While Wall St. gets bailouts the U.S. industry gets strings attached with the aid they get. CEOs in the financial industry continue to get bonuses and American workers are told their contracts have to be torn up because they make too much money. Read the transcript of Olbermann's questioning of this double standard.
OLBERMANN: With us now, Dan Gross, senior editor at “Newsweek” magazine.
Much thanks for your time tonight, sir.
DAN GROSS, NEWSWEEK: Good to be here.
OLBERMANN: Obviously, the president did not forcibly take over either G.M. or Chrysler today. But to what extent does he now—in at least the political sense—own both of these car companies?
GROSS: He totally owns them, their short-term fate. And he really owns the workers as well—because what we saw today is a sense that these are going to be either broken up or severely shrunk and they‘re going to be tens—perhaps hundreds of thousands of people who will need to find other things to do. He got at that a little—toward the end of his remarks about what sorts of things the administration would be doing.
But I think we need to hear a lot more details about that.
OLBERMANN: Politico.com reported today that Mr. Obama has what they described as a more jaundiced view of the automakers than Wall Street. Given that G.M.‘s mistake was to keep feeding the American appetite for SUV, Wall Street‘s mistake was to, you know, cripple the entire global economy, how does Wall Street come out more favorably in this comparison in a view from any White House?
GROSS: Well, two reasons. One, you know, the genius of Wall Street was to screw thing up on such a massive, galactic scale that their demise would threaten western civilization as we know it and a lot of eastern civilization. Whereas, the car companies would just take down a lot of kind of blue collar people and dealerships in the Midwest.
The second reason is a kind of cultural fit. You know, there are a lot of people in the Democratic Party and this administration who are tight with people on Wall Street. These are their classmates from college.
When you are running for president you go to the Hamptons, you got to Upper East Side of Manhattan, you go to Martha‘s Vineyard, you rub elbows with these people. This is where you raise money from. It‘s one of the power bases. You are not in Birmingham and Southfield and the suburbs of Detroit. So, there‘s a kind of cultural fit here, too.
OLBERMANN: But—and exactly to that point. The same White House that argued it had to intervene and save the bonuses of AIG executives, because these are contractually obligated bonuses, is now telling middle-class union workers, not just these ones but ones essentially across the nation, they have to make some concessions even though those concessions might violate or render neutral their contracts.
I mean, how does the White House economic team which is—as you suggest—run by Wall Street veterans portray this as anything but, you know, another edition with new membership of the same rich boy‘s club in the same sort of action they‘ve taken for 70 or 150 years?
GROSS: Well, it will take some fancy footwork. But, you know, they might say in their defense that, yes, we are—you know, in AIG‘s case contracts were sacred. We‘re, you know, we are not a nation of laws without them. In this case, we have to look to rip up the union contracts but also the deals that the franchisees have, all the dealers, they have these laws. They want to rip those up as well.
And importantly, they are telling the bondholders, who are other rich people, that they might have to settle for less than they otherwise might expect to receive.
OLBERMANN: So, what next, Dan, for Detroit and for the White House?
GROSS: I think this is the beginning of a process rather than the end. I think you have to divide between Chrysler, which I think they have essentially given up on; and to be fair, Chrysler‘s owners, Cerberus, have probably come close to giving up on. We have Fiat coming in. They‘re going to get a big chunk of ownership for no money down basically. We‘re not sure if they‘re going to get the loans.
And truth be told, they are the fifth biggest automaker. Their departure would not be such a big deal. It‘s GM that we really have to worry about. Just as we have AIG and Citigroup problem, not a banking problem; we have a GM problem, not a car-making problem.
OLBERMANN: Dan Gross of “Newsweek,” author also of “Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation”—thank you, Dan.
GROSS: Thank you.