'Meet the Press' transcript for Nov. 16, 2008

MR. TOM FRIEDMAN:  I think he can.  He may have to, Tom.  You know, Carl Levin, what did he say?  He said, "You know, just give us this $25 billion and, and we'll be OK." Tom, if I thought with $25 billion we could save this industry, I'd be for it, OK?  But I see no plan right now, no reason to suggest that these people who have driven this industry into a complete ditch have a plan to get it out in the long term and not come back to a six, three months from now, for another $25 billion.  Show me that plan.

Remember, what was Detroit's plan two years ago when they, when they confronted this problem?  It was to subsidize gasoline at a $1.99 a gallon if you bought a Hummer or Suburban or a big truck--that was their idea of innovation.  So, you know, it was like a crack dealer offering subsidized crack rather than, you know, going to a clinic to get--to get off the drug. And, and who is the enabler of that?  The enabler of that were the Carl Levins, all the Michigan delegation who didn't go to these people.  The outrage of these people, "Now they--we have to save these jobs!" Where was their outrage two years ago, OK, about getting them to be more innovative, to getting them on top of the energy efficiency question?  They have been enabling the destruction of this industry.  So show me a plan.  Show me a plan that says if we give you this $25 billion you're actually going to change. Absent that--remember, Tom, we're going to charge this $25 billion on our kids' Visa cards.  This goes on our kids' Visa cards, and we have a moral obligation to make sure this is spent wisely.

MR. BROKAW:  That's a pretty tough position, Katty.  Do you think the president can do that?

MS. KATTY KAY:  It is a pretty tough position, and, you know, you hear all the management reasons, the fuel efficiency reasons for letting GM go down the tubes.  And there are many of them, and Tom makes them very eloquently.  I just want to put one countervailing position, which I'm hearing from smart economists who say under normal circumstances, yes, we let GM go the way the market has decided.  These are not normal circumstances.  The economy is so fragile and economists are so scared of the state of the economy that can it withstand the kind of shock to the country if GM were to go?  The effect on suppliers, the effect on deliverers, the effect on advertisers, all those people who have pensions, some 600,000 who still have pensions dependent on GM.  That's their concern is that the, the--if you can come up with a deal whereby, effectively, the management of GM is taken out at dawn and hung, drawn and quartered so you stop the idea or moral hazard, you stop other companies then lining up and saying, "OK, they got a bailout.  That was easy for them.  I'm going to ask for a bailout, too." You make it so punitive, this bailout for GM, that perhaps, in these unique circumstances, there is more of a reason to go with a bailout than there would be otherwise.

MR. BROKAW:  Andrea Mitchell, they've got a lot on their plate at the Obama transition team trying to fill these jobs, dealing with the overall economy. Do you hear anything about a plan for Detroit?

MS. ANDREA MITCHELL:  They do believe that there has to be a car czar, a plan for Detroit.  They know they've got to deal with this.  This really will, I think, be the issue.  The labor unions raised $80 million for Barack Obama. The labor union constituency is going to be one of his big issues on the auto industry and on trade in general.  Trade, which was really the most important result of the G20 summit this weekend, the decision not to be protectionist, to push back against the French President Sarkozy on that issue.  And I think that is going to be the real test for him.  Yes, they know they have to come up with a plan for Detroit.  He mentions it in his first radio address as president-elect, the one that he YouTubed, which is the--another initiative, technology initiative of him reaching out.  But they don't quite know how they're going to balance this.  I think it is one issue why he resigned his Senate seat--one of several issues that he will not have to put to the test to vote this week on the auto industry bailout as they push for a vote.

MR. BROKAW:  And, Tavis Smiley, he did campaign very hard that "I'm the guy who can bring jobs back to America." He spoke to the working class primarily. Can he say to Detroit, "I'm sorry, no help here or there're going to be some really draconian changes," and that, too, will hurt the workers.  UAW members are going to have to take pay cuts and look at reduced pensions.

MR. SMILEY:  I'm glad you raised the issue of the working class because my approach on this is a bit different.  While I agree with everything, as we'd say in the black church, since it's Sunday morning, to Tom Friedman, "Amen." But I'm glad you raised the working class, Tom, because I, I, I look at this from a different perspective.  I think that government has to always be challenged to be responsible to its citizens who are disadvantaged and disenfranchised.  And the truth of the matter is that this entire economic crisis has been a top-down conversation and not a bottom-up conversation. Detroit, the city, is the poorest city in the country.  In some, in, in some economic areas and categories, the unemployment rate in Detroit is three times, triple the national average.  And so everyday people, the working poor and the very poor, cannot be left out of this conversation.  And so I don't think that poor people--although we had three presidential debates, let's be honest about it, where the word poverty never came up, where the working poor and the very poor were never discussed in three presidential debates.  I don't think, Tom, that the working poor and the very poor in this country begrudge people who are better off.  They understand, I think, that there are three million jobs tied into this auto industry.  At the same time, where is the conversation about corporate mendacity?  Where is the conversation about everyday people and how this government is responsible to those persons who are disadvantaged, disenfranchised?  I've not seen enough of that conversation yet.  We've been talking about bailing out industry, talking about bailing out Wall Street.  Every now and then, some conversation about Main Street.  But no conversation about the side street, and that's where too many Americans live these days.

MR. BROKAW:  We--let me just share with you what Robert Reich, who was the secretary of labor in the Clinton administration and economic adviser now to President-elect Obama, had to say about what needs to be done for Detroit. "`In exchange for government aid' ...  economist and Obama adviser Robert Reich wrote on his Web site this week ...  `the UAW should agree to some across-the-board wage and benefit cuts.'" That's the first challenge.  And then, of course, as Andrea mentioned, labor raised $80 million for Barack Obama.  Organized labor, which spent more than $80 million to put Democrats in the White House and Congress, wants Obama to deliver on its priority new rules to make it easier to unionize workplaces.  We've got a coming clash here.

MS. MITCHELL:  We do have a coming clash.  And, you know, Jennifer Granholm, the Michigan governor, was at the table, as was Rob Reich and others, who do represent, you know, compelling arguments, Tavis, for the underclass and for the people who will be affected.  But at the same time, as Reich mentioned in what you just pointed out, the labor unions are going to be asked to make some concessions.  And what the UAW leaders said in an unusual news conference only yesterday was, "We've made enough concessions." So, as you point out, there is the clash.  The ability to organize, card check is the, the short term for it...

MR. BROKAW:  Without a secret ballot.

MS. MITCHELL:  Without a secret ballot, is a big concession to labor, and that is gong to be one of the, one of the early fights in this Congress.  And Barack Obama is going to have to make a choice on all these things as to whether he can find ways around it, and can answer the economists' argument "Why is Toyota successful?" which is producing American jobs.  It's just that they're not union jobs.

MR. BROKAW:  Tom, do we need to hear more urgently from Barack Obama?  He is going to be on "60 Minutes" tonight.  But do--he has obviously made a decision not to get involved in much policy between now and January 20th.  He's resigning his Senate seat.  They are going to put together a transition team. We'll talk more about that in a moment.  We'll probably hear sooner rather than later who they have in mind.  But does he have to be a more conspicuous presence, in the meantime, in your judgment?

MR. FRIEDMAN:  Well, I think this is no normal transition, Tom.  We are in a unique economic crisis, and for four reasons, I think.  One, we've never seen this combination of this much leverage that was extended over all these years, this much globalization with this much complexity, this many derivatives, you know, synthetic products that people didn't understand on the upside, let alone on the downside, and then it was started in America.  Not in Thailand, not in Mexico.  You put this much leverage with this much global integration with this many complex instruments started in America, and I tell you, Tom, you have a cocktail that is so explosive.  What is it doing?  It started as a credit crisis, then it morphed into an equity crisis, your stock portfolio went down.  Then it morphed into a consumption crisis; nobody went out and bought.  Then it morphed--now it's morphing into an unemployment crisis.  Then it's coming back and intensifying the credit crisis.  That's the loop we're in now.  And if we don't find a way to get America to go back shopping, to, to get the economy restimulated again, to get a catalyst there, Barack Obama could have some of his inaugural balls in, in soup kitchens.  I mean, I don't know where this is going to be a couple of months from now.

As I, you know, said in my, my, my column this morning, you know, rent the movie, "Jaws," look at that last scene where Roy Scheider, you know, look at that scene where Roy Scheider first glimpses the shark and he comes in and turns to the captain and says, "You're going to need a bigger boat." We're going to need a bigger boat.  This shark is so much bigger.  And, therefore, I think, to go back to your question, Tom, I don't know what--we do only have one president at a time.  Not sure what Obama can do.  But to Tavis' point, we need to get money to homeowners, and we need to recapitalize the banking system.  And people say, "Wait a minute, that's unfair." Banks who were irresponsible are going to get bailed out, that's true.  Homeowners who shouldn't have taken out mortgages are irresponsible--were irresponsible are going to get bailed out along with people who worked hard and paid their mortgages.  But I--they say that's unfair.  I say--I tell you, Tom, fairness is not on the table any more.  There's only two things on the table.  Systemic risk in which we all get wiped out, or we find a way out of this.

MS. KAY:  And this is...

MR. BROKAW:  This seems to have gotten the attention of the members of the G20 who were here this weekend.  It was really a remarkable gathering when you think about it.  When you have the president of Russia and the president of the United States operating essentially on the same platform, the president of Russia saying, "We have a common enemy, the economic crisis, which makes the other difficulties between us seem less important."

MR. FRIEDMAN:  The president of Russia who said to close his stock market.

MR. BROKAW:  Right.  And this--I mean, this is--these are--this is a profound statement, and I'm not sure that we've caught up to the seismic shifts that we're going through here, Katty.

MS. KAY:  Yeah, and I'm not sure that the rest of the world has caught up yet either, Tom.  I mean, there are still a lot of people who arrived here amongst those G20 members this weekend who were feeling very angry at the United States.  There is a lot of blame going around at the moment.  There are countries who turned up--Argentina, Brazil, look at South Africa--who turned up this weekend and said, "You know what?  For the last decade, five, 10 years, we've done the right things.  We have put into position all of those tough macroeconomic structural changes that you asked us to do.  And then, because of some subprime excesses here in the United States that has triggered a real problem, we've lost 30, 40 percent of our stock market value."

That said, I'm hearing that the, the summit on Saturday was seen as a success by almost everybody.  Perhaps not by the French, who would have liked a global regulatory body and who, perhaps, would have liked some tougher language on regulation.  But on issues like trade, the idea that we could get the Doha around talking again on that, get that kick-started by the end of the year, that is very fast.  And the fact that the Indians are now on board on the Doha round, and are prepared to get that on board, those are very positive signs.

You do have some philosophical differences.  You've got President Bush on the eve of the summit talking about the hazards of government intervention.  You have the Europeans, and they are divided on some of this, who are more keen on regulation.  But there is a common recognition that this may have started in New York, but it has triggered now all around the world.  And this--there's not much moral left, there is only hazard left now.  And you have to deal with that, and you have to deal with that whether you're in Argentina or South Africa.  And Americans have to deal with that, too.  If you have a 401(k), you own part of the Argentinean economy.  You have--you have to recognize that, and so then what happens there affects you directly.

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