell of its former self. We will have and continue to have an industry, the new auto industry.
The lead to the opposition to the bailout was lead by the, ah Senator Corker the Senator from Nissan which has two plants in its national headquarters in Tennessee so we will, it's not the whole industry but it's a very important part of US industrial structure. Do you want to make that decision by default?
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Will's intelligence is overrated ("I'm not an intellectual but I play one on TV") but at least he's smart enough to be intimidated by Krugman.
Will is a buffoon! He's too ignorant to realize how stupid he is. He should thank god for MSM wingnut welfare.
"The Senator from Nissan." Love it!
And it ought to be just enough to get the reigning Nobel Prize winner for economics booted from ABC's Sunday morning program of "conventional wisdom" peddling.
I want to hear/see some talk about how potential car buyers are going to behave in the wake of a big 2.5 bailout.
Economists generally prove to be bad predicters of human behavior.
It's buyer behavior that will determine whether the big 2.5 sink or swim.
More importantly, what wasn't talked about when it was possible that a bailout wouldn't happen was these UAW Union workers were being balmed for the ills of a company that these same workers overwhelmingly purchased the products of, by people who most likely did not purchase.
You wanna try this one again?? I have absolutely no idea what you just said.
Shitheads republicans bitching about Big 3 companies going under blamed the Union. Union members (and their families) tend to purchase Union made cars. These guys and gals making the cars not only are employees they are a big part of the customer base.
The shitheads Republicans spouted endlessly about how shitty the employees were to the company. I did not see anyone ask what contribution to the sales of the Big 3 these Republicans made (do they own a Union made car?) And if not, why? It would've been nice to also have someone ask them what the estimated sales would've been from these workers and their families should they have been terminated as a result of Union Busting. (Those guys likely would never buy again from a company that stabbed them in the back.)
over the past few months especially. I think this economic collapse his ideology has caused has really unhinged the guy. He's saying shit now that is amazingly stupid, already shown to have been wrong, wrong, wrong. Unlike Greenspan, I don't think he can bring himself to admit that conservatism is an ugly chimera, a vile lie that he's been central to foisting on America.
Corker has also helped Chattanooga obtain a new Volkswagen plant to be built there.
If it were a bailout for the hairpiece industry Will would be all for it.
The company that made Will's hairpiece should be allowed to go under though.
Did Krugman refer to Corker as "the senator from Nissan"?
If a Democrat were throwing the American auto industry under the bus for a Japanese car company the reichwingers would be screaming this was proof the Democrats hated America and wanted the Japanese to win!
IOKIYAR.
"Did Krugman refer to Corker as "the senator from Nissan"?" Yup! How appropriate.
Carl Levin the senator from GM???
Three GM plants in Oshawa, one each in Windsor, Ingersoll and Saint Catharine's.
Five Ford plants in Windsor, one each in Oakville and Talbotville.
Chrysler has one plant in each of the following: Windsor (birthplace of the minivan), Brampton and Toronto.
So I guess that kinda makes Carl the Senator from Ontario, too.
like alot of plants, doesn't it? Kind of shoots the "buy US made Big 3" theory full of holes! We're already bailing them out, regardless what the taxpayer's say or do.
You are just listing the Big 3 plants. Where I live, almost every town has a parts plant, that are connected to the "foreign" manufacturers.
The Big 3 have been building cars in Canada for decades. Chrysler has been in Windsor since 1928. It isn't like you bailed anyone out- but, hey, you were doing a bang-up job in two World Wars before we arrived on the scene, no?
Chrysler has already shut down 4 or 5 plants in Windsor, and they had Mopar parts plants scattered throughout Canada- Montreal and Winnipeg, for example- that have been "idled".
And you can call Levin "the Senator from GM" but those of us in Michigan know that he represents the people who work in the industry, whether they work at big, union shops or non-union, mom-and-pop parts suppliers.
We have a lot of parts plants that supply non-North American-based makers, too.
The problem is, if Chrysler and GM- especially GM- go down, those parts plants lose half (if not more) of their business. All of a sudden they've got too much invested in not only labor, but in machinery and in square-footage, too. They've got their own loans to pay off. So even if Toyota remains open, the parts plants can't afford to keep the doors open long.
If Corker can be made fun of by calling him the Senator for XXXX, then what's the difference? None. As for the parts plants you are right. But, guess what, even they admit a bailout will not help them without massive restructuring. That means job losses. Doesn't matter who the senator is, or what party, you can't stop it from happening. Hell, GM admitted they couldn't even afford to make their payroll. Sales in the winter are not going to turn them around because there are few sales in the winter unfortunately. All the auto industry manufacturers are hurting, and the media and politicians framing a "made in USA" vs "imports" is nothing more than a line of bull. All of them are global with none of them being made 100% in any country now.
... and the media and politicians framing a "made in USA" vs "imports" is nothing more than a line of bull.
You're right. Because it's a matter of Labor vs. Management.
But where you're wrong is that it's North American Labor vs. Overseas Management. There's a reason that those Japanese and German corporations opened shop on this continent where they did, no?
Even a Nobel laureate like Krugman should be challenged, especially if he's as active as Krugman in working the professional "consultant" circuit. But he should be challenged by a similarly qualified peer.
Not by a facile, complacent guy like George Will: "You know I'm worth listening to, though I have no expertise in economics. Knowledge and education and understanding and decades of withstanding challenge by specialists with advanced degrees are irrelevant. Forget those pointy-headed nerds. I'm worth listening to because I sound ponderous and never smile. And because I have a weekly column in a news magazine."
"Oh, and also because I'm an ideological right-winger, and thus provide 'fairness and balance'."
that Krugman should be challenged.
No one should be given an intellectual free pass.
Healthy skepticism should reign.
"Even a Nobel laureate like Krugman should be challenged, especially if he's as active as Krugman in working the professional "consultant" circuit."
I'm sure he's being challenged by his peers everyday. Not to worry. It's just that we are not lucky enough to be able to listen in to these meaningful debates. Rather we get to see him paired with these TV idiots, for the sole purpose of making them look good by having a milk toast dialog with him.
Krugman cracks me up. He sits there and then talks and he looks all embarrassed (probably because he is so much smarter than the others) and kind of acts like a nerd and all the while telling the idiots that they are full of shit but at the same time acting all meek. You know, "go ahead and don't listen to me but I know what I am talking about and you don't really have a clue. I wish I could just come out and say it."
Whom should I believe, Will or Krugman...a 23%er or a man with a beautiful working mind..
perhaps my little conspiracy theory can add some fuel to the fire...
http://harbingerofdoomblog.blogspot.com/
Ah...those pseudo-comedy stylings of the pseudo-intellectual George Will. What a bloviating asshat. Well, I guess that's by definition...he is a conservative pundit, after all.
Calls him "impressive."
Why is this limp noodle the Senate Majority leader? Can't we do better than this appeaser?
Your problem is figuring out who is your friend.
One thing nobody has said is that the amount of money paid out by the government to the people who will be in soup lines will be much more that the $14 bill. they are talking about now.
Agreed, provided that a bail out could actually be guaranteed to PREVENT that. I live near a mining town that was in trouble at one point, and asked for a bail out. The mine employed about 100 people, and the government sunk a 100 million dollar "loan" into the mine. The mine took the money and went bankrupt anyway. Somebody said they should have just given a million dollars to each of those miners, and told them to go f-ck themselves with it. The money would have been better spent that way, I assure you. 100 miners turned millionaire suddenly loose in the local taverns? A hundred million dollars converted from beer to piss in six months. Talk about the ultimate in trickle-down economics.
Basically the same idea s Sarah Palin and her bridge to nowhere. A 300 million dollar bridge to connect 50 people to the mainland. Why not give each of them $300 000, tell them to buy a YACHT with it, and do something useful with the other $150 million.
They want the Big 3 to die. They would love to see these Northern states go under while foreign interest thrives in their states. It'll keep them elected. But they're not looking at the big picture. The Big 3 goes under the Little 10,000 do too. I was against this bailout until I did a little investigating. Now I realize that this will have an impact on more than just the Big 3 and the self interest of these two politicians is really pissing me off.
Here's a simple idea. Anyone with auto plants in their state including the Big 3 should not vote on this.
Mon, 12/15/2008 - 15:14 — gump says:
That is the deal exactly and I bet there are a lot more small businesses that will go under that you may have not even thought about. Look at your neighborhood and see all the little stores that cater to the people in that neighborhood and these are the businesses that will go under in the neighborhoods where these layed off people live. And then the people/businesses that supply the little neighborhood businesses will be hurt and have to lay off people and then their neighborhoods will be affected and on and on until it stops.
I guess that's the difference between right wing zombies and left. The right's zombies take everything from a Rush or Malkin at face value. Just like the $73.00 an hour wage bullshit.
If the Big three go so will the big electrical and electronics manufacturers such as Delphi, Visteon, Lear and others. This will also hurt Toyota, Honda and the others because they will also lose their supply chains.
When these middle class workers lose their jobs some will also lose their homes. The places they live in will also lose their tax base.
Heck, people need to watch Michael Moore's "Roger and Me" to look at the consequences of Detroit falling down a well.
...and I hope these nimwit repug senators from down south listen to him as well. The guy is a geneous, and he's not blowing smoke up their asses.
I remember seeing him the first time when bor was bullying him and bad mouthing him like he was a loon from another planet who wanted to rape all the white women and take the money and wealth from the rich in this country. bor should be horse whipped for that display of arrogant molesting of a guest on his program...especially one who knows a billion times more about the economy than his little "pinhead" knows.
Just as in the case of TWA, if GM goes bankrupt, their assets will be liquidated, probably with the likes of Toyota snatching up everything from plants to suppliers and contracts.
Oh, and the workers can also kiss their pensions and benefits good-bye, too.
When American grabbed TWA's assets the workers who had been with TWA for decades lost damn near everything they had invested in the pensions and their health benefits were gone, too.
I know because my wife lost 90% of her pension and was out of a job after 32 years as a loyal employee.
Dalton, any knowledge on this. The President of my old company once made a remark linking Carl Icahn and TWA, saying Carl Icahn butchered TWA, any truth too that? http://en.wikipedia.org/wiki/Carl_Icahn
NY Times: European Crass Warfare
Guardian UK: We all go together when we go
Why would you want to have a sullen grumpy old fart on your show that does nothing but take cheap potshots at anyone trying to make a difference?
"The lead to the opposition to the bailout was lead by the, ah Senator Corker the Senator from Nissan..."
Well put. Don't leave out the Senators from BMW, Mercedes-Benz, Toyota, or Hyundai, either. There are no coincidences.
But, if the US auto industry is allowed to go under, the service industry and every other industry will be directly affected. When millions of people lose their source of income that will greatly affect the whole of the local and state economies where the auto industry and its parts suppliers are located. People may be only thinking about auto workers but it will be everyone that will feel the effects.
Throwing tax dollars at a company that is almost bankrupt will change nothing. And framing the argument Pro USA, vs Pro Import is as misleading as the media blaming unions, or non unions. For once it would be nice to see an honest intelligent media that actually informs. All of these companies are globally entrenched. Bailing out GM in say, Canada, would do nothing to keep the company afloat if their other subsidiaries are also in need of cash. Nothing proves socialism has a place in the world, than the obvious lack of accountability by these big industries that have so many lives in their hands. What's the answer to this problem? I don't know. I do know, that if my boss has no work, neither do I. He certainly isn't going to pay me to do nothing. Maybe they have to take the tough love now. Loss of jobs? Yep, but after restructuring, maybe the jobs will come back when the world's economy improves.
And at what cost?
Or will they ever come back at all?
When Nobel Laureate Paul Krugman is speaking, George Will should have the good sense to back up and shut his pie hole. That he doesn't speaks volumes about the half-bright pundit he really is - and has always been. I would further submit that those who allow (and indeed pay handsomely for) Will and idiots like him to continue the ventilation of their mindless puerilities at this late day and hour just shows whose side they're on. Hint: It ain't ours...
Ah...what...um?
In our global economy, are the operating procedures identical, if not, in how many ways do they differ? I will not claim that I know the cure for the (Big 3) unless I had all the facts. Hasty and or Flared discussions tend to offer and harbor hidden bias coming from the heart instead of the mind. It's a natural occurrence in my opinion, that nobody likes to be wrong. So many answers are given, using unequal relativity. My bias is based on my up bringing, coupled with my individual contemplation. In this case, I wish I knew more about trade policies. The taller they are... Thank you for all the answers and opinions, I appreciate the input and your time.
This is more proof that the GOP is full of fools, crooks, and liars. I watched Corker and his union busting questioning week before last. It was obvious that he is out for that only. I watch these thugs deal out tillions of dollars to unknown thieves off Wall Street, a new Ponzi Scheme came to light this week and they are not willing to lend a little hand to the industry that built the jeeps and tanks for WWII and protect 3 million jobs. The GOP is disgusting.
....I'm all confused......if neccessary, I got no issue with bridge loans to keep the industrial base together in the short term.....however, who is going to buy the new & improved products? Where are the jobs that produce middle class wages the allow the credit to create the marketplece?....betcha-by-golly-wow.....I'm sure now we'll need the NAU and the Amero to save us!
.....fergot that their speel check thing on the last post,sou sorryy..I did go to public school...
G.W. dude !?! You're arguing economics with a guy who won the Nobel Prize for it. I realize you think you know everything because you have a column and all, but DUDE, the Nobel Prize !!! For Economics !!! What are you thinking?
Darsan, you expressed exactly what I was thinking.
For years, I've glanced at Will's column and thought, "Hmm, this guy hasn't got a clue." What a maroon.
Krugman owned Will with his reply: "Do you want to make that decision by default?"
I just love it when Paul Krugman takes George Will to the woodshed for a good wacking. Has Will ever won any prize for his writing? No? Thought so.
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