PBS NewsHour - 2008-10-28
Channel: malgent
Transcript
Language: English (original, YouTube automatic captions)
[0:10] Good evening. I'm Jim Lara. On the
[0:12] NewsHour tonight, the news of this
[0:13] Tuesday. Then the latest on the stock
[0:16] market's almost 900 point jump today.
[0:19] Three politics stories. What the
[0:21] presidential candidates said today with
[0:23] a week to go. What four newspaper
[0:25] editors said in their presidential
[0:27] endorsements. And what about the Alaska
[0:30] fallout from the Ted Stevens conviction?
[0:32] Plus, a debate about government help for
[0:35] the American auto industry.
[0:39] Major funding for the NewsHour with Jim
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[2:24] >> Stock markets around the world shot back
[2:26] up today. A rally on Wall Street took
[2:29] off late in the day. It came partly on
[2:31] expectations the Federal Reserve will
[2:34] cut interest rates tomorrow. The Dow
[2:36] Jones Industrial Average gained 889
[2:39] points to close at 9065, up 11%. The
[2:43] Nasdaq rose 143 points to close at 1649,
[2:48] a gain of nearly 10%. Elsewhere, the
[2:50] benchmark index in Hong Kong gained more
[2:53] than 14%. That helped set the tone on
[2:56] markets across Europe.
[3:01] The expectations have got a lot better
[3:03] than in the last few days because of the
[3:05] good numbers from Japan and Asia in
[3:07] general where through an intervention of
[3:09] the central bank the yen went a little
[3:11] bit lower and that hopefully will have a
[3:13] stabilizing effect on the economy. The
[3:15] rebound in stocks defied the latest
[3:17] economic news. The Conference Board, a
[3:20] private research group, reported US
[3:22] consumer confidence sank in September to
[3:25] its lowest mark in 41 years. And
[3:27] Whirlpool, the nation's largest home
[3:29] appliance maker, announced it's cutting
[3:32] 5,000 jobs worldwide by the end of next
[3:35] year. That's nearly 7% of its workforce.
[3:39] Talk of a federal rescue for General
[3:40] Motors and Chrysler intensified today.
[3:43] It was widely reported the Treasury is
[3:45] considering a package of up to 10
[3:47] billion. That funding would enable GM to
[3:51] buy Chrysler. At the White House,
[3:53] spokeswoman Dana Parino would not
[3:54] confirm any details. We'll have more on
[3:57] this story later in the program tonight.
[4:00] This was one week to go day in the
[4:01] presidential campaign and the candidates
[4:03] were out in force for a final push. A
[4:06] handful of critical states got most of
[4:08] the attention. The two campaigns started
[4:10] the day in Pennsylvania where polls
[4:12] showed Democrat Barack Obama leading
[4:14] Republican John McCain. Later, McCain
[4:17] moved on to North Carolina and Obama
[4:20] headed to Virginia. He's been making
[4:22] headway in both those states as well.
[4:25] McCain vowed today he will never give
[4:26] up. Obama called for his supporters not
[4:29] to relax. We'll have more on the
[4:31] campaign right after this news summary.
[4:33] Senators McCain and Obama called today
[4:36] for Ted Stevens to resign. The Alaska
[4:38] Republican was convicted yesterday of
[4:41] violating federal ethics laws. In a
[4:43] statement, McCain said Senator Stevens
[4:46] has broken his trust with the people and
[4:48] he should now step down. Alaska Governor
[4:51] Sarah Palin, the Republican vice
[4:53] presidential nominee, also urged Stevens
[4:56] to quit. We'll have more on this story
[4:58] later in the program tonight. There were
[5:00] growing signs today the US and
[5:02] Afghanistan may hold talks with some
[5:04] elements of the Taliban. The Wall Street
[5:07] Journal reported top White House and US
[5:09] military officials are weighing that
[5:11] option in a bid to stabilize
[5:13] Afghanistan. State Department spokesman
[5:16] Robert Wood said the idea is part of an
[5:18] ongoing review.
[5:20] >> You've got to try to bring together the
[5:22] various elements um in addition to
[5:24] military, political, economic, social
[5:26] and try to sort of mesh them into a
[5:29] cohesive strategy. And that's something
[5:31] that we want to try to you know to do
[5:33] better in Afghanistan. And um what's
[5:36] really important here is that the
[5:37] Afghans come together and reconcile
[5:41] >> separately. Political and tribal leaders
[5:43] from Afghanistan and Pakistan agreed
[5:46] today to open a dialogue with the
[5:47] Taliban. The governor of a key border
[5:50] region in Pakistan said the time is
[5:52] right. We also feel that certain uh
[5:56] things have happened in the meantime
[5:57] which have made uh uh uh uh our effort
[6:01] perhaps uh more relevant and more
[6:04] promising because we are hearing of uh
[6:06] other uh countries also talking about
[6:10] the need for uh dialogue for peace and
[6:12] reconciliation.
[6:13] >> The Taliban quickly rejected the idea. A
[6:16] spokesman argued any talk would be
[6:18] worthless as long as foreign forces
[6:20] remain in Afghanistan.
[6:23] The government of Iraq today condemned a
[6:25] US raid inside Syria. American officials
[6:28] said a leader of al-Qaeda in Iraq was
[6:31] killed in the helicopter assault on
[6:33] Sunday. An Iraqi spokesman said the
[6:36] constitution does not allow Iraq to be
[6:38] used as a staging ground to attack
[6:41] neighboring countries. The Syrians
[6:43] insisted eight civilians died in the
[6:45] raid. They ordered an American school
[6:47] and cultural center in Damascus to
[6:50] close. The Iraqi cabinet formally moved
[6:53] today to reopen talks on a long-term
[6:55] security deal with the US. The Iraqis
[6:57] are seeking new unspecified amendments.
[7:01] US officials said they have not seen
[7:03] those proposals, so it's too early to
[7:05] say what might happen. A UN mandate
[7:08] authorizing US troops in Iraq expires at
[7:11] the end of this year. Boeing and its
[7:14] largest union agreed to a tentative
[7:16] contract last night. It could end a
[7:18] strike by the machinist union that
[7:21] lasted nearly 2 months. The agreement
[7:23] includes a 15% raise over four years.
[7:26] It's subject to ratification by some
[7:29] 27,000 workers at plants around Seattle.
[7:32] Last night, they reacted cautiously. No,
[7:35] I tell everybody to read the fine print
[7:37] in the contract. I've voted against the
[7:39] union's recommendations in the past. So,
[7:41] uh, I'm really looking forward to having
[7:44] a good contract this time.
[7:45] >> That's about the future. You know, it's
[7:47] maybe not affected people like me are
[7:49] getting, you know, close to retirement,
[7:51] but our kids and and the new people
[7:53] coming on board here, you know, that's
[7:55] something that's concern concerns them.
[7:58] >> Industry experts have estimated the
[8:00] strike cost Boing about $100 million a
[8:03] day. The Christian Science Monitor
[8:06] announced today it will stop printing a
[8:08] daily edition and publish online
[8:10] instead. It's the first national US
[8:13] newspaper to make that move amid
[8:15] declining readership and ad revenues.
[8:18] The company will continue to print a
[8:20] weekend edition. And that's it for the
[8:22] news summary tonight. Now, Wall Street's
[8:24] big jump. The candidates begin their
[8:27] last week. Presidential endorsements,
[8:30] Stevens of Alaska, and help for the big
[8:32] three.
[8:41] The Dow Jones Industrial Average did
[8:43] close up a whopping 889 points today.
[8:47] The question is why? And we pose it to
[8:49] Jim Ellis, the assistant managing editor
[8:51] of Business Week magazine in New York.
[8:54] Jim Ellis, welcome.
[8:56] >> Thanks, Jim.
[8:57] >> What happened, Jim? That's That was
[8:59] unexpected. What happened?
[9:00] >> It was unexpected. I mean, there was a
[9:03] confluence of sort of good news. First
[9:05] of all, a lot of investors woke up after
[9:07] the weekend and figured out that there's
[9:09] real value in this market. I mean,
[9:11] Warren Buffett's been saying it for a
[9:12] couple of weeks, but people are looking
[9:14] at the value. The way we value markets
[9:16] is what times earnings are are stocks
[9:19] selling at right now. It's about less
[9:22] than half of what it was last October.
[9:24] So, people were saying that they could
[9:25] pick up stocks like Alcoa for less than
[9:28] five times earnings. the entire market
[9:30] is selling for less than 11 times
[9:32] earnings. It would have been closer to
[9:34] 25 or 30 just a year ago. So that was
[9:37] one reason. The second reason was that
[9:39] people are finally convinced that
[9:41] international uh central banks are
[9:44] really serious about putting a floor
[9:46] under the banking business. That's a
[9:48] good thing. It means that you know the
[9:49] financial system won't totally collapse.
[9:52] And then lastly, we're seeing some real
[9:54] hope now that interest rates for credit
[9:57] are actually starting to come down.
[9:59] Banks are more willing to lend to one
[10:01] another and um in the LIBORE rate and
[10:04] the rate that banks use to lend to one
[10:06] another in London is coming down. And
[10:08] this morning, both the Bank of England
[10:10] and the Swiss National Bank offered $20
[10:12] billion to their own banks to prop them
[10:15] up. Only 10 billion was requested. That
[10:17] means that banks are finally finding
[10:19] other ways, market ways to support
[10:21] themselves rather than having to go out
[10:23] and, you know, basically put their hand
[10:24] out for the Federal Treasury.
[10:26] >> And the Federal Reserve here in the
[10:27] United States is supposed to is expected
[10:29] to lower interest rates again tomorrow.
[10:31] Correct.
[10:32] >> Right. I mean, the big question now is
[10:34] not whether it's going to happen, but
[10:35] it's how much. In other words, will the
[10:37] Fed go down a a half point, which most
[10:40] people expect, though? Um, in the
[10:42] financial futures markets, there's a 40%
[10:44] bet now that the uh Fed might actually
[10:46] drop threequarters of a point. That's
[10:48] unprecedented. And it also is going to
[10:51] it might put us down below 1% interest,
[10:54] which is amazing.
[10:55] >> Yeah. Now, back to the uh the first
[10:57] reason you gave that people were buying.
[10:59] They were they they see bargains. Is
[11:01] that what they're doing?
[11:02] >> That's it. I mean, basically um value
[11:05] investors are people who believe you you
[11:07] know, you you only buy stocks when they
[11:09] are selling cheaply. As long as you
[11:11] think the stock will continue to stay in
[11:13] business, that the company stays in
[11:14] business, then you buy when others don't
[11:16] want to buy, that's what's made Warren
[11:18] Buffett rich. And a lot of people are
[11:20] saying these are too cheap to actually
[11:22] pass up.
[11:23] >> Should this be seen then as a one-day
[11:25] wonder, Jim, or and it'll go back down
[11:27] again tomorrow, or is it possible to
[11:29] even speculate?
[11:31] >> It's very difficult to talk about, you
[11:33] know, are we at a bottom? I mean, trying
[11:35] to pick a market bottom is like trying
[11:37] to catch a falling knife. It's not the
[11:40] kind of thing that most people want to
[11:41] willingly do. However, we've seen the
[11:44] market come down a lot in the past year.
[11:47] We've lost about uh here in the US, we
[11:50] probably lost about 12 trillion
[11:54] in market value just since last October.
[11:57] Globally, stocks have come down more
[11:59] than $24 trillion. There's you're a lot
[12:03] closer to a bottom today than you would
[12:04] have been a few weeks ago. The other
[12:07] thing is that market bottoms are
[12:08] normally marked by a lot of volatility
[12:11] as we're seeing now and a lot of people
[12:14] saying that the worst is you know that
[12:16] that the world is over. We saw that with
[12:18] the confidence numbers earlier today
[12:20] that said people have never been this
[12:22] worried about the economy. Those are
[12:24] usually marks that we are approaching a
[12:26] bottom
[12:27] >> and that usually when that that kind of
[12:29] figure comes out that usually affects
[12:31] the market negatively rather than
[12:33] positively does it not? Well, but in
[12:35] this case, a lot of people are thinking
[12:37] that there's a not a lot of reason to go
[12:40] down any further, and they're also
[12:42] becoming more and more convinced that uh
[12:44] a lot of money that's been sitting on
[12:46] the sidelines too frightened to invest
[12:48] is going to come flooding back in. A lot
[12:50] of people in the financial markets make
[12:52] money only when they're investing.
[12:55] They're not making money on just holding
[12:56] cash. And so, a lot of uh investment
[12:59] funds, a lot of hedge funds want to come
[13:01] back in. They're just waiting for what
[13:03] they consider to be the the a lower mark
[13:06] in the market.
[13:07] >> And this could have been that day,
[13:09] right? We don't know yet.
[13:10] >> Well, I think it might be
[13:12] >> it's dangerous to say that this is the
[13:14] day, but I have a feeling that if we
[13:16] could maintain this for another couple
[13:18] of weeks and let the volatility drop,
[13:20] the intraday trading volatility, then
[13:23] people will feel safe about coming back
[13:24] into the markets.
[13:25] >> Okay, Jim Ellis, thank you as always for
[13:27] your for your information and insight.
[13:40] And now with a week to go, what the
[13:42] candidates said today. Gwen Eiffel has
[13:44] our presidential campaign report.
[13:47] >> Hatless and shunning an umbrella in the
[13:49] steady rain. Barack Obama appealed to
[13:52] thousands of drench supporters to stick
[13:54] with him for the campaign's final week.
[13:57] >> This is an unbelievable crowd for this
[13:59] kind of weather.
[14:01] Thank you so much.
[14:09] >> And and I just want all of you to know
[14:11] that if we are if we see this kind of
[14:15] dedication on election day, there is no
[14:18] way that we're not going to bring change
[14:20] to America.
[14:21] >> Appearing in Chester, Pennsylvania as
[14:23] part of a final tour of battleground
[14:25] states, Obama recalled another inmperate
[14:29] campaign day. You know, we began this
[14:31] journey on a day that was actually a
[14:33] little worse than today. It was 7°
[14:35] outside.
[14:37] 22 months ago on the steps of the old
[14:40] state capital in Springfield, Illinois.
[14:42] And back then, we didn't have much money
[14:44] and we didn't have many endorsements.
[14:47] We weren't given much of a chance in the
[14:48] polls or by the pundits. We knew how
[14:52] steep this climb was going to be. But I
[14:55] also knew this. I knew that the size of
[14:58] our challenges had outgrown the
[15:00] smallalness of our politics. I believed
[15:03] the Democrats and Republicans and
[15:05] Americans of every political stripe,
[15:07] they were hungry. They were desperate
[15:09] for new ideas and new leadership and a
[15:12] new kind of politics.
[15:14] One that favors common sense over
[15:17] ideology. One that focuses on those
[15:20] values and ideals that we hold in common
[15:23] as Americans. And 21 months later,
[15:27] my faith in the American people has been
[15:29] vindicated.
[15:31] That's how we've come so far, so close,
[15:33] because of you. That's how we're going
[15:36] to change this country, because of you.
[15:39] And that's why in this last week, we
[15:41] cannot afford to slow down or to sit
[15:45] back or to let up. Whether it's rain or
[15:48] sleep or snow, we are going to go out
[15:52] and we are going to vote because it's
[15:54] too much at stake.
[15:56] >> As part of his closing argument, Obama
[15:58] is also devoting time to defending his
[16:00] tax plan, one that John McCain has
[16:03] criticized as wealth redistribution.
[16:06] >> If you make less than a4 million a year,
[16:08] how many make How many make less than a4
[16:10] million a year? Raise your hand.
[16:13] Actually,
[16:16] actually, it's just about everybody
[16:17] here, but you want to keep your hands in
[16:19] your pocket. It's too cold.
[16:23] >> If you make less than a4 million a year,
[16:26] and that includes, by the way, 98% of
[16:29] small businesses and 99.9% of plumbers,
[16:34] you will not see your taxes increase one
[16:37] single dime. Not your payroll tax, not
[16:40] your capital gains tax, not your income
[16:42] tax. No tax. Because the last thing you
[16:44] need is higher taxes when we're in a
[16:46] recession like this. And you won't get
[16:48] one under an Obama administration.
[16:54] Let me tell you, in the end, the choice
[16:56] isn't between tax cuts or no tax cuts.
[17:00] Both John McCain and I want to give tax
[17:01] cuts. The question is who we're going to
[17:03] give it to. Whether you believe we
[17:05] should just reward wealth or whether we
[17:08] should also reward work and the workers
[17:10] who create wealth. It's about whether
[17:12] you believe in an America where
[17:14] opportunity and success is open to all
[17:17] people and not just some people.
[17:19] Everybody who's willing to work for it.
[17:21] And that's the kind of America that I
[17:23] want to build when I'm president of the
[17:24] United States of America.
[17:27] Obama's running mate Joe Biden found
[17:30] sunnier weather in Okala, Florida, where
[17:32] he stressed the importance of
[17:34] strengthening the middle class.
[17:36] >> Barack Obama and I recognize that when
[17:38] the American middle class does well, the
[17:41] rich do just fine and the poor do
[17:43] better. Everyone is better off.
[17:47] And so we WANT TO REBUILD THE MIDDLE
[17:48] CLASS. AND HERE'S WHAT WE'LL DO. CUT
[17:51] TAXES FOR WORKING PEOPLE. CUT TAXES FOR
[17:54] SMALL BUSINESSES. ENCOURAGE, ENCOURAGE,
[17:57] AND LAY OUT A CLEAR PLAN TO END OUR
[18:00] DEPENDENCE ON FOREIGN OIL.
[18:05] INVEST IN REBUILDING AMERICA, its roads,
[18:08] its bridges, ITS WATER SYSTEMS, CREATING
[18:10] RIGHT HERE IN THE STATE OF FLORIDA OVER
[18:13] THAT PERIOD 121,000 NEW HIGHPAYING JOBS.
[18:19] Republicans John McCain and Sarah Palin
[18:22] focused their combined firepower on
[18:25] Hershey, Pennsylvania in the heart of a
[18:27] state McCain has pledged to win.
[18:29] >> It's wonderful to be back in
[18:31] Pennsylvania and it's wonderful to fool
[18:34] the pundits cuz we're going to win the
[18:36] state of Pennsylvania, my friends. We're
[18:38] going to win it on November 4th. You're
[18:41] going to get out the vote and we're
[18:42] going to win.
[18:44] >> Both McCain and Palin took aim at the
[18:46] Obama tax plan. Now, you have to really
[18:49] listen to our opponent's words through
[18:51] all of this. Listen to what he's saying
[18:52] because now he had been hiding behind
[18:56] his real agenda of redistributing your
[18:59] hard-earned money.
[19:04] He says that he's for a tax credit,
[19:06] which is when government takes more of
[19:08] your money and gives it away to someone
[19:11] else according to a politician's
[19:12] priorities. Now,
[19:16] that's as opposed to John McCain who is
[19:20] for a real tax cut, which means when
[19:22] government takes less of your earnings
[19:25] in the first place.
[19:28] You know, after months of campaign trail
[19:30] eloquence, we finally learned what
[19:32] Senator Obama's economic goal is to
[19:35] spread the wealth. In a radio interview,
[19:38] he revealed this week he said the same
[19:40] thing that one of the quote tragedies of
[19:43] the civil rights movement is that it
[19:45] didn't bring about redistributive
[19:48] change. Can you imagine?
[19:52] >> You see, Senator Obama believes in
[19:55] redistributing wealth, not in policies
[19:57] that grow our economy and create jobs.
[20:00] He said that even even though lower
[20:03] taxes on investment helped our economy,
[20:06] he favors higher taxes on investment for
[20:09] quote fairness. There's nothing fair
[20:13] about driving our economy into the
[20:15] ground. We all suffer when that happens.
[20:19] And that's the problem with Senator
[20:21] Obama's approach to our economy. He's
[20:23] more interested in controlling wealth
[20:26] than creating it.
[20:31] in redistributing money instead of
[20:34] spreading opportunity.
[20:36] I'm going to create wealth for all
[20:38] Americans by creating opportunity for
[20:40] all Americans.
[20:43] Senator Obama is running to be
[20:45] redistributionist and chief. I'm running
[20:47] to be commanderin-chief.
[20:51] Senator Obama is running to spread the
[20:53] wealth. I'm running to create wealth.
[20:59] Senator Obama is running to punish the
[21:01] successful. I'm running to make everyone
[21:04] successful.
[21:07] >> McCain also accused Obama of taking a
[21:09] victory lap before the election is
[21:12] decided, mocking the Democrat's plan to
[21:14] deliver a prime time national address
[21:16] tomorrow night. Now, my friends, let me
[21:18] give you the state of the race today.
[21:20] There's one week to go. We're a few
[21:22] points down. The pundits wrote us off as
[21:25] they have several times before. My
[21:28] opponent is out working out the details
[21:31] with Speaker Pelosi and Senator Reid on
[21:34] their plans
[21:36] to raise your taxes.
[21:39] Raise your taxes. Increase spending and
[21:42] concede defeat in Iraq. He's measuring
[21:44] the drapes and he's planned his first
[21:46] address to the nation before the
[21:49] election. By the way, no one will delay
[21:52] the World Series game with an
[21:53] infomercial when I'm president.
[22:10] I guess I'm old-fashioned about these
[22:12] things. I prefer to let the voters weigh
[22:15] in before presuming the outcome.
[22:20] The GOP ticket cancelled another
[22:22] afternoon appearance in Pennsylvania
[22:24] because of the inclement weather. McCain
[22:26] said he has come from behind before,
[22:29] even when popular opinion appear to turn
[22:31] against him. According to editor and
[22:33] publisher on News Industry magazine,
[22:35] Obama has been endorsed by 222
[22:38] newspapers, McCain by 93. At least 43 of
[22:42] those publications endorsed President
[22:44] Bush in 2004.
[22:46] And speaking of newspaper endorsements,
[22:49] here is Judy Woodruff.
[22:51] >> Joining me now are four editorial page
[22:53] editors to discuss their newspapers
[22:55] presidential endorsements. Backing John
[22:58] McCain are Robert KD from the San Diego
[23:01] Union Tribune and Bob Rener from the
[23:03] Richmond Times Dispatch. And backing
[23:06] Obama are JR Labby from the Fort Worth
[23:09] Star Telegram and Harold Jackson from
[23:12] the Philadelphia Inquirer. Thank you all
[23:14] four of you for being with us. Robert
[23:16] KD, I'm going to start with you, the San
[23:17] Diego Union Tribune. You endorsed John
[23:20] McCain. Why?
[23:22] >> Well, we based our endorsement, Judy,
[23:24] primarily on the economic policies that
[23:26] two the two candidates espouse. And
[23:28] frankly, we think that McCain's emphasis
[23:30] on tax cuts and on controlling spending
[23:34] are what are needed to get the economy
[23:36] moving again. And we are troubled by the
[23:38] tax increases that Barack Obama has
[23:40] advocated. He wants to increase the
[23:42] capital gains tax which is particularly
[23:44] hurtful to the to businesses and to job
[23:46] growth and and his general emphasis on
[23:49] uh taxing the wealthy to redistribute
[23:51] wealth. Uh we I think the emphasis ought
[23:54] to be on spurring the economy broadly to
[23:57] generate more wealth across the board.
[23:59] So it was really on the economic issues
[24:00] that we based our endorsement. Now, Jr.
[24:03] Labby, Fort Worth Star Telegram. My you
[24:06] were one of what 43 newspapers so far
[24:09] around the country that endorsed George
[24:11] W. Bush in 2004, but have gone to the
[24:14] Democrat this year. Why?
[24:17] >> It wasn't an easy decision, Judy, but we
[24:20] approached this recommendation by
[24:22] looking at five areas that the newspaper
[24:24] had historically weighed in on. issues
[24:27] like the economy, energy, tax policy,
[24:31] health care, immigration, entitlements,
[24:34] and by looking at both men's policy
[24:37] stands, we felt that Obama's closely
[24:40] more closely tracked where he we had
[24:42] been on those issues. Beyond that, we
[24:46] felt very strongly that McCain may have
[24:48] made a short-term tactical
[24:52] um stroke with his selection of Sarah
[24:55] Palin, but strategically long-term, we
[24:57] believe that that was a mistake. Um her
[25:00] sell by date came and went fairly
[25:03] quickly for us. While it energized the
[25:06] Republican base to get the voters out
[25:08] that they need, we really didn't think
[25:10] she had the readiness to be the number
[25:13] two in this nation should something
[25:15] happened to the commanderin-chief. And
[25:17] that was important to us, but it was not
[25:19] an easy decision in a county that is the
[25:23] reddest of the red in Texas and second
[25:25] only to Orange County in its
[25:27] Republicanism.
[25:29] >> Well, I want to come back to some of
[25:30] those points you made, but let me turn
[25:31] now to Bob Rener from the Richmond
[25:33] Virginia Times Dispatch. Uh, another
[25:36] endorsement for John McCain. Tell us
[25:38] why.
[25:40] >> Uh, as with the San Diego ego paper, uh,
[25:43] Judy, we were concerned about uh, some
[25:45] of Obama's economic policies. We
[25:48] mentioned that in the Great Depression,
[25:50] which followed a uh, a financial panic
[25:53] similar to the one we're seeing today.
[25:55] Uh, two of the big mistakes in economic
[25:57] policy were raising taxes and uh,
[26:00] restricting trade. And uh Obama has made
[26:03] clear that he's going to uh increase
[26:06] taxes on capital on on businesses. We
[26:09] don't think that's wise. He's been uh
[26:11] all over the place on trade. So that
[26:12] worries us. But another theme uh that we
[26:16] hit was that we believe that uh McCain
[26:18] is simply superior in terms of judgment
[26:20] experience on foreign policy and
[26:23] military affairs. Uh and we we still
[26:25] believe this is a dangerous world. We
[26:28] mentioned in the uh editorial that we're
[26:31] a little concerned that one of the
[26:32] dangers is that the the people of the
[26:34] United States are uh are not so
[26:37] convinced that this is a dangerous world
[26:39] anymore. So uh we believe that McCain is
[26:42] head and shoulder superior to Obama in
[26:44] terms of experience. Uh you know Obama
[26:47] has talked about uh Biden helping him on
[26:49] foreign affairs and from the comments
[26:50] we've seen from Joe Biden recently uh it
[26:54] doesn't seem like he's going to be much
[26:55] help in that department. All right.
[26:57] Well, let's uh and again, I want to come
[26:58] back to some of those points, but Harold
[27:00] uh Jackson, to you next, the
[27:01] Philadelphia Inquirer. Uh why Barack
[27:04] Obama?
[27:06] >> Well, we did a similar thing in looking
[27:08] at the uh candidates records in a series
[27:10] of editorials that we did in the two
[27:12] months prior to our endorsement. And uh
[27:15] on each one of those issues, uh Barack
[27:17] Obama was the superior person. He was
[27:20] most closely aligned to the positions
[27:22] that we had taken. Uh the bottom line
[27:24] for us is that uh we felt that there
[27:26] were two real uh criteria to look at
[27:29] here and uh the most important one being
[27:32] leadership but hope also was one that we
[27:35] looked at and we said in the end that uh
[27:37] hope when properly directed yields
[27:40] positive results and uh we feel that
[27:42] Barack Obama was the best person for
[27:44] America at this time when it's looking
[27:46] for hope.
[27:47] >> Bob Kendall I want to come back to you
[27:49] uh in San Diego. You said that the
[27:51] economy that the position their
[27:53] positions on the economy were the main
[27:55] factors in your decision. Was this
[27:57] mostly a pro-J McCain argument or an
[28:00] anti- Barack Obama argument in your
[28:03] >> Well, that that that's a good question,
[28:05] Judy, and I think it was pretty much
[28:06] even on both sides. I mean, we we had as
[28:09] many concerns about Barack Obama as we
[28:12] had favorable things to say about John
[28:14] McCain. So, uh, it's that's it's hard to
[28:18] get into everyone's heads and we we had
[28:20] a very spirited debate on our editorial
[28:21] board. It wasn't a unanimous, uh, point
[28:23] of view among our editorial writers,
[28:25] but, uh, in general, I think the the
[28:28] general expectation was that McCain also
[28:31] brought more leadership to the position
[28:32] and that while, uh, Barack Obama has
[28:35] demonstrated great, uh, uh, a great
[28:37] articulate way of uh, describing the
[28:39] issues, he's knowledgeable about the
[28:41] issues, but he really is untested. So,
[28:44] uh, that's a bit of a gamble. And with
[28:45] McCain, as we stressed in the editorial,
[28:47] he has been tested and we don't have
[28:49] have the same kinds of concerns that we
[28:51] would have with Barack Obama in terms of
[28:53] experience.
[28:54] >> Now, Bob KD, some of the others have
[28:56] mentioned the vice presidential choice.
[28:58] How much of a factor was that for you?
[29:00] >> Well, I think it was a negative factor
[29:02] quite frankly. Uh, not a huge one, not a
[29:05] decisive one, but uh, Sarah Palin's
[29:08] negative negative negative in in terms
[29:10] of John McCain's judgment. that is Sarah
[29:12] Palin. Uh, frankly, I I think most
[29:15] members of our editorial board would
[29:16] question whether she's ready to step
[29:18] into the Oval Office. And so, as I said,
[29:21] it wasn't a decisive factor, but it was
[29:22] a negative factor for John McCain in the
[29:25] minds of our editorial board.
[29:27] >> Jr. Labby, back to you in uh in Fort
[29:30] Worth. Let me ask you the same question.
[29:32] How much of this was pro- Barack Obama
[29:34] and how much of it was a was a concern
[29:37] or an argument against John McCain?
[29:40] I would say that the pro- Obama
[29:42] outweighed the negative McCain, but we
[29:45] certainly looked at issues that um that
[29:49] we are concerned about with Obama's
[29:51] policy. Texas is a very strong right to
[29:54] work state. Free trade is extremely
[29:56] important to us. We are right clonked
[29:58] down in the middle of the NAFTA
[30:00] superighway. So NAFTA is important. That
[30:03] is a concern of ours when it comes to
[30:05] looking at Obama's stated platforms
[30:07] about free trade. But we believed in
[30:10] looking at the overall policies and like
[30:13] Harold said, there is that issue of
[30:16] hope, that ability to energize
[30:20] ethnicities, gender, race, and youth
[30:23] that have never been engaged before in
[30:25] the political process. We don't believe
[30:28] that that can be diminished. And that
[30:30] young vote is going to be particularly
[30:32] important because they don't see black
[30:35] and white. They don't see the sort of
[30:37] socialism mantra that keeps being hyped
[30:40] by the Republicans as something to fear
[30:43] in Obama. They don't see it that way. So
[30:46] that young vote is going to make a
[30:48] tremendous difference in this election.
[30:50] Senator McCain is a war hero. He served
[30:54] his country noly. But from a North Texas
[30:57] perspective, he has been no friend to
[31:00] our local defense industry and some of
[31:02] the programs he's been against. And his
[31:05] work on the campaign finance bill sat
[31:08] uneasy with some of our people who
[31:11] believe that free speech is manifested
[31:14] in how one gives their money to support
[31:18] candidates. So there was reason for
[31:20] people in our area not to like McCain.
[31:23] Bob Rener, I want to get at try to get
[31:25] at this question of how much was this
[31:27] for McCain and and against Obama, but
[31:30] what about the factor that we just heard
[31:32] JR Lavy mention this whole notion of
[31:34] generational change and hope? Did that
[31:37] factor into your discussion?
[31:39] >> Well, we mentioned that in our
[31:41] editorial. I mean, and we praised Obama
[31:43] for his uh temperament and we we praised
[31:45] him for the historical nature of the
[31:47] campaign and how much excitement he's
[31:48] generated. Uh but our editorial was
[31:52] primarily a pro- McCain editorial. Uh we
[31:55] did criticize Obama on some policy
[31:57] points, some specific things that
[31:59] bothered us. Uh the fact that he was
[32:02] very slow, very reluctant to admit that
[32:04] the surge in Iraq worked. uh we're uh
[32:08] distressed by his support of the union
[32:10] check card uh bill and uh we were uh
[32:15] equally u concerned that he simply
[32:20] doesn't have a whole lot of experience
[32:21] in foreign affairs. So we have some
[32:24] concerns about Obama. We we didn't
[32:26] question his character. Uh but the the
[32:29] focus of the uh the editorial was on
[32:32] McCain's strengths both in policy
[32:34] particularly economic and foreign
[32:36] affairs uh but also his judgment. We I
[32:39] we think he's demonstrated judgment and
[32:42] frankly political courage from time to
[32:44] time not only with supporting the surge
[32:46] long before it was popular. Uh he's uh
[32:50] frequently gone against his own party
[32:52] when it's not always been in his best
[32:54] interest. Let me let me
[32:56] >> I was just going to say let me step in
[32:58] here because I I want to come back to
[33:00] all four of you on another question. But
[33:02] Harold Jackson, let me come to you on
[33:03] this question of how much for Obama. You
[33:06] you mentioned the the uh the two factors
[33:09] you mentioned were leadership and hope.
[33:12] How much of what you discussed was of
[33:15] were negatives where John McCain is
[33:17] concerned and how much disagreement was
[33:19] there on your editorial board? Well, we
[33:22] never discussed the uh internal workings
[33:24] of the editorial board. There was
[33:25] dissent. In fact, we did something very
[33:28] different, unheard of for our paper. Uh
[33:30] we actually ran in addition to running
[33:32] the uh endorsement editorial, we ran a
[33:35] short descent by uh that was written by
[33:37] the members of the board who desented.
[33:39] But our editorial, our main editorial
[33:41] was about uh Barack Obama. it it listed
[33:44] his positives on a number of issues
[33:47] about six or seven issues that we
[33:49] thought were important to Americans.
[33:51] Now, we did discuss John McCain and what
[33:53] we said about John McCain is that there
[33:54] were some troubling aspects about his
[33:56] candidacy and very clearly the Sarah
[33:59] Palin uh selection as vice presidential
[34:02] candidate was troubling to us. It
[34:04] smacked a pandering to uh certain
[34:06] elements of the electorate and uh you
[34:09] know it was troubling. It sounded it
[34:11] seemed to be something in which uh John
[34:13] McCain was again throwing a hail Mary
[34:15] trying for something and uh je possibly
[34:18] jeopardizing his campaign in the process
[34:20] and you have to wonder if he would be
[34:22] that type of president who would take
[34:23] that type of chance and perhaps
[34:25] jeopardize the nation.
[34:26] >> Let me just come back to all four of you
[34:28] very quickly and ask you what reaction
[34:30] you're getting. Bob KD to you uh first
[34:32] in San Diego. What sort of reaction have
[34:34] you gotten from your readers?
[34:36] >> Well, the readers are on both sides of
[34:38] the issue. Uh San Diego is a uh a red
[34:41] county. Um but uh I I would say most of
[34:46] the letters that we've received have
[34:47] argued for Obama because I think readers
[34:50] tend to write when they when they object
[34:52] to an editorial. You don't get as many
[34:54] letters saying uh we agreed with the
[34:55] editorial. So we've certainly aired a
[34:57] number of letters from people who say,
[35:00] "Well, you also endorsed George W. Bush,
[35:02] so your endorsement doesn't mean much to
[35:04] us four years later and we're going with
[35:06] Obama." So it's it's actually It it
[35:08] started a good debate.
[35:10] >> I'm going to quickly turn to J.R. Labby.
[35:12] I want to get to all three of you in a
[35:13] minute.
[35:15] >> Yesterday, Judy,
[35:16] >> go ahead.
[35:16] >> It was quiet too quiet yesterday. I was
[35:20] surprised at the lack of immediate
[35:22] reaction to the endorsement. Since then,
[35:24] we have like Bob has had in San Diego.
[35:26] You hear from the people who don't agree
[35:28] with your recommendation. And as of noon
[35:31] today, we had about 170 readers who had
[35:34] cancelled their subscriptions, including
[35:37] the Tarant County Republican Party
[35:39] headquarters, which cancelled its paper.
[35:42] They'll be back, but they are sending us
[35:44] a message.
[35:45] >> And Bob, very quickly, Bob Rener and
[35:48] Richmond reaction from the readers.
[35:50] >> Uh, we didn't have a quiet day. We heard
[35:52] from a lot of our readers. A lot were
[35:54] were thrilled that we uh endorsed
[35:56] McCain, and there were obviously quite a
[35:57] few upset that we didn't. Uh we we
[36:00] endorsed Bush the last two elections. I
[36:03] think some of our readers on the
[36:04] Republican side were worried that we
[36:06] might endorse Obama because we'd written
[36:08] some editorials that praised him. So
[36:10] they were uh greatly relieved that we
[36:12] came down on McCain's side.
[36:14] >> And finally, Harold Jackson in
[36:16] Philadelphia. What did you hear?
[36:17] >> Well, yes, we heard from readers. We got
[36:18] the most comment from our decision to
[36:20] run the dissending opinion underneath
[36:22] our endorsement editorial. Uh our
[36:25] liberal Democratic readers just could
[36:27] not see why we would do that. It was
[36:29] unprecedented. We did it. Uh and I think
[36:31] that the result is probably something
[36:33] positive and that it uh started a good
[36:35] discussion about that process among
[36:37] editorial boards.
[36:38] >> Well, this has been a great discussion
[36:40] and we thank you all for for joining us.
[36:42] Harold Jackson uh in Philadelphia, Bob
[36:44] Rener in Richmond, uh J.R. Labby in Fort
[36:47] Worth, and Bob KD in San Diego. Thank
[36:50] you all.
[36:59] And another politics story. What next
[37:01] for Ted Stevens. Ray Suarez reports. A
[37:05] day after a Washington jury found the
[37:07] Alaska senator guilty of seven felony
[37:09] corruption charges. We take a closer
[37:11] look at the political implications of
[37:13] the verdict and gauge reaction in
[37:15] Stevens home state with Michael Kerry,
[37:18] host of a weekly political program for
[37:20] Alaska Public Television and columnist
[37:22] for the Anchorage Daily News. He joins
[37:24] us now from Anchorage. Michael Carrie,
[37:27] was the trial and its outcome yesterday
[37:29] closely followed in the state?
[37:32] >> Intensely. Uh, it was the lead story
[37:34] virtually every day in the Anchorage
[37:36] Daily News, Alaska's largest newspaper,
[37:39] and also on the television stations
[37:41] here, especially Channel 2, the local
[37:43] NBC affiliate.
[37:44] >> Now, before the jury announced its
[37:46] verdict, this already was one of the
[37:48] closest Senate races in the country. Is
[37:50] the verdict already having an impact?
[37:54] >> We think so, but we really don't know.
[37:56] It's going to take a few days. There's
[37:58] been a great deal of response uh in
[38:00] favor and support of Senator Stevens,
[38:02] particularly on talk radio where people
[38:03] have called in to say they've known him
[38:05] for years. They trust him. They think he
[38:07] got a raw deal. Some of them even say we
[38:09] don't care how they do it in Washington
[38:11] DC. We love Ted. But I think as time
[38:14] passes and uh and people begin to look
[38:17] at what the alternatives are for Ted
[38:19] Stevens, they may make a different
[38:21] decision when they finally come to vote.
[38:22] >> Didn't Senator Stevens from the outset
[38:25] push for a fast
[38:27] verdict on this push for the jury trial
[38:30] to go ahead right away so that there'd
[38:32] be a judgment before the election.
[38:35] >> Yes, that was his idea. Uh he pushed the
[38:37] prosecutors and told them he wanted a
[38:39] trial soon and under the law he had that
[38:41] right and proceeded with it. Um I don't
[38:44] think quite obviously he didn't get the
[38:46] outcome he expected or wanted.
[38:48] >> What have the state Republicans who are
[38:50] very prominent and strong in Alaska had
[38:53] to say about this verdict?
[38:56] Well, the official spokesman of the
[38:58] Republican party came out and said, "You
[39:00] know, not only is this a dark day for
[39:01] Alaska, but we should uh we have to
[39:04] worry about Mark Beg, the Democrat,
[39:05] becoming a US senator, what it might
[39:07] mean if the Democrats have 60 senators
[39:10] in a filibuster proof uh Senate. Um, but
[39:14] the Republican party now is deeply
[39:16] divided over the response of John McCain
[39:18] and Sarah Palin." Now, national
[39:20] Republicans uh including Mitch
[39:22] McConnell, the minority leader who's in
[39:24] a tough race himself in Kentucky, uh
[39:26] Senator John Enson, who's running the
[39:28] Republican senatorial effort, have both
[39:31] uh appeared to cut Ted Stevens loose?
[39:34] Does that kind of thing make an
[39:36] impression inside Alaska? Or is it kind
[39:38] of separated from what goes down down in
[39:40] the lower 48?
[39:43] At first, people will perceive it as uh
[39:45] people like McConnell saying, "Senator
[39:47] Stevens, there's the plank. Jump." But
[39:50] after a while, I I think as things uh
[39:53] set in with people, they'll realize that
[39:55] this is a matter of national concern
[39:57] that people are talking about it all
[39:58] over the United States. And I suspect in
[40:01] the long run, our opinion will in many
[40:03] ways replicate national opinion. Not for
[40:06] those people who are deeply tied to
[40:08] Senator Stevens, have personal
[40:09] relationships with him, but with the the
[40:12] larger population.
[40:13] >> Now, one prominent Alaska Republican is
[40:16] also the Republicans candidate for vice
[40:18] president. What has Governor Palin had
[40:20] to say about the Stevens verdict. Has
[40:22] she been really explicit about her
[40:25] feelings on this? Well, yesterday I saw
[40:28] in a tar tarmac shot where she came out
[40:31] and said the proverbial this is a sad
[40:33] day for Alaska and then sort of left it
[40:34] there. Today she's joined with John
[40:37] McCain and saying that uh Senator
[40:39] Stevens needs to step down and the
[40:42] Republican party needs to be protected.
[40:45] It's important for the viewers to know
[40:46] that Ted Stevens and John McCain have
[40:48] never been friends and uh this is in
[40:50] some measure um their continuation of
[40:53] their battle over ear marks and a
[40:54] personal rival rivalry that's gone on
[40:56] for years if not decades
[40:58] >> previous to Senator Stevens electoral
[41:01] problems. Was he close with the Alaska
[41:03] governor?
[41:05] >> Uh Senator Stevens, no. Um they're a
[41:08] different generation come from different
[41:09] backgrounds. Senator Stevens was in the
[41:12] Alaska legislature when Governor Palin
[41:14] was born. Whole different eras,
[41:16] different backgrounds. Um during the
[41:18] campaign, Senator Stevens appeared at
[41:21] one or two events with uh Governor
[41:22] Palin. And this was a huge surprise to
[41:26] voters here because it suggested that
[41:29] Senator Stevens really needed Governor
[41:31] Palin's help in this election and he's
[41:33] never asked anybody for help in that
[41:34] way. Presumably, it's too late for the
[41:37] ballots to be changed for the Alaska
[41:40] Republicans to nominate someone else for
[41:42] that seat. What are under Alaska
[41:45] electoral law, some of the possibilities
[41:47] that could play out now?
[41:50] >> Well, uh, Senator Steven, if if if Mark
[41:52] Beg wins this election, and he's run a
[41:55] very good campaign. He's a very skilled
[41:57] young man. I say that he's 44 years old,
[42:00] I believe, but 40 years younger than Ted
[42:03] Stevens. If he wins uh on Tuesday, he
[42:05] will be the US senator and that'll be
[42:07] the end of it. If if Senator Stevens
[42:09] prevails, he will go back to Washington
[42:12] and face all the process that in that
[42:15] would be involved there of a senator
[42:16] who's been indicted and perhaps some
[42:18] ethics quest, independent ethics
[42:20] questions as well. Then there'd be the
[42:22] question of would he step down? What
[42:24] would he do if he was sent to prison?
[42:26] These are all uh hypotheticals that we
[42:29] can only remotely um imagine. I think
[42:32] the important thing to know here is
[42:33] Senator Stevens character. He is not a
[42:36] man who is going to back down. He is
[42:38] never going to give up. He his goal in
[42:41] life it seems to has been to be a United
[42:44] States senator and he's going to be a
[42:46] United States senator as long as he can.
[42:49] >> Is he back in Alaska yet to campaign?
[42:52] >> No, he's coming back uh tomorrow is my
[42:55] understanding. There are various press
[42:57] requests in to meet him on Thursday
[42:59] night. he will be uh participate in a
[43:02] debate on public broadcasting here in
[43:04] Anchorage. Uh I'll be one of the uh the
[43:06] journalists questioning him and um
[43:09] that's uh looming as an important event
[43:11] here in the next few days.
[43:13] >> What has he had to say to the people of
[43:14] his state so far?
[43:17] uh the same thing that's been printed
[43:18] all over the United States that he
[43:20] thinks that this was really a justice
[43:23] department that was in or lawyers and
[43:26] the justice department who were out of
[43:28] control that the the uh the court case
[43:30] was handled very badly that he was
[43:32] mistreated. He's an innocent man. He's
[43:34] going to prove it and he will prove it
[43:36] on appeal or whatever method it takes to
[43:39] vindicate himself. Were there a lot of
[43:41] people in Alaska, as far as you could
[43:42] tell from your reporting, who were
[43:44] waiting on the sidelines to see what
[43:46] happened in order to decide where they
[43:48] were on this race?
[43:50] >> This is something I I really have never
[43:52] quite understood how many people would
[43:54] really sit back and say, you know, I
[43:55] want to find out if he's innocent.
[43:57] There's a variety of bad behaviors that
[43:59] went on with Senator Stevens and other
[44:01] people involved in the corruption trial.
[44:02] Would people really sit back and say, I
[44:04] need to know he was innocent. I need to
[44:06] know he was guilty. because during the
[44:08] campaign both Senator Stevens and his
[44:10] challenger, Mayor Begage of Anchorage
[44:12] were giving people lots of reasons to
[44:14] vote for them, vote for them or to vote
[44:16] against them. So, I think this has been
[44:18] hyped. Um, I can't prove that and I'm no
[44:21] pollster that I know of has really
[44:22] talked about it.
[44:23] >> Michael Kerry in Anchorage, thanks for
[44:25] joining us.
[44:27] >> Thank you.
[44:35] And finally tonight, throwing out a
[44:37] lifeline to American automakers. Jeffrey
[44:40] Brown has that story.
[44:42] As the federal government's financial
[44:44] rescue plan develops and expands, one of
[44:47] the nation's most important industries
[44:48] is now asking, "What about us?"
[44:51] Detroit's big three, hemorrhaging money
[44:53] for years, have seen conditions spiral
[44:56] downward quickly in recent weeks. And
[44:58] now General Motors is in merger talks
[45:00] with Chrysler, but says it needs federal
[45:02] help to complete a deal. We look at the
[45:05] situation with David Cole, chairman of
[45:06] the Center for Automotive Research, a
[45:09] notfor-profit institute in Ann Arbor,
[45:11] Michigan that studies the industry, and
[45:13] Peter Mauricei, an economist at the
[45:15] University of Maryland School of
[45:17] Business, who writes frequently on the
[45:19] state of the auto industry. Well, David
[45:21] Cole, GM is the immediate focus right
[45:23] now. How serious are its problems and
[45:26] how did they grow so quickly?
[45:31] I think the it's really sort of a
[45:33] doublebarreled shotgun blast to the gut
[45:36] uh that they've received as well as
[45:37] others in the industry. First of all was
[45:39] the rapid run up in energy prices and
[45:41] the huge transition that we saw in the
[45:43] market uh in the spring and early
[45:45] summer. And of course uh since the
[45:47] meltdown on Wall Street uh the credit
[45:49] crisis has really impacted because it
[45:52] impacts the consumer buying cars,
[45:53] impacts the dealer with their floor
[45:55] planning and it obviously impacts
[45:57] manufacturers and suppliers. And with
[45:59] the revenue shortfall that we've had in
[46:01] the last couple of months, this has been
[46:02] devastating on cash for the entire
[46:04] industry. Uh GM, Ford and even the
[46:07] internationals are really under an
[46:09] enormous amount of pressure right now.
[46:10] Now, staying with you, a lot of the
[46:12] problems of the industry, and we've
[46:14] talked with you on this program over the
[46:15] years, a lot of these programs have been
[46:17] there a long time. Uh, management
[46:20] problems, uh, not dealing with labor
[46:23] costs, uh, not building cars that
[46:25] Americans buyers want to buy. Are those
[46:29] to what degree are those problems still
[46:31] with us?
[46:33] >> Well, in many ways, the industry has
[46:35] changed remarkably. If you look at GM
[46:37] today, they're globally integrated. uh
[46:39] their products are much much better
[46:41] compared to what they were a few years
[46:43] ago and that's true of many in the
[46:45] industry today. The product execution is
[46:48] is really outstanding. Uh the market
[46:51] however can shift dramatically more
[46:53] quickly than any manufacturer can
[46:55] change. And of course one of the really
[46:58] underlying factors in this has been
[47:00] we've had a very narrow product range
[47:02] that was quite profitable and that was
[47:04] the trucks and SUVs. And one of the key
[47:06] factors in in that was the unintended
[47:09] consequences of uh the corporate average
[47:11] fuel economy standards back in the uh in
[47:13] the 70s. And when we hit 1980, we had a
[47:16] collapse in petroleum prices. Customers
[47:18] walked in and they said a car now that
[47:20] had to achieve 27 12 m per gallon really
[47:23] didn't fit them. And that truck or SUV
[47:26] really did. And so we had this explosion
[47:29] for 20 plus years in the truck business,
[47:31] but the car business was uh was really
[47:33] terrible. The other thing is that the
[47:35] legacy costs that the domestics had
[47:38] because they'd been around a long time.
[47:40] They had very attractive contracts for
[47:42] labor to find benefit on health care.
[47:44] For example, at one point GM was
[47:46] covering over a million people on health
[47:48] care costs. Uh which led to for the
[47:51] whole industry a couple of thousand cost
[47:53] disadvantage visav the new
[47:55] internationals the uh particularly the
[47:58] Japanese and Koreans that came here to
[47:59] build. U so in a sense there were a lot
[48:02] of mistakes all over the place the
[48:04] government uh certainly management uh
[48:06] labor but uh this is an enormously
[48:10] productive industry and it was an
[48:11] industry that could afford rich labor
[48:13] contracts until it became much more
[48:16] globalized.
[48:16] >> All right, let me bring Peter Mauricioi.
[48:18] I know we were having some technical
[48:19] difficulty. I hope you were able to hear
[48:21] a lot of that.
[48:22] >> I did.
[48:22] >> Okay, good. The question now of course
[48:25] is the is the industry coming to the
[48:27] government and suggesting that it needs
[48:30] uh it needs some cash fast. Now I don't
[48:33] know how you see the particulars of the
[48:35] situation now. What do you think about
[48:37] this request for cash? Is it should the
[48:39] government help?
[48:40] >> Oh, I don't think the government should
[48:41] give them any cash. Uh the the the
[48:44] Detroit 3 were in a lot of trouble
[48:46] before gas prices recently rose. They
[48:48] were in a lot of trouble before the
[48:49] credit crisis. Uh GM has been bleeding
[48:53] cash for several many quarters now as is
[48:55] Ford and Chrysler. Uh Dameler got rid of
[48:58] Chrysler because it couldn't make any
[48:59] money with the company and saw no
[49:01] prospects of doing so. If we were to
[49:03] give General Motors some money now to
[49:05] acquire Chrysler, this would just put
[49:07] off for 18 months, two years, the
[49:09] inevitable reckoning. One way or
[49:11] another, one or all three of these
[49:13] companies is going through Chapter 11.
[49:15] One way or another, the pensions are
[49:16] going to fall back on the pension
[49:18] guarantee uh corporation. the federal
[49:20] government runs and that's going to be a
[49:21] crisis for the federal government uh
[49:23] because it it doesn't really have
[49:25] adequate assets for all the pensions
[49:26] throughout the country that it's it's
[49:28] guaranteeing because that wasn't set up
[49:30] properly. Uh but the bottom line is
[49:33] we've heard over and over again from
[49:35] General Motors remorse and repentance
[49:38] and how they were going to finally
[49:39] upgrade themselves and be truly
[49:41] competitive with Toyota and the other
[49:44] transplant automakers that very
[49:45] successfully make highquality cars here
[49:48] in North America for some 20 or more
[49:51] years and they just haven't been able to
[49:53] deliver on that. The bottom line is that
[49:55] General Motors just doesn't make cars
[49:57] people want to buy and neither does
[49:59] Chrysler. Chrysler has a couple of good
[50:01] brands that would be very attractive to
[50:03] a Japanese manufacturer after it went
[50:06] through Chapter 11 and was rid of the
[50:07] UAW contract because it would nicely
[50:09] complement their lines and it one of
[50:12] those Japanese manufacturers could fix
[50:14] what is wrong with with Chrysler in
[50:16] those lines.
[50:17] >> All right, let me ask David Let me ask
[50:18] David Cole what's the argument for the
[50:20] government stepping in to help.
[50:22] >> Well, first of all, I don't think Peter
[50:24] is very upto-date on what's going on in
[50:26] the industry. He does not have deep
[50:27] knowledge on the industry. And if you
[50:29] understand this industry and what it's
[50:30] gone through and where it is today, it's
[50:32] dramatically improved from where it has
[50:35] been in the past. You look at the
[50:36] products, three of the last four cars of
[50:38] the year at the International Auto Show
[50:40] were GM products. Uh it's producing very
[50:43] well, but it has a very difficult time.
[50:45] Now, the bottom line here is that the
[50:47] cost of a failure and the cleanup of
[50:49] that mess is a whole lot more expensive
[50:52] than the prevention of that uh problem.
[50:55] >> You mean the You mean the cost of the
[50:56] broader economy? Is that right?
[50:58] >> Oh, the cost of the broader economy. We
[51:01] you look at a cascading impact in terms
[51:03] of tens of thousands over a million
[51:06] jobs. You look and and I am basically a
[51:08] free market guy and in principle I would
[51:11] agree with Peter. But when you look at
[51:13] the impact of this industry, the
[51:14] multiplier on jobs in this business
[51:16] which are higher than any other
[51:18] industrial sector, we're talking about a
[51:21] shock that this econom economy really
[51:23] cannot afford to take versus the cost of
[51:26] uh prevention which is nominal. Uh and I
[51:29] think what we have seen now is that the
[51:31] government does understand that they are
[51:34] moving forward I think with we don't
[51:36] know exactly how this is going to be
[51:38] shaped yet. whether it's the DOE money
[51:40] related to the uh fuel economy standards
[51:43] or the uh bailout of Wall Street. We're
[51:46] not sure how that's going to occur, but
[51:48] I think the government basically
[51:49] recognizes that if they let this thing
[51:51] get away, we have a real problem. And
[51:53] the future close by is really quite
[51:56] bright. If you look at uh capacity
[51:59] reduction uh the cost reduction
[52:00] particularly next year with a new labor
[52:02] contract and then third the penup demand
[52:05] this is a a very difficult period but
[52:08] the near-term future is really very
[52:10] bright and if you look at the
[52:12] functionality the capability of this
[52:14] industry it's dramatically improved from
[52:17] where it is. I'm not sure people outside
[52:19] understand that. Well, let me let let me
[52:20] let Peter Maurici respond particularly
[52:22] on the issue of if you let these
[52:25] companies fail, then the cascading
[52:28] impact on the broader economy are just
[52:30] too hard to contemplate. So, it's worth
[52:32] it's worth stepping in now. What do you
[52:34] think?
[52:34] >> Well, it's worth stepping in now if you
[52:37] accept that argument if giving them the
[52:39] money would keep the catastrophe from
[52:41] happening. But in my mind, putting
[52:44] Chrysler and General Motors together and
[52:46] then subsidizing them, the only way
[52:48] you're going to keep the catastrophe
[52:49] from happening two and three and four
[52:51] years from now is if you're prepared to
[52:53] write them a check every year from now
[52:55] and forever. Because General Motors,
[52:58] even with its new labor contract, is
[53:00] still going to have higher labor costs
[53:01] than, for example, Honda will have at
[53:03] its new Indiana plant. Uh, it's still
[53:05] going to have a more bureaucratic
[53:07] management structure, more difficulty
[53:09] and higher costs in developing new
[53:11] products. I mean, General Motors
[53:13] certainly has some winners. It just
[53:14] never has enough of them. Its products
[53:16] have an old shelf life because it costs
[53:19] too much to develop cars inside of
[53:20] General Motors. And that's quite a part
[53:22] from its UAW contract problems. My
[53:24] feeling is this is going to happen one
[53:26] way or another. So, we shouldn't throw
[53:27] good money after bad.
[53:29] >> I'm very sorry, but we're at the end of
[53:30] the program.
[53:32] >> You just don't know this industry at
[53:33] all. Okay, we'll have to leave it there.
[53:35] Peter Marissi and David Cole, thanks
[53:36] very much.
[53:46] And again, the major developments of
[53:48] this day. Stock markets around the world
[53:50] shot back up. The Dow Jones Industrial
[53:52] Average gained nearly 900 points. And
[53:54] with one week to go until election day,
[53:56] Republican John McCain vowed not to give
[53:59] up despite trailing in the polls.
[54:01] Democrat Barack Obama urged his
[54:02] supporters not to relax. An editor's
[54:05] note before we go. Last night, one of
[54:07] our guests mistakenly said that former
[54:09] Minnesota Senator David Durnberger had
[54:12] been convicted on felony charges of
[54:14] failing to file Senate financial
[54:16] disclosure forms. Durburgger pleaded
[54:18] guilty in 1995 to misdemeanor charges
[54:21] and paid a $1,000 fine. The last senator
[54:25] to be convicted of a felony was New
[54:27] Jerseys Harrison Williams in 1981. He
[54:30] served 21 months in prison for bribery
[54:32] and conspiracy. Tonight's edition of
[54:34] Front Line explores the challenges about
[54:37] Afghanistan facing the next US
[54:39] president. We'll see you online and
[54:41] again here tomorrow evening. I'm Jim
[54:43] Lara. Thank you and good night.
[54:52] Major funding for the NewsHour with Jim
[54:54] Lara is provided by
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[55:43] >> I'm Rick Dancer and this is my wife
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[56:28] >> This is outrageous.
[56:30] >> Jeff Mkeley backs a bill to take away
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[56:38] Why would I do that for a union?
[56:40] >> I think Card Check is an invasion of our
[56:42] privacy. Without privacy, there's
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[56:46] and liberties as Americans.
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