No 58, Posted by fw, September 05, 2010
Following is a transcription of the commentary from Part 2 of a three-part video documentary film, Overdose: The Next Financial Crisis, which is available for viewing here on the Information Clearing House. I have transcribed most but not all of the commentary from these three parts. Each video part is about 15-minutes long.
Big bailout. Big waste!
Narrator – David Walker was U.S. Comptroller General from 1998 to 2008. He quit because he was so worried about the U.S. economy that he wanted to have the freedom to warn about what may happen.
David M. Walker, Former Comptroller General – In my view, the bailout was necessary in certain regards but in many cases we wasted a lot of money because we didn’t do three things: first, have clearly defined objectives about what we were trying to achieve; secondly, have criteria established up front as to who would get the money and who wouldn’t get the money; and number three, have conditions established up front as to what they could and couldn’t do with the money. And as a result of not having those three things some people got the money that didn’t deserve it, other people got the money that didn’t make good use of it and as a result we had a lot of waste with regard to taxpayer money.
Auto industry exaggerated potential job losses
Richard Wagoner, CEO General Motors 2000-09 – What would it mean if the domestic industry were allowed to fail? You heard Senator Stabenow so I won’t repeat other than to say . . .
Narrator – As a result of the crisis, the situation for the U.S. auto industry had become critical. On November 19, their CEOs fly to Washington to demand money.
Megan McArdle, Business & Economics Editor, The Atlantic – The executives came out and they said if you don’t do this we are going to see a jobs holocaust. They issued extremely high estimates of how many jobs would be lost that included counting every single company that supplies them with anything.
Richard Wagoner – That’s why this is all about a lot more than just Detroit. It’s about saving the U.S. economy from a catastrophic collapse!
Narrator – A month later president Bush gives billions of dollars to General Motors and Chrysler. The money comes from the bailout package that was really only designed to save the financial industry.
GWB – Some U.S. auto executives say that their companies are nearing collapse. And that the only way they can buy time to restructure is with help from the federal government.
Narrator – Megan McArdle is a financial analyst for the Atlantic and has written extensively about the problems of the U.S. auto industry.
Megan McArdle – Congress wanted an excuse to bail out the auto workers and the executive gave them just enough political cover to say, “Ah, well I’m not really doing this because I want auto worker votes and I’m going to give them a huge amount of money. I’m really doing this for the American economy.” But if you look at how much money we gave them, you’re talking about almost a hundred billion dollars, is how much we’ll end up spending on this – you know even if you were saving millions of jobs it would have been cheaper to give every single one of those people a $100,000 to go out and find a new job.
Wall Street’s “cry-baby capitalists”
Gerald Celente – The big guys on Wall Street, they can’t take their losses. They’re cry-baby capitalists. Oh, they preach capitalism for everybody but themselves.
News announcement — The Federal Reserve has cut the interest rate to the lowest level on record. Fed Chairman Ben Bernanke and his colleagues also pledged to use all available tools to contain the widening crisis and the longest recession in a quarter century.
Narrator – December 16, 2008. It is time again to pour alcohol into the punch bowl. The Federal Reserve reduces interest rates to practically zero to restore investor confidence. Other central banks do the same.
Gerald Celente – Hey, have no credit, don’t worry about it. Just sign on the dotted line.
“Let’s have zero interest rates and drop money from helicopters”
Peter Schiff – The housing bubble that they inflated blew up with all the carnage and all the bankruptcies. And now, what is their solution? We’ll just do the same thing we did before. Instead of having interest rates at one percent, let’s have them at zero. And let’s buy everything we can. Let’s print money and buy mortgages. Let’s buy credit card debt, student loans. Let’s buy bonds and let’s drop money from helicopters to try to get the same risk taking, excessive gambling on Wall Street, let’s try to convince Americans who are already loaded up on debt to go out and buy more stuff — to go out and go deeper into debt. And if the banks don’t want to lend them money, let’s make them lend them money. I mean this is economic suicide.