A telling segment from Wolf Blitzer on Late Edition, although his motivations are a little murky for me. Inviting on House Minority Whip Eric Cantor to be the GOP balance to discuss the auto bailout, Blitzer actually gives Cantor a second chance to distance himself away from George Bush's bridge loan and then reiterates later in the segment that the Democrats are siding with Bush and the GOP are not. THAT's the fact that Wolfie wants all his viewers to be clear on...not the half dozen "Everybody knows" made-up facts that Cantor is left to spew without interruption.
Curious, isn't it, that Blitzer doesn't ask why Cantor suddenly has interest in accountability for a successful business model for the taxpayers' sakes? After all, when AIG and BearStearns got their money, no one asked their CEOs which mode of transportation they took, nor whether they would cut salaries, and their loss was due to unregulated credit swaps--basically a new turn on junk bonds.
And on that salary question...out of curiosity, while GM CEO Rick Wagoner agreed to a token $1 salary as part of his bailout, his salary rose in 2007 by 64% to $15.7 million, significantly higher than his Toyota counterpart. I'd hazard a guess that the rest of GM's officers are similarly compensated, but Cantor is more worried about the guys on the line making $30/hour.
Hey Wolf, I hate having to do your job for you, but let's do some basic math, shall we? Rick Wagoner's salary is FOURTEEN times more than his Toyota counterpart. $30 an hour equates to roughly $62,400 a year. That means that the CEO of GM earned the equivalent of more than 251 employees last year. Is it really so hard for you to bring up these facts, Wolf? C'mon, I dare you to ask Cantor where's his concern for the taxpayers when it comes to executive compensation.
If you do that, maybe I'll forgive you for forgetting that none of this concern even crossed through Cantor's mind when he happily handed out no-strings-attached money to financial industries. Maybe.
Transcripts below the fold
BLITZER: We're talking on this auto bailout, Congressman Cantor, about $13 billion for an initial bridge loan over the next three months or so, another $4 billion maybe coming in February. But it is a lot less than Bear Stearns or AIG and Fannie Mae and Freddie Mac. Listen to what the president said on Friday in announcing this short- term loan to Chrysler and GM.
(BEGIN VIDEO CLIP)
BUSH: Under normal ordinary economic circumstances, I would say this is the price that failed companies must pay. I would not favor intervening to prevent the automakers from going out of business. But these are not ordinary circumstances.
(END VIDEO CLIP)
BLITZER: You disagree with the president, I take it.
CANTOR: Wolf, I don't disagree. What I think, number one is...
BLITZER: So let me just be precise. Do you support that $13 billion bailout that he announced on Friday?
CANTOR: No, Wolf, I don't and here's why. Because we over the last several weeks been talking about alternatives as to how we can protect the tax payers and then stave off the threat of a loss of significant number of jobs in the auto industry.
And I believe the way we do that is that we get the concessions up front. Everyone knows that Detroit is not competitive. Everyone knows that the wage rates of the domestic manufacturers far exceed that of their foreign competitors. We know what we need to do in order to put these companies in a position so that they can compete.
Why is it impossible for us to get the concessions now and then have a situation where the government is there if you want to go in to some type of prepackaged bankruptcy, you want to provide some debtor and possession financing on the part of the taxpayers, have the companies pay for that government backstop is one thing.
CANTOR: But again, let's remember, the bailout of a failed model is not, I think, what we owe the taxpayers. We should really protect their money and not throw good money away.
BLITZER: This is an unusual situation, Congressman Barney Frank. I believe the Democratic leadership in the House and Senate, basically with President Bush on this issue of the auto bailout. The Republican leadership in the House and the Senate is opposed.
FRANK: I have to tell you, Eric Cantor, just gave I think an example of what people don't like about us. Mainly you said, do you disagree with the president? He said, no, whereupon he proceeded to denounce what the president is doing.
If what he said was agreement, I really want to be here when he disagrees because that will be really interesting. In fact, there was a good negotiation and both President Bush and Speaker Pelosi -- and again, we're in this terrible crisis as the president said. These are not normal times. People who lose jobs now are going to have a very hard time finding other jobs. There's a downward cascade in the economy.
So this is a very critical time and the president was absolutely right. Speaker Pelosi originally said let's do loans to the auto industry with conditions out of the tarp money. The president said, no, use the money that we voted to give them energy efficiency incentives. When the Republicans in the Senate balked that after it passed the House -- got a majority in the Senate, but not enough to overcome a Republican filibuster, President Bush -- and Nancy Pelosi originally agreed with the president and then he agreed with her.
The other thing I would say is this. It is striking to me that when Eric Cantor talks about concessions, it's only the workers. He mentioned concessions and mention the workers? Yes, the workers have already started to make concessions. They signed a contract that will be much less going forward. They have agreed to waive their jobs bank. I agree there should be concessions but unilaterally imposing them on working men and women and setting -- and by the way, what the Republican position was that the foreign auto companies should set the wage level for Americans.
They want to put that into law, that American workers in unions, bargaining, would instead be told by the law that they would be paid what foreign auto companies would pay without comparable concessions.
BLITZER: Let me let Congressman Cantor respond to that and then we'll take a quick break. Go ahead, Congressman.
CANTOR: We all know that in this country, there are three manufacturers that are not doing well and the rest that are doing well.
FRANK: No, they're not doing well.
CANTOR: But they are, Barney. There are ongoing concerns. They're not into Washington looking for a bailout. We all know, everyone knows in this country that Detroit is operating off a failed model.
And then what the problem is with the current package, and Barney, I did not ever say I agreed with this president on this particular package.
I don't, Barney, let me just clear that up. What is wrong with the package is there are no binding requirements here. These are floating targets. So, how in the world are we going to guarantee the taxpayers they are going to get their money back? That's where I'm coming from. We ought to be putting the taxpayers first. At the same time, trying to save the millions of jobs in the domestic auto industry.
FRANK: You underestimate the president and the majority in Congress in both houses which said yes, we are first, we are first to get repaid. If the appointee to oversee this says it's not working, we get repaid.
CANTOR: How are they going to get repaid if the companies are no longer viable?
FRANK: Because they have enough money to repay. Eric, having posed the question, why do you not want the answer? The fact is that they have enough money and everybody has agreed on that, including the secretary of the Treasury, that there would be enough money to repay this amount. They have got collateral. They've got property. They've got intellectual property rights. We are very heavily collateralized on this and we are senior in the debt. Secondly, there will be an appointee who will have a right to consist on insist on those concessions. But again, you talk only about concessions in the workers and I think the concessions have to be in both parties.