Bailing out the Ailing Auto's

" Ailing auto industry switching into high gear congressman Barney Frank writing legislation today. That would offer emergency loans for Detroit but that's an exchange for federal stake in the Big Three that means you. And try and pull taxpayers own some. Of the car companies Roger cement maker the author of how Americans can buy American things auto makers need to bail out. But John and the editor of real clear markets disagrees. Gentlemen good evening thanks for being here Roger let's start with you you say we need to save them why."

" First -- nice to be on the air if you again Alexis. Listen I can understand why some people would be against this what. People would think would be a subsidy for American auto makers but we have to look at this is not a cost the American taxpayer. It's an investment in America. And let me tell you why we've been subsidizing foreign auto makers for years to the tune of about a 100000 dollars per worker. To lure those factors to the United States because of the massive tax giveaways and incentives that are rarely offered to American auto makers so this amounts to leveling leveling the playing field more than does anything else like a subsidy."

" John you completely disagree tell me why I completely disagree we've been office also subsidizing US auto makers for years first -- all by building roads everywhere around the United States or what these cars to drive but secondly. That the US auto makers want to weaker dollar starting in 1971 and it's actually fallen to under 46%. Versus the yen during that time we subsidize the US auto makers massively and it's been inflation for the rest the United States we've seen. Our paychecks eviscerate it by a weak dollar policy pushed by the Big Three auto makers."

" John just is saying that everybody's asking. Why. Not. Forced them or why not they do it themselves filed for chapter eleven what is so wrong with that thought process of chapter eleven and a restructuring."

" That's the best scenario -- is what happens GMs not going vanished either for Chrysler what will happen. Is well run auto companies like the Toyota as the new songs -- Volkswagen's won't come in and buy these companies and run them well with a problem we have today is incompetent management Detroit. And give them more money to continue to fail would be huge mistake."

" Roger you disagree tell me why. Well because. The Big Three combined have about a 105. Factories in the United States. Toyota Nissan and Honda combined have 44. And a lot of these customers for General Motors these suppliers of the same people that -- don't Toyota and these other foreign auto makers so what's it's not the Toyota and the like are going to build a 105 factories to take up the slack overnight it's not going to happen you're gonna have a domino effect of the people that -- General Motors that also supply Toyota Toyota is not going to be able to build cars either because like we're gonna be out of work and go back."

" They weren't along with them Clinton -- on hand. Let's cola Spain Spain. I mean the fact of the matter is -- a little industry is going to experience the same level if not even great amount of pain next year. You people going to step up by cars we've factories in this country right now they're producing north of fifteen million cars we demand for maybe ten what is believed demand for eight million cars next year I -- isn't fact of the matter no matter what we do the auto industry is changing."

" Right but I don't see why General Motors and Ford should bear the burden of lessons lessening their production and to take the burden you know they've been aware of bearing the weight of an honorable burdened by supporting. Health care for retirees and intentions were the Japanese government takes care of that for one afternoon happening -- out -- John please don't interrupt me I didn't in Europe Q okay. That's why it's a subsidy for foreign auto makers because the government takes care of that in Japan. We have to take the got a general more sense to take care of it here and the definition of a subsidy very simple if you grant cost exemptions from one. Company within a particular industry and you don't grant that same cost exemption to another one that constitutes a subsidy that's the definition there's no arguing now."

" John go ahead of the Japanese government is making this mistake that doesn't mean that we should compounded by making the same mistake the reality is the Big Three auto makers have failed their customers say. And they've also failed their investors judging by the stock price the idea that in the midst of this credit crisis or capital is constrained that we should reach of the taxpayers' pockets again. To bailout can't companies have shown a complete misuse and and."

" Okay but John on the other hand on the other hand let's face the facts and the facts are there we're talking about tremendous many jobs this country which nobody wants to see of course there's going to be corrections in the industry. On the other hand do we want to allow one of the largest manufacturing bases in this country. To go by the wayside if we do nothing about it if we're giving a 150 billion dollars AIG. Do we have to consider giving some money to the auto makers."

" I think not have been in the yet it's already gone by the wayside Michigan has been failing for years it's got the highest rate of unemployment the United States. "

" Armageddon is here this is not working the idea that we should send more good money after bad. To prop up some of the worst run companies in the United States is offensive. Particularly as the rest of the country is struggling to pay the bills are right Roger and John we have to leave it there thank you guys for the healthy and lively --"