On Tuesday’s CBS Evening News, correspondent Chip Reid described Barack Obama’s signing of the massive "stimulus" spending bill into law: "After a mere four weeks in office, the President today signed what he called ‘the most sweeping economic recovery plan in American history’...A new law that he described as a new beginning...In Missouri, the reaction was instantaneous. As the bill was signed, highway commissioners signed a contract, cut a check, and work began on the first project in the nation."
Reid dedicated only one sentence of his report to those opposing the legislation: "On the steps of the Colorado statehouse today, protestors condemned the bill, while Republicans across the nation vowed to analyze every dollar of spending in search of waste and fraud." Reid followed that up with: "The White House is already fighting back. Today launching a web site intended to instill public confidence in the President's plan." None of the protestors or Republican lawmakers were quoted in the story.
On Wednesday’s CBS Early Show, co-host Maggie Rodriguez asked business correspondent Anthony Mason about possible nationalization of banks to solve the economic crisis: "We have to get people buying again. Yesterday, watching Alan Greenspan here in New York, and it's on the cover of The Financial Times today, he said the solution is the banks -- to nationalize the banks. Do you think that's a real option?" Mason replied: "You're hearing this more and more. There is a growing feeling...Some of these major banks, many believe, are, in fact, insolvent, and nationalization is something that is being talked about more and more."
Later, co-host Harry Smith asked economist Mark Zandi if the President’s proposed housing bill was big enough: "Let's talk a little bit about this housing bailout plan. $50 to $100 billion. Does it seem like, maybe, a tiny rain drop in a tidal wave of problems? Is that enough money? And can it do what it hopes to do?" Zandi replied: "...you make a good point. $50 to $100 billion may not be enough."
Zandi went on to defend the stimulus bill: "But you know, I think it's important to realize that policymakers are working hard here. We have a stimulus plan, it isn't perfect, but I think it's a reasonably good plan, it's a big plan... So, with policymakers acting aggressively, I think we will see the fruits of that effort as we make our way through the year. So, yeah, sure it can get worse, but the fact that policymakers are working really hard here, I think, is a reason for some optimism."
Here is a transcript of the relevant portion of the Early Show coverage:
MAGGIE RODRIGUEZ: We have to get people buying again. Yesterday, watching Alan Greenspan here in New York, and it's on the cover of The Financial Times today, he said the solution is the banks -- to nationalize the banks. Do you think that's a real option?
ANTHONY MASON: You're hearing this more and more. There is a growing feeling -- and part of the reason there's so much unease down here on Wall Street in the markets is that the bank problem has not been solved. Some of these major banks, many believe, are, in fact, insolvent, and nationalization is something that is being talked about more and more, Maggie.
RODRIGUEZ: Alright, Anthony Mason, thank you. Another solution, clearly, would be to tackle the housing market, and that is exactly what President Obama is going to do today in Arizona. Coast to coast, 2.3 million homeowners faced foreclosure proceedings last year. Let's go over to our CBS News senior White House correspondent Bill Plante, who's covering that for us this morning. Good morning, Bill.
BILL PLANTE: Good morning to you, Maggie. And if you're wondering why the President has chosen Arizona to announce his mortgage bailout program, here are the grim facts, this state has the third highest foreclosure rate in the nation. There are more than 50,000 empty homes here in the Phoenix area, and thousands of others where the owners are still hanging on, but just barely. Tammy Woods and her husband could lose their house in a matter of weeks.
TAMMY WOODS: Came home from work, drove up, saw a notice on my door, saying that they were going to be auctioning the house off on the 2nd of March.
PLANTE: When her husband lost his job, the Woods' fell seven months behind on their mortgage, and the value of their home has dropped $200,000 below what they owe. But they're hoping that the President's plan will allow them to keep it.
WOODS: This isn't just my problem, because if I lose my home, it affects my neighbors, it affects my neighborhood. It definitely affects all of us.
PLANTE: Under the plan being announced today, people like the Woods family could refinance and see their monthly payments reduced to no more than 31% of their income. With the government making up the difference to the lenders. Bankruptcy judges would be given greater power to modify existing loans and mortgage servicers would be protected from lawsuits by investors. And this plan would allow people who are having trouble to get some help before they're in actual risk of foreclosure. The administration obviously hopes that this will help to begin clearing out some of those toxic mortgages, bad debt, and get the housing market moving again. Maggie.
RODRIGUEZ: Bill Plante in Arizona. Thank you, Bill. An interesting footnote here from the floor of the New York Stock Exchange. Only one of the Dow Jones' 30 components closed up yesterday, and that was Walmart. So clearly, people are looking for the discount, they're looking for the bargain, and the fact that gold and bonds are doing so well shows that people are also looking for a sure thing. That's it from here, let's go back to the studio and Harry.
HARRY SMITH: Alright, thanks very much, Maggie. Autos, housing, Wall Street, one crisis after another. We're joined by Mark Zandi, chief economist at moodyseconomy.com. Good morning, sir.
MARK ZANDI: Good morning.
SMITH: Let's talk a little bit about this housing bailout plan. $50 to $100 billion. Does it seem like, maybe, a tiny rain drop in a tidal wave of problems? Is that enough money? And can it do what it hopes to do?
ZANDI: Well, it's a start. It's a big start. $50 to $100 billion is a lot of money and I think that should help. And if we put together a national modification plan, where we have standards for modifying loans to try and keep people in their homes, I think that will be very helpful and it will allow for more modifications to occur-
SMITH: For the people -- yeah-
ZANDI: But you make a good point -- you make a good point. $50 to $100 billion may not be enough.
SMITH: Right, because this is really a trillion, couple of a trillion dollar problem, to say the least. We looked at this woman who already had a foreclosure notice. Might it be too late for her? And is this program really designed for people who's mortgages are what they say underwater?
ZANDI: Yeah, if you're already in foreclosure, it probably is too late, the process has already begun, but if you're in delinquency, and in some cases, if you have not yet got into delinquency, this plan could be helpful. It could bring down your mortgage rate, the term on your loan could be extended to reduce your monthly mortgage payment, they -- you could receive some help from this.
SMITH: We just hear bad news, after bad news, after bad news, stock market goes down to last fall's -- close to last fall's low. Can it still get worse?
ZANDI: Oh, yeah, sure. Obviously it can get worse. But you know, I think it's important to realize that policymakers are working hard here. We have a stimulus plan, it isn't perfect, but I think it's a reasonably good plan, it's a big plan. We're getting a foreclosure mitigation plan today that will help address the foreclosure problem. We're getting a plan to help the banking system, the financial stability plan that was unveiled last week and we'll get more details, I think, over the next few weeks. So, with policymakers acting aggressively, I think we will see the fruits of that effort as we make our way through the year. So, yeah, sure it can get worse, but the fact that policymakers are working really hard here, I think, is a reason for some optimism.
SMITH: Do you see any light on the horizon? I mean, real life light?
ZANDI: Well, not in the very near term. I mean, no matter -- no matter what policymakers do, it isn't going to take affect until later this summer, later this year. So, you know, I think we need to buckle in for the next three to six months. It's going to be very difficult.
SMITH: Mark Zandi, as always, we appreciate your time and your expertise.
ZANDI: Thank you.
SMITH: You bet.