Latest from Paul Detrick
Full disclosure, you can take the day off.
CBS's "The Early Show" included a statement in its Dec. 18 report on the Big 3 bailout from "auto industry analyst," Dan McGinn. Letting the massive car companies fail "would be like 10 Katrinas hitting America at the same time," McGinn asserted. "The American public understands that."
What the report didn't say is that McGinn is also an adviser to General Motors. Furthermore, TMG Strategies the public relations firm McGinn heads, lists GM as a client. McGinn has been making the case for an auto bailout in many news stories and issuing some compelling statements on behalf of his client.
On MSNBC's "Hardball with Chris Matthews," McGinn was labeled as an "auto industry consultant," Dec. 4. There was no mention of his link to GM.
President-elect Barack Obama named Carol Browner the "czar" of climate and energy policy for the White House, but CNBC's Joe Kernen was wary of her appointment.
"You can see that even in Europe, some of the climate concerns, given this, this once in a lifetime recession, John - to put someone that, an advocate of such strong measures," Kernen said on "Squawk Box" Dec. 11. "Really I've seen her called Brownies or Brownistas. Um. That's a little scary with what's happening right now."
Earlier Kernen was discussing cabinet appoints with CNBC Washington correspondent John Harwood and pointed to new regulations Browner could institute:
"Talk about too big to fail," said managing editor of Time Richard Stengel on MSNBC's "Morning Joe" Dec. 4, who was on the program promoting the latest cover story for the magazine entitled, "The Case for Saving Detroit." Stengel:
"I find the fact that so many Americans are unsympathetic to Detroit to be kind of amazing," Stengel said:
We make the case that in fact the, you know, the Big Three have adapted in a lot of ways ... They haven't managed things well, they have too much capacity, but I mean, talk about being too big to fail in a way, right?
The fact is Americans don't understand what collateralized debt obligations are, yet they sort of said, ‘Okay, let's bailout all of these banks and AIG' and yet people feel like, ‘Hmm what about the big car manufacturers?
Just give us the money and nobody gets hurt.
That was the warning from the mayor of Lansing, Mich., on CBS's "The Early Show" Dec. 2. "You know this is a sure prescription to go from recession to depression if you allow this auto industry, our manufacturing prowess, to fall by the wayside," Virg Bernero warned:
This industry is too important, not just to Lansing, Mich., but to the whole country. This is our manufacturing base. You know we were the arsenal of democracy. We've talked a lot about economic security, and that's number one, but what about national security? You know, we were the arsenal of democracy in World War II; it was the auto industry that helped turn us around. Can you imagine a country, I would ask, can you imagine America losing our manufacturing edge, not having that manufacturing prowess? That hurts our national security.
Virg Bernero says letting Big Three 'fall by the wayside' will 'hurt national security.'
Fox Business Network anchor Alexis Glick is frustrated by the way the government's $700 billion financial bailout is being used, and suggested on "Money for Breakfast" Nov. 21 that it was contributing to market declines.
"I mean, look, we are now at levels at least on the S&P that we haven't been since 1997. You know, people are pretty unhappy with how the TARP fund is going," Glick said in an interview with NYSE Euronex CEO Duncan Niederauer. "I mean, it's got to be - I'm frustrated, I mean I don't know about you."
It's not the first time that Glick has taken issue with the misuse of TARP, the Troubled Asset Relief Program (TARP).
Pulitzer-Prize winning author and professor of history at Stanford University David M. Kennedy told Bloomberg radio Nov. 18 that the current financial crisis bears no comparison to the Great Depression.
"Well, we're not yet in anything remotely resembling the crisis, the scale of crisis of the Great Depression." When Franklin Roosevelt took office in 1933, 13 million Americans were unemployed. "That was 25 percent of the work force," Kennedy told Bloomberg host Tom Keene.
The professor laid out exactly what has changed since the troubled 1930s:
So what exactly is the government doing with your money? Fox Business Network's Alexis Glick would like to know.
Treasury Secretary Henry Paulson announced Nov. 12 he would be redirecting the $700 billion bailout to focus on propping up financial institutions instead of buying troubled mortgage assets, which was the original intent of the rescue plan.
Glick, the host of FBN's "Money for Breakfast," told the CBS's "The Early Show" Nov 13 that the Treasury Department's move away from the original plan to buy up troubled mortgages "does not make sense" and was "actually pretty outrageous":
[T]he markets responded to that yesterday ... Look, the original intent of this Troubled Asset Relief Program was to purchase troubled assets. And I think the marketplace started to adjust several weeks ago when we started to see the size and magnitude of the capital injections.
Alexis Glick tells 'Early Show' Paulson's decision not to buy troubled assets is a 'mess' and 'does not make sense.'
"The government is doing what it can. They've learned the lessons of the 30s. And the lesson of the 30s was to put ideology aside and do whatever you can to bail it out," New York Times Chief Financial Correspondent Floyd Norris said in an Oct. 8 video on the publication's Web site entitled "Echoes from a Dismal Past."
"I agree with you," economics reporter Louis Uchitelle said, also pointing out that it took two years before the government really "stepped in and acted" during the Depression - referring to Franklin Roosevelt's action.
Norris said one of the first lessons of the 1930s was that bailing banks out would "limit the damage of the financial crisis."
"If you go back just two or three years ago, you had this powerful argument that government was the problem. So there is emerging from this an understanding that markets and government are married whether they like it or not," Uchitelle said.
Who's going to be the leader of the financial world in the role of Treasury Secretary under President Obama? It may be Democratic New Jersey Gov. Jon Corzine, who has pushed for an additional economic stimulus package to the tune of $300 billion to support infrastructure projects.
CNBC's Carl Quintanilla asked Corzine outright on "Squawk Box" if he would accept a job in the Obama administration as Treasury Secretary. "If it's offered, governor, will you say no?" Quintanilla asked.
"You know, I'm not going to say never to anything," Corzine said Nov. 5.
"Squawk Box" co-host Joe Kernan encouraged Corzine to consider accepting the job if offered, even as the former U.S. senator expressed his contentment as governor. "You could save the world" as Treasury Secretary, Kernan said.
An Obama victory could boost conservative talk show hosts according to CNBC's "Squawk Box" this election day. The show was more skeptical over the future of left-wing talk. Always with the rhetorical questions, Joe Kernen got things started:
Who is going to win in terms of the cable wars? ... Are we going to become totally nonpartisan now? Do you think that we will be able to bury all of our divisions and there won't be any incendiary cable shows anymore? Who wins if Obama wins? What happens to Olbermann? What's Olbermann going to do, or Maddow?
Co-host Carl Quintanilla suggested "television feeds on conflict" and co-host Rebecca Quick followed up by adding that syndicated radio host Rush Limbaugh "has done better" when there are Democrats in power.
Kernen said that Limbaugh and Fox News Channel and syndicated radio host Sean Hannity both signed new deals and an Obama win would be "great for them."
According to one UCLA economist, the U.S. is economically sound, but people have panicked because of "scary" warnings surrounding the $700 billion bailout.
"Periods of crisis often beget bad policies," Lee E. Ohanian, an economist at the University of California, Los Angeles (UCLA) said in an interview with Reason.tv. The professor stressed that six weeks ago the fundamentals of the economy looked "pretty good," before bailout "rumors" caused "panic":
What I mean by fundamentals are the amount of factories and office buildings and capital equipment we have in place, there's no change in that. There is no change really in individuals' interest in working. We've got the same work force right now we had six weeks ago. Productivity is about the same as it was perhaps even higher. All those fundamentals of the economy are the same.
Ohanian said Gross Domestic Product growth over the last five to six quarters was "on average," and productivity growth was "very high"
Video after the jump.
Wall Street is definitely watching all those polls the networks keep touting.
CNBC's Erin Burnett told MSNBC's "Morning Joe" that Wall Street was predicting that Sen. Barack Obama will win the presidency, but an upset from Sen. John McCain might boost it:
This market has priced in Obama, has not priced in McCain. Some people say that if McCain were to have an upset and win the market might get a big pop, who knows, but down here the conventional wisdom is, is that Obama has been priced into stocks.
When asked to explain the term "priced in" Burnett said, "It just means the market expects it. So, if Obama wins the market probably isn't going to do anything one way or the other."
Wait, wait, wait. I know I am forgetting something. The merger that's it.
"World News Now," which airs on the cable news arm of ABC News, had a treat for viewers on Oct. 31, but the "good news" didn't mention the recently announced merger between Northwest and Delta.
"World News Now" called fare declines "good news for air travel for once," in its news brief. Co-host Jeremy Hubbard said on the broadcast:
Speaking of money, major U.S. airlines are cutting fares for the Thanksgiving and winter holiday seasons. The airlines see price cutting as necessary in the face of a slumping economy. Northwest Airlines started the rush with what basically amounts to a holiday fare sale and most other major airlines are matching Northwest's prices. So if you are planning to fly for the holidays then you could see a savings of up to 25 percent.
CBS's "The Early Show" got an early start on the grumbling Oct. 30.
CBSNews.com and "Early Show" co-host Julie Chen warned viewers about flying the "pricey skies" this "hardly festive" holiday season because airfares have gone "way up." Chen said fares were "absolutely going through the roof."
Chen served up the numbers:
I want to put up two graphics that show how much prices have increased in the last year. To fly from New York to Miami the current average fare is $363 round-trip ... Now last year the same trip cost on average $321, that's 13 percent higher than last year. And to fly from Los Angeles to Dallas, Fort Worth airport, the current average is $391 round-trip. Last year that same trip cost on average $341, that's 15 percent higher than last year. Do you see any signs of airfare prices changing direction?
Amy Ziff, the editor-at-large of Travelocity, qualified Chen's numbers by saying those figure only tracked Thanksgiving specific airfare and opposed Chen's assumption that airfares were unusually high:
'Early Show' guest informs host that priced dropped last three weeks.
Sometimes former CEOs have a reason to be downbeat when they make predictions.
Former Chairman and CEO of Citigroup Sanford Weill told CBS's "The Early Show" Oct. 28 that unemployment would hit 9 percent and that Wall Street CEOs "didn't deserve bonuses this year." It went something like this:
Well, I think we've set in motion a whole series of events that is going to make the economy really, really bad over the short term. I think we are going to see the biggest drop that we've seen in GDP. I think we are going to see unemployment go up to about 9 percent.
Weill said that a year from now things would be a lot better, but still was critical of the Federal Reserve for not acting sooner: