MR. TOM BROKAW: Our issues this Sunday: Can the American car companies survive? Big trouble for the Big Three. Stiff opposition on Capitol Hill to a federal bailout for Detroit. Should America's car companies receive emergency aid or go into bankruptcy? Two key senators square off: the co-chair of the Senate Auto Caucus, Democrat Carl Levin of Michigan; and the ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, Richard Shelby of Alabama.
Then, it's Green Is Universal week at NBC. What is the future for America with energy independence? Joining us, the legendary oil man now turning in a new direction, T. Boone Pickens.
Then, insights and analysis on the future of the American economy, jobs, the auto industry and what's ahead for the Obama Cabinet. Will Hillary Clinton be the new secretary of state? Our roundtable weighs in: Pulitzer Prize-winning columnist Tom Friedman of The New York Times, Katty Kay of the BBC, NBC News correspondent Andrea Mitchell and Tavis Smiley of PBS and PRI.
But first, the $25 billion auto bailout is facing very tough opposition from Republicans on the Hill and some Democrats as well. With us this morning. two key parties in those discussions--Carl Levin, senator from Michigan; and Senator Richard Shelby in Alabama this morning, two men on opposite sides of the argument.
Gentlemen, if I can, I'd like to provide some political context this morning with some recent statements. Here's John Boehner, who is the Republican leader of the House of Representatives: "Spending billions of dollars of additional federal tax dollars with no promises to reform the root causes of crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy." He's from Ohio, which has a big automotive investment.
"It's time for new management and stringent conditions. It's Uncle Sam. It's not Uncle Sucker." That's from Democrat Jim Cooper, a representative from Tennessee. Remember, the Blue Dogs, a group of fiscally conservative congressional Democrats.
Chris Dodd, who is the Senate chairman of the Senate Banking Committee, says, "I don't know of a single Republican who's willing to support" this bill.
And Jim Manley, speaking for Senate Majority Leader Harry Reid, said, "We cannot do it without the support of Senate Republicans, who I hope will join us to pass a bill that saves the jobs and protects the livelihoods of millions of hard-working Americans."
Senator Shelby, no one has been more outspoken than you in opposition to all of this. Are there any conditions that would permit you to vote for a loan or a bailout of some kind for the Detroit Big Three?
SEN. RICHARD SHELBY (R-AL): I haven't seen them yet, Tom. I would--first of all, I think that we would have to see conditions that would fundamentally change the way Detroit does business. They're not building the right products. They did at one time. They've got good workers. But I don't believe they've got good management. They don't innovate. They're a dinosaur, in a sense, and I hate to see this because I would like to see them become lean and, and hungry and innovative. And if they did and put out the right product, they could survive. But I don't believe the $25 billion they're talking about will, will make them survive. It's just postponing the inevitable.
MR. BROKAW: You have said that this is not a national problem, which stunned a lot of people. Let us just take you through some of the jobs that are involved here. Let's begin in the industrial Midwest, if we can. Most researchers say there are three million jobs nationwide. As you can see there in Michigan, Illinois, Missouri, Indiana and Ohio there are thousands of jobs that are involved. And then if you talk just about dealerships across the country, nationwide there are about 740,000 jobs involved with the Big Three in dealerships alone; General Motors, 325,000 jobs in their GM dealers across America. So, in fact, it is a national problem, isn't it?
SEN. SHELBY: Well, I don't say it's a national problem. It could be a national problem. It's a national concern now. But it could be a national problem, a big one if we keep putting money--if we put $25 billion in, that's just the beginning. Look at AIG. Look at the others. Then you're going--they're going to want $50 billion more, and it's going to come because the political game is there. I think it's a mistake. If--they would be in a lot of people's judgment a lot better off to, to go through Chapter 11 where they could reorganize, get rid of the management, get rid of the boards, the people who've brought them to where they are today. This is a dead-end, it's a road to nowhere, and it's a big burden on the American taxpayer.
MR. BROKAW: All right, let's go to Carl Levin, the senator from Michigan who's in Detroit this morning. There are two schools, I think that you can say, broadly speaking, Senator Levin. One is do the bailout with some conditions attached, or allow them to go into bankruptcy. Here's what's gotten the attention of a lot of people. Rick Wagoner, who is the CEO of General Motors, said he is not prepared to resign in return for government aid. "I don't think it'd be a very smart move," he said. "I think our job is to make sure we have the best management team to run GM. It's not clear to me what purpose would be served."
How can you possibly argue for federal aid to a company that has been led into this difficulty by a man who said he won't resign?
SEN. CARL LEVIN (D-MI): Well, this is a national problem, first of all, without any question. We've got at least three million jobs dependent upon this industry surviving. We've got--this is a Main Street problem. We've got 10,000 or more dealers. They, they cover the country in every town of this country. The auto industry touches millions and millions of lives. One out of 10 jobs in this country are auto related. Twenty percent of our retail sales are auto related or automobiles. So this is a national problem.
Secondly, there is, unlike some of the statements that you read, there is bipartisan support for support for this industry to get them through a very difficult problem, including Senator Voinovich of Ohio who is co-chairman of the task force that you made reference to. Other countries are supporting their industries through this difficult period. The European automakers are requesting $56 billion in temporary support, and we expect that they'll be getting it from the European community. This is not a Big Three problem alone. This current crisis is a crisis in the economy where there is no credit available to purchase and where people are not buying cars because they are afraid. They are delaying the major purchases that they need to make because of the uncertainly in the economy. So this is a...
MR. BROKAW: But, Senator, the question...
SEN. LEVIN: ...different issue, this is a different issue from the need to restructure the auto industry. Finally, on the GM issue, nine of the new models are hybrids for General Motors. General Motors has twice as many cars, twice as many models that get 30 miles per gallon as any other automaker. So they have begun the changeover, they've begun the restructuring. And if it was the difference between getting this kind of support or not, obviously the management should consider resigning. If the government wants to intrude that much into the operations of a company where it can decide who is the right management and who isn't, then I believe they should consider resigning.
MR. BROKAW: But if you said that...
SEN. LEVIN: That should not be...
MR. BROKAW: ...but if you said that...
SEN. LEVIN: ...the impediment.
MR. BROKAW: But, Senator, have you said that directly to Mr. Wagoner? You say the government...
SEN. LEVIN: I'd be happy to say that to...
MR. BROKAW: ...should decide. The government's going to provide $25 billion of taxpayer money...
SEN. LEVIN: Fine.
MR. BROKAW: ...shouldn't they have a say in who is going to be the management going forward?
SEN. LEVIN: They should have more than a say. There's an oversight board in the provision for $700 billion, by the way, that's been provided to the financial industry, and what this would represent is 4 percent of that $700 billion. Four percent to save an industry which is the most important single industry in America. I'd be happy to tell Rick Wagoner that he ought to consider resigning if that is the difference...
MR. BROKAW: Well...
SEN. LEVIN: ...between getting this kind of support or not. I haven't been asked to do that. You're asking me now would I. I'd be happy to do that.
MR. BROKAW: And what have you heard from President-elect Obama about what should be done? I suspect that you've been in conversation with him. And can something be done before the end of the year or are you going to have to wait until the new administration takes office?
SEN. LEVIN: Yeah, what was missing in your list of quotes, by the way, was not, was not only Obama, but was Bush. Both the president and the president-elect support this kind of immediate aid. The only difference between them is the source of it, whether or not it's one pot of $25 billion, which is intended for the future high-tech vehicles, or whether it's part of the $700 billion stabilization fund. Both already appropriated, which Democrats in the Congress favor. But that is the big issue which divides the White House from the leadership of the Congress. And by the way, the Republican leader in the Senate favors immediate support for this industry. All of us want conditions, all of us are--want to support the taxpayers, all of us want to continue the restructuring; but in order to do that, you've got to have this interim support as every other country with an automobile industry is going to do. No other country with an automobile industry will allow it to go down.
MR. BROKAW: Senator Shelby, did you hear anything in what Senator Levin had to say that would keep you from mounting a filibuster on the floor of the Senate to oppose this?
SEN. RICHARD SHELBY (R-AL): Absolutely. I have a lot of respect, and we're--Carl Levin and I are friends. We work together on a lot of the issues. We totally differ on this. I know he comes and he represents a lot of people that will be deeply affected by Detroit. We all care about our jobs, we care about tomorrow's products. But if we let the money go to General Motors, for example, with the same management, the same ideas, it's money wasted. Mark it down and watch it, and it'll be more money. This is just the beginning of, of corporate welfare in a big, big way.
MR. BROKAW: Can I read...
SEN. LEVIN: It's not the beginning.
MR. BROKAW: Can I read something?
SEN. LEVIN: It's not the beginning.
SEN. SHELBY: Well, we've already got it, I said, in a big way.
SEN. LEVIN: It's not the beginning, Tom. We've done this before. We--we've--we supported Chrysler when it was in this kind of difficulty. People said, "Oh my God, that's corporate welfare." We made money, actually, by supporting Chrysler. We did it with the airline industries in, in 2001. The airline industry was in real trouble. The government came to its support. We've done this in a number of industries; this is not unprecedented. The issue's whether we're going to have manufacturing in America or whether we're going to see the continuation of the loss of millions of jobs overseas.
MR. BROKAW: Senator, Senator Shelby...
SEN. SHELBY: We don't need government--governmental subsidies for manufacturing in this country. It's the French model, it's the wrong road, we will pay for it. The average American taxpayer is going to pay dearly for this, if I'm not wrong.
MR. BROKAW: All right, let me just ask you...
SEN. LEVIN: Two-hundred billion in tax--$200 billion in lost taxes is the estimate if the domestic automobile industry goes under; $200 billion lost to the taxpayers of America through the loss of these three million jobs, the pickup of all the pensions, which would be necessary.
MR. BROKAW: Let me just ask you both about bankruptcy. Here's from The New York Times, Michelle Maynard writing on Thursday. "A bankruptcy filing by a single Detroit car company could cost the economy $175 billion in the first year of the legal case in lost employee income and tax revenue, the Center for Automotive Research estimated this week. Given the complexity, a GM bankruptcy case could last three years or more.
And, Senator Shelby, 80 percent of car buyers who were questioned said they would not buy a car from a company in bankruptcy because it's a long-term investment, it's not like an airline, it's something that they would have to depend on to get parts and service. So is bankruptcy really a viable option if you want to, in the long term, save the Big Three in Detroit?
SEN. SHELBY: It is, it is a viable option, but the Big Three, they're going to have to save themselves. If they don't--if they keep going down the road--and I predict they will--they're on now with just a blood transfusion, a lot of money, it won't matter. They're postponing, as I said earlier, the inevitable if they don't change the way they're doing business, if they're not innovative, if they're not willing to face up to their workers and say "Look, we've got to renegotiate some things here, we're not making money." The government cannot subsidize and should not subsidize jobs like this, and that's what the road we're going down is going to do.
MR. BROKAW: Senator Levin, let me just read to you something that Tom Friedman wrote in The New York Times last week. "The blame for this travesty not only belongs to the auto executives, but must be shared with the entire Michigan delegation in the House and Senate, virtually all of them, year after year, voted however Detroit automakers and unions instructed them to vote. That shielded GM, Ford and Chrysler from environmental concerns, mileage concerns and the full impact of global competition that could have forced Detroit to adapt a long time ago."
At a time when Toyota was producing the Prius and Honda, much more gas-friendly cars, GM, in fact, was turning out the Cadillac Escalade, the Hummers and other big SUVs that were eating a lot of gasoline when a lot of people were raising flags.
SEN. LEVIN: We just voted to increase the mileage requirements earlier this year. We all voted for that, we came to an agreement on it. We can all look back at history and look for plenty of fault in plenty of places, by the way, including the Big Three. But this has changed, and what Tom Friedman and others have not recognized is the significant changes that have taken place. Half of the, of the hourly workers at GM have been let go in order to restructure GM. Over a third of the white collar workers, the salary workers, have been let go in order to help restructure. The, the unions have taken major hits on benefits. And we've also seen GM, Ford and Chrysler shift their product mix. It was under a lot of pressure from the Tom Friedmans and others. Fine. But it has had an effect. And what troubles me is that people do not see that that restructuring and that move into the high-tech and advanced technology vehicles has begun significantly.
As I said before, GM now produces more models getting more than 30 miles per gallon, twice as many, as any of its competitors. Ford, Chrysler are moving into the hybrids. We're doing the plug-ins. GM is going to lead the way in plug-in hybrids if people will recognize that this isn't the '70s when the, when the Big Three were producing inferior products. Things have changed, if people will only recognize what the Big Three, what the UAW have worked out in terms of concessions, in terms of pay cuts, cuts, in terms of benefit cuts. Recognize that change, but let it happen. We can't get there unless we have this temporary infusion to get it over a problem which is not the creation of the Big Three. This economic collapse is not the--was not the caused by the Big Three. They had problems that they did cause 10 years and 20 years ago. They've changed. But the economic circumstances that we find ourselves in is an international, global economic problem that, again, no other country with an auto industry will allow their industry to drop out and die.
MR. BROKAW: Senator Shelby, you get the last word here.
SEN. LEVIN: Yeah, he should.
MR. BROKAW: You're in Tuscaloosa, Alabama. Are you...
SEN. SHELBY: Thank you.
MR. BROKAW: ...prepared to leave the studios here today and go to the Tuscaloosa Chevrolet dealership just off I-59?
SEN. SHELBY: Absolutely I would.
MR. BROKAW: And...
SEN. SHELBY: And I would hope that...
MR. BROKAW: And, and...
SEN. SHELBY: ...they continue to produce good cars. I've bought them before and will buy them again. But this--these companies are going to have to downsize, they're going to have to be innovative, they're going to have to change their whole model. And the government, at the end of the day, Tom, should not choose which companies are going to survive or not survive. We should let the market work that way. And it has...
SEN. LEVIN: Nor should we choose its leaders.
SEN. SHELBY: ...in the past, and it will in the future.
MR. BROKAW: Do you think--gentlemen, let's see if we can get any agreement on this. Do you think this will be resolved in the lame-duck session?
Senator Levin, first of all.
SEN. LEVIN: I do. I think that the leaders in both houses want this interim support, Democrats and Republicans. There's a difference on which is the best way to do it, but they agree, as does President Bush and President-elect Obama, that there must be this support so that we have an industry which can continue to do the innovation which has already begun.
MR. BROKAW: And, Senator Shelby, you think it can get done before the end of this lame-duck session?
SEN. SHELBY: I hope it won't get done because I think it's a waste of taxpayers' money. It's throwing money down the drain, and it won't work in the long run. It's postponing the inevitable. Remember that.
MR. BROKAW: All right. Thank you very much, Senator Shelby...
SEN. SHELBY: Thank you.
MR. BROKAW: ...in Tuscaloosa, Alabama.
SEN. LEVIN: Thank you, Tom.
MR. BROKAW: Carl Levin in Michigan. Thanks for being with us.
It is Green Is Universal all week here at NBC, and the issue of energy dependence is certainly key in that discussion. And joining us now, a very familiar figure, the legendary Texas oilman T. Boone Pickens.
Welcome, Mr. Pickens, from Dallas this morning.
MR. T. BOONE PICKENS: Good morning, Tom.
MR. BROKAW: You just heard that very spirited discussion. Do you think the Big Three automobile dealers should survive?
MR. PICKENS: You know, I--it's not my subject. But I wonder, you know, what you're going to do about the next industry. Is it going to be the airlines? Or what if Toyota and Honda want some help, too? I, I don't know. I don't know where it stops.
MR. BROKAW: Well, let me talk about what you have been talking about on television and everywhere else these days, which is converting to wind-driven general--generation of electricity and transferring natural gas to big public transportation. I am told that, given the perilous state of the economy, the decline in oil prices, which has not made it as urgent in the minds of a lot of consumers, that you find yourself now at a very difficult crossroads financially in your own situation, and you've had to call a halt to your development plans.
MR. PICKENS: Well, the wind, you know, it--I've got a--I had planned on 30 percent equity, 70 percent debt, and I can't get any, any, any money for that at this point. But it doesn't mean that's the end of it. It's been postponed is all it is. And so--but we'll get up and, and going. I don't receive my first turbines until 2010, so I'll get it done and we'll be going by 2010. So it's--that--we have to get--in America, we have to get on our own resources. And wind and solar are going to have to be used--they--for all kinds of reasons. But one, we're going to have to add 20 percent more to our power generation infrastructure in the next 10 years. So that's 200,000 megawatts. That could really help us. The first year, when you start that program, and it should be started within the next year or two, that when you start that program the first year'll be 138,000 jobs. And by the time you finish it, it'll be three and a half million jobs. So the, the wind infrastructure is--it's going to have to be done. When you do that, you're going to release a lot of natural gas, and it--natural gas is abundant. We have abundant natural gas in American. It's the cheapest natural gas in the world. So here we have an abundant, clean by eight--cleaner by 80 percent than diesel, cheaper; and it's ours. We need to put our heavy duty 18-wheelers on the natural gas.
MR. BROKAW: When you went to President-elect Obama and talked to him about your plan, was he enthusiastic and did he agree to support it as a high priority in his new administration?
MR. PICKENS: Well, when you say enthusiastic, I wouldn't say he was jumping up and down. But he asked a lot of questions and took notes. But now, two times I've heard him say that in 10 years that we will not be importing oil from the Mideast. If that's--and, and I believe him when he says that. Which tells me he has a plan. And that plan would have to use natural gas, because natural gas is the--it's the one and only fuel that moves an 18-wheeler other than diesel and gasoline. You can't do it with a hybrid, you can't do it with a battery, you can't do it with a fuel cell. The only fuel--so when you--it's not like we're choosing a fuel, it's the only fuel that we have in America that will replace foreign oil.
MR. BROKAW: Senator Obama is very much in favor of having a million electric cars in a very short period of time. Do you think that that is practicable, and is it part of your larger scheme?
MR. PICKENS: Well, I like the idea. There's no--the plug-in hybrid's good. But think, Tom, one million of those looks big on a parking lot. But you got to think--you got to look at the whole picture. There are 250 million vehicles in America, and the hybrid, all it does is move the light duty, you know, cars and trucks--or pickups. But the trucks, the big stuff, has got to be moved by natural gas. But when you look at 250 million vehicles and you're importing 70 percent of your oil from foreign countries, and of the 70 percent, 50 percent comes from the Mideast. So if, if Senator Obama is going to accomplish what he wants to do--it's all here. We can do it. In America, it's interesting, because this has nothing to do with politics. This has something to do with all of us in this country. And we can all pull together, do the right things, and we will solve the energy problem.
MR. BROKAW: Former Vice President Al Gore has another plan for the generation of electricity in this country. He wants to take it entirely off the carbon footprint, remove it from oil and coal, those kinds of fuels and go to alternative forms of energy, and he wants to keep nuclear in place where it is. Can both of your schemes fit in the best interest of the country?
MR. PICKENS: There are some things that, that, that Al and I have in common. We have--we've talked about this subject. I think that Al can go along with the bridge of natural gas to the battery transportation fuel generation, which is 20 to 30 years away for--to get it to the level that I think it will have to be to, to take out foreign oil. So here you're--you've, you've got the bridge, and you go ahead and use it, the natural gas, and get to the battery as quick as you can.
MR. BROKAW: And, Mr. Pickens, let me ask you about this as well. The price of oil has dropped, as you know better than anyone, down to around $50 or $60 a barrel. That has driven down gasoline prices. People don't feel the same urgency that they did last summer when they were paying more than $4 a gallon for gasoline. Does that relieve the political pressure on members of Congress and even on your efforts to get something else done that is an alternative to the traditional way of fueling transportation in this country?
MR. PICKENS: Well, first, we're importing almost 70 percent. I think that is a huge security problem for the country. I want that fixed. So we've got to reduce the dependency on foreign oil. The cost of it, we got lucky. But we got lucky, but there may be another part to it, too. When I launched my campaign on July the 8th, gasoline was $4.11. Today it's half that price. I don't know. If you look back over the history of oil prices, gasoline prices, we've yo-yoed at times. In the '70s we--the price went up, and then we had plenty of oil all at once from the Mideast. When we did, the price when down. We put away any ideas of renewables at that point. And then in the '80s, the '90s and here we are again. The price has gone down, so, oh, boy, we're fixed. Well, we're not fixed because we're still importing almost 70 percent.
But this is great to have cheaper gasoline prices, no question about that. If there's anything that helps our economy, it's lower energy costs. So--but it doesn't mean that we've solved any problem because, over the history of 40 years of no energy plan in America, we now have to have an energy plan. And I think we've got it. There are only two ways you can go, Tom, on this. One, you have an energy plan to solve the problem, and if you don't have an energy plan that means you're for foreign oil. So it's going to come down to a very clear up or down, and it's going to be the American people are going to--are going to demand an energy plan for the future generations of our country.
MR. BROKAW: For most of your career, Mr. Pickens, you were a traditional Texas oilman, one of the most successful in the game, and of course it was in your interest for the Big Three in Detroit to continue to turn out those big automobiles that had a big appetite for oil-based products. As you look back on your career now, do you have any regrets about what you did earlier? And did you ever think, at that time when you were in the midst of your oil career, "What are we doing to this country?"
MR. PICKENS: I don't think so. You know, I was a good geologist and I found a lot of oil, and that was the business I was in. And, you know, you were burning it in your car and so--I was too and the rest of the people in America. So what this comes down to it's--you know, if you want to blame somebody for it, you can say you didn't have the leadership in Washington and start there. But all of us in America used the oil. And the reason we did, the gasoline was cheap. It was cheap, and that's why we did it. And now when we saw gasoline--when we saw oil go to $100 a barrel all of us realized that we're in a different, we're in a different world now. And if you think oil's going to stay down at $50 and $60, I, I'll make you a $10 bet on that, that we'll be back to $100 a year from now. So--and we're going to--it's going to move on up. If we don't do anything--go, go with me, fast-forward back, or fast backward, that 40 years...
MR. BROKAW: Rewind.
MR. PICKENS: ...40 years no plan. Now, if we go fast-forward 10 years with the same approach to energy in America, where will we be? 2018 we'll be importing 75 percent of our oil and the price will be $200 to $300 a barrel. That is not going to work.
MR. BROKAW: T. Boone Pickens, thank you very much for being with us. I know that we'll be hearing from you in the days and years to come.
And coming up next, the future of the American economy. What's ahead for the Obama administration? What's going to happen to Detroit? Our political roundtable--Tom Friedman, Katty Kay, Andrea Mitchell, Tavis Smiley--all next here on MEET THE PRESS.
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MR. BROKAW: Our political roundtable after this brief station break.
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MR. BROKAW: We're back now with our political roundtable: Katty Kay of the BBC, Tom Friedman of The New York Times, Tavis Smiley of PRI and PBS, and Andrea Mitchell of NBC News.
Welcome to all of you. We had a very spirited discussion here at the beginning of Detroit. I believe it is the issue that is mesmerizing this country. In every community in America there are dealers and car owners.
Tom, let's begin with you. Can Barack Obama, the newly elected Democrat, as president of the United States look Detroit in the eye and say, "Drop dead."
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.
MR. BROKAW: Let's move to American politics if we can. Andrea Mitchell was the first to report last week that Senator Hillary Clinton was having conversations with Barack Obama, the job of secretary of state was on the table. If not offered, at least there were talks around it. What more do we know about that offer now and when can we expect some resolution? They can't let it just dribble out there forevermore.
MS. MITCHELL: No, they can't. But their, their first priority has to be the economic side before they get this whole national security team together. There are serious conversations on both sides. They met, which in itself is interesting. You have to believe that he would not have invited her to Chicago, she would not have gone if it wasn't a high level of interest on both sides in this. There are some problems. What do you do with Bill Clinton? He would then not be--you know, he could not be the global ambassador on the world stage as, as openly as he has been, and would he then have to disclose the contributors, finally, to his library and foundation, who involve many foreign figures, we, we understand, yet to be identified? And the ethics rules, the questionnaire that the new--the president-elect's team have put out, have questions that would be very hard for Bill Clinton to answer. So that's obvious impediment, but it's--from what I'm being told, one that they believe they could bridge. If this comes together, if this negotiation works, he would have her then out of politics in the 2010 and conceivably the 2012 election round. But certainly in 2010. She'd close down her PAC. She would be in a contained space, if you will, and she would have this world stage, where she is blocked in the Senate. She does not have health care; she made a bid for a subcommittee on health care and was pushed back hard by Senate leadership and by Teddy Kennedy, who said, "Excuse me, I'm still around. That's my agenda." Max Baucus, you know, the Senate Finance Chairman, launched a healthcare initiative the day after the election. So she has no real options for leadership. See does not have seniority in the Senate. She needs a play--a place to be an active person.
MR. BROKAW: And by the way, I heard very directly this week that Senator Kennedy, it's going to be full speed ahead on health care.
MS. MITCHELL: Absolutely.
MR. BROKAW: A number of people are saying we've got to defer it for a year. That is not his attitude at all. He wants to go back to the Senate as soon as the lame duck session begins and start it.
Let's talk some more politics if we can. Valerie Jarrett, who is very, very close to Barack and Michelle Obama, who was named this past week as the senior adviser in the White House. There had been speculation that she would replace Barack Obama in the United States Senate. Now there's a lot of speculation on Jesse Jackson Jr., a congressman from Chicago. Are we about to see a whole new generation of young African-American politicians? And what does that say to Jesse Jackson Sr.?
MR. SMILEY: First of all, to Andrea's point about Hillary Clinton, I'm just laughing at the number of senators, even though they're in the majority, who are trying to get out of the U.S. Senate. Kerry, Hillary, everybody wants out of the Senate for some reason, which I can't figure out.
That's said, to your point. We--I'm part--Jesse Jr.--Jesse Jr. and I, Congressman Jackson, are the same age roughly. We are part of the same generation. We are the hope of Dr. King's dream; we are the hope of his father's generation. So I think that African-Americans who, shall we say, are more chronologically gifted, who've experienced more, celebrate the fact that we now are becoming a nation that is more and more every day a country as good as its promise. And so I don't think that the older generation takes offense to this. They celebrate this Obama moment; they celebrate the fact that there may be another African-American in the Senate. I do know, to the point you raised earlier, Tom, that as of today, given that Mr. Obama's resignation from the Senate is effective today, now there is no longer an African-American in the Senate. For all the celebration about a black man in the White House, there is no African-American in the U.S. Senate. That needs to be addressed. That's part of the pressure, I think, that the governor of Illinois, Blagojevich, has right now, to put an African-American in that seat, which is why Congressman Jackson's name keeps coming up. That said, he's not the only African-American, indeed not the only person, obviously, on that list. I think it's a foregone conclusion--not a foregone conclusion, rather, not a foregone conclusion that Jesse Jackson gets that particular seat. The ultimate question is whether or not the person they give the seat for can hold on to that seat. Can you run and win statewide? And that's what they have to be considering. And ultimately, it's not so much about Mr. Obama's politics now as it is about the governor's politics as well, but can you hold on to that seat? I think that's ultimately what they need to be concerned about, not a particular person, but keeping that seat beyond two years from now when that seat comes up.
MR. BROKAW: Tom, how important is it for Barack Obama to have prominent Republicans, if not in Cabinet postings in the administration, in the family of Obama, as he goes forward?
MR. FRIEDMAN: You know, Tom, I think that's important. Obviously, having a woman secretary of state would be important. But I'd step back and say what are the unique conditions right now that actually should affect the actual job qualifications of the next secretary of state? And for me, I'd want a bankruptcy specialist because I think the next secretary of state's biggest job is going to be managing weakness, not, not strength. Managing the weakness of Russia, managing the weakness of China. I might go back to George Bush Sr., Brent Scowcroft. "Hey, guys, what was it like to manage the collapse of the Soviet Union?" Because I think the biggest problem in the next couple years, given this financial crisis, is going to be managing the weakness of some of the big players in the world, not their strength.
MS. KAY: I love the fact that the secretary of state has now become "Madam Secretary of State" almost by default; that you have this title that's been put in front of it.
One of the things that interested me about the whole floating of the Hillary argument and whether she's going to be offered this job, not--and we don't know whether she's been offered this job or not--is why did they do it like this? Having had this flawless campaign almost, in terms of discipline and management for two years, what, what does it gain them by putting Hillary Clinton's name out there as even a possibility in this public way? Because if she's not now offered the job, you have a lot of her supporters who have got very excited in the last couple of days about the idea of "Madam Secretary." And I, I'm not quite sure how politically this advantages them, because they, they've slightly boxed themselves into a corner where they have to offer it to her now.
MS. MITCHELL: Well, let me just say that they were not eager to put it out. This was not floated as a, as a trial balloon. And her own people rigorously refused to even comment on it, refused to even confirm that she was in Chicago for the meeting. So that's not the way it did come out. It was something that, that evolved over the course of about 10 days of reporting.
But that said, it shows a certain largeness of spirit. The "Team of Rivals," our colleague and friend Doris Kearns Goodwin, he certainly has said repeatedly during the campaign and since that he believes in this notion. He has John McCain coming tomorrow to Chicago. That is a very important step, they say, that he sees John McCain as his colleague and partner on a number of issues--climate change and others--in the Senate. You almost see John McCain potentially emerging as more of a partner than Mitch McConnell, right now the Senate Republican leader, with Barack Obama. He really believes in this. There are others who have been mentioned--Chuck Hagel and we, we know Bob Gates at defense, and other Republicans, his good friend Dick Lugar, who has not been persuaded to come to the State Department so far. So he really sees this in a very bipartisan way, in the true spirit of that. And that's the approach that Obama and his advisers believe he has to, he has to take to solve these problems.
MR. BROKAW: Briefly, do you think the future of the Republican Party is much more in the hands of Bobby Jindal, the governor of Louisiana...
MS. MITCHELL: Absolutely.
MR. BROKAW: ...and Tim Pawlenty, the governor of Minnesota, than it is the people in the Senate in Washington?
MS. MITCHELL: I do, and I think it's more in their hands, frankly, than Sarah Palin's, from her performance at the Republican Governors in Miami. She was not substantive; they were. They brought things to the table. And these problem-solving issues, as our, you know, friend David Broder has often mentioned, they come up in the statehouses. These are the laboratories. It's so rare--it's not been since John F. Kennedy that we've had a president-elect from the Senate.
MR. SMILEY: But Jindal or--Jindal or Pawlenty, with all due respect, though, can't advance this party if they do not learn how to play on a larger stage in the most multicultural...
MS. MITCHELL: Absolutely.
MR. SMILEY: ...multiracial, multiethnic America ever--women, youth. They've got to learn to play on a larger stage, and they haven't shown they can do that as yet.
MR. BROKAW: All right, thank you all very much.
We'll be right back.
(Announcements)
MR. BROKAW: A personal note, if you will. Last Thursday, my mother, Jean Conley Brokaw, turned 91. She was born in 1917. She survived the '20s, the darkest days of the Great Depression, World War II, took us through the '50s, the '60s. She was there for the millennium, and she's still going strong. And as she keeps going strong, she keeps me going strong because I have learned so much from her. Happy birthday, Grandma Jean.
That's all for today. Green Is Universal all this week on NBC. Watch for special reports on the environment. We'll be back next week because, if it's Sunday, it's MEET THE PRESS.