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Lou Dobbs Tonight
Obama in London; Saving Detroit; Senator Stevens' Reversal; Property tax Protests; Union Power Grab
Aired April 01, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Good evening.
Violent protests in the streets of London on the president's first full day in Britain for the G-20 summit meeting, but thousands of demonstrators protesting in favor of anarchy, a one world new order and against national sovereignty and capitalism, protests as well in the United States, in fact, a wave of anti-tax protests all across the country.
State and local governments raising property taxes and increasingly citizens are protesting those higher taxes as unemployment rises and the economy contracts and central to our efforts to resolve this financial crisis, federal government intervention in the private economy, this week, a dramatic intervention in the automobile industry. Here tonight we have an exclusive interview with the new CEO of General Motors. I'll be talking with Fritz Henderson as he faces a new government deadline to save what was once this country's greatest corporation.
And Michigan's governor, Jennifer Granholm, also joins me here. We'll be discussing not only the future of Detroit, but the entire economy, the state of Michigan. And at the center of the federal government intervention, the man who chairs the House Financial Services Committee, Congressman Barney Frank. He'll be here to explain why there is so little accountability and oversight of the bailout.
We begin in London where President Obama today said he will listen, not lecture at tomorrow's G-20 summit, but French President Sarkozy and German Chancellor Merkel (ph) will not be listening to President Obama's calls for more stimulus spending and they may well be lecturing the president on their demands for strict new regulations of global final markets. At the same time, thousands of anarchists, anti-war campaigners and environmentalists staged noisy and even violent protests across central London.
Protesters trying to break through police lines outside the Bank of England, but police officers held them at bay. Some anarchists breaking into a Royal Bank of Scotland building. They climbed inside before police could clear the area. Some police and some protesters injured in the demonstrations and there are reports tonight that one protester collapsed and died. Police are not yet saying what the cause of death was. Ed Henry has our report on the president's first full day in London.
(BEGIN VIDEOTAPE) ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president and first lady's real debut on the world stage came at 10 Downing Street, the official residence of British Prime Minister Gordon Brown. Later, they rubbed elbows at Buckingham Palace for an audience with the queen.
UNIDENTIFIED FEMALE: It's always the same thing, isn't it?
HENRY: In between, Mr. Obama got down to business on the financial crisis, trying to defuse tension with France and Germany over how much stimulus should be pumped into the world economy and how broad new regulation of the markets should be.
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: History shows us that when nations fail to cooperate, when they turn away from one another, when they turn inward, the price for our people only grows. That's how the great depression deepened. That's a mistake that we cannot afford to repeat.
HENRY: With the streets of London filling with protesters, angry at the G-20 leaders on a series of issues, the president and Mr. Brown urged their colleagues to come together with a sense of urgency for dramatic action.
OBAMA: We've passed through an era of profound irresponsibility. Now we cannot afford half-measures.
GORDON BROWN, BRITISH PRIME MINISTER: This summit cannot simply agree to the lowest common denominator. We must stand united in our determination to do whatever is necessary.
HENRY: And the president declared, despite the U.S. facing blame for the crisis and questions about its leadership abroad, America will rise to the occasion.
OBAMA: I came here to put forward our ideas, but I also came here to listen and not to lecture, having said that, we must not miss an opportunity to lead.
HENRY (on camera): What the president is really saying when he stresses his willingness to listen and not lecture is that he's trying to turn the page on the Bush years. But that new approach is not necessarily working with some European allies.
Ed Henry, CNN, London.
(END VIDEOTAPE)
DOBBS: President Obama today meeting in London with communist Chinese President Hu Jintao (ph) and declaring that the U.S. relationship with China has become what he called extremely constructive. President Obama also said U.S./Chinese economic relationships are very strong. It seems the president is paying no attention to a huge trade deficit with China and Beijing's holdings of more than $1 trillion of U.S. treasuries and other assets. The president also apparently forgetting that China's building new kill weapons to destroy our aircraft carriers and ignoring China's huge ghost network of hackers spying on our computers and those of 102 other nations. The president today did his bet to play down policy difference with other G-20 leaders as well, despite the latest French and German criticism of U.S. policy.
At a news conference with British Prime Minister Gordon Brown, the president said, quote, "I think the separation between the various parties involved has been vastly overstated." For his part, Prime Minister Brown optimistically at one point declared G-20 leaders are within hours of agreeing on a plan for economic recovery.
Well, it's been more than 12 hours since he made his declaration. There is no suggestion of any kind of agreement on any kind of plan. New evidence today of the impact of the global economic crisis on car sales, Ford, the only U.S. carmaker not receiving government bailout money, today reporting a 41 percent decline in its sales last month. Chrysler, which the government is forcing into a merger with Fiat, saying its sales fell by 39 percent, while General Motors, once the world's biggest carmaker, reported a sales decline of 45 percent.
At that, all those sales figures beating Wall Street expectations. Japanese car companies also reporting their U.S. sales down by more than a third, but there is a glimmer of hope for the carmakers. Their sales were higher in March than in January and February.
Joining me now here on the broadcast, the new CEO of General Motors, Fritz Henderson who replaced Rick Wagoner, who was removed from his post by the president last week. Well, first, good to have you with us here on the broadcast. You -- I can't think of a CEO, fritz, who has ever faced a more daunting task within days of having assumed a post. Can you?
UNIDENTIFIED MALE: We lost him.
DOBBS: We apparently lost our audio to Mr. Henderson...
(CROSSTALK)
DOBBS: Can you hear me now?
FRITZ HENDERSON, CEO, GENERAL MOTORS: I hear you now, Lou.
DOBBS: Fritz Henderson...
HENDERSON: I can hear you now, Lou.
DOBBS: Well first, let me say welcome. I apologize for the technical problems there. But my question is within just days -- I guess, really hours of taking your new responsibilities on, I couldn't think of a CEO who's ever faced such daunting challenges as you upon just stepping into the post.
HENDERSON: First, Lou, good evening. It's good to be here with you. The challenges are immense. But, you know, let's bring it on. The way I look at the situation, we have been, within General Motors, dealing with a series of tough challenges for a number of years. Obviously, the situation today is one of -- there's plenty of business challenges here, certainly in our home market, but on a global basis, so yes, the challenges are there.
We have -- we have a good team of people. We have great dealers. We have very loyal customers who are standing behind us and want us to get the job done. So we need to get the job done, Lou. It's that simple.
DOBBS: You have great, great brands at General Motors. Yet there is a marketplace that is seemingly constricting by the month. You say yourself that more plant closings are likely, that bankruptcy becomes an increasing -- increasing likelihood with the intransigence of both creditors and the United Autoworkers Union. Where would you say you are right now?
HENDERSON: Lou, we have 60 days, as was discussed earlier this week, to accomplish frankly deeper, faster restructuring the business, both on the operating side of the business, as well as the capital structure. At this point, I wouldn't use the term intransigence with either the UAW or the bond holders. I think it's painful.
We have to make sacrifices everywhere in the business from leadership to our people to our dealers to bond holders and other constituencies that have a role to play in General Motors. So we have time in front of us, a short period of time, in order to try to get this accomplished outside of a bankruptcy. That's our preference. But if we have to do it within a bankruptcy, that's exactly what we'll do because in the end we got to get the job done. We got to get General Motors restructured so that we can be part of the automotive industry going forward for the next 100 years of our existence.
DOBBS: Fritz, the idea of a bankruptcy employed by the airlines seemingly on a regular basis for a decade, what is the downside to that at this point for General Motors in your view, and to what degree is it a benefit?
HENDERSON: Lou, I'd say a couple things. First, bankruptcy has not been our preferred approach. We've been clear on that. We remain clear on that because bankruptcy brings with it both time, risk, costs and most importantly for our business, the consumer. We sell cars and trucks one at a time. And we have quite good competition. I guess -- I'd say a couple things.
So we know what the risks are. I think the key though is that we need to get the job done in terms of getting our business restructured. We've got a lot of operational challenges, a lot of challenges on the balance sheet and so the conclusion today is we need to get the job done outside or if we have to go inside -- inside (INAUDIBLE) in a bankruptcy process, we need to move fast.
That's not normally done in a bankruptcy. I think a couple of things that occurred this week that were very important for us. First, I mean the president basically saying that the warranties for GM cars and trucks both service as well as warranty that customers don't need to worry, that the (INAUDIBLE) believes we can be viable...
DOBBS: Did you ever...
HENDERSON: ... and prepared to frankly stand by us. I mean there are a lot of positive things in that.
DOBBS: Fritz, did you ever think you would have the president of the United States standing in -- basically giving you a warranty commercial, General Motors? That's pretty powerful stuff, isn't it?
HENDERSON: Lou, I watched the president's speech. It was unprecedented. Spent a half an hour -- the tasks force has been intimately involved in our business for the last six or seven weeks, but to have the president of the United States make those sorts of comments and frankly indicate what needs to get done in his judgment but also what the government's prepared to do is remarkable.
DOBBS: And is -- amongst the things the government is prepared to do reports tonight that you will be getting more money in the next 60 days up to the May 1st deadline. Can you share with us how much money you're looking for, for that period?
HENDERSON: Actually, Lou, June 1st deadline so we have 60 days.
DOBBS: I'm sorry, June 1st.
HENDERSON: A couple of things -- no problem. We had originally requested, by the way, a $2 billion draw in the month of March through, frankly, aggressive implementation of our plans. We have pushed that draw forward. We didn't need it in the month of March. And what we're trying to do is everything in our power to reduce costs, to implement our plan quickly so that we minimize whatever the funding is as we -- as we get through the 60-day period.
At this point, I can't give you a specific forecast as to what might be necessary. We identified, for example, two billion in March, another 2.6 billion in April, but again, we didn't take the two billion in March and we're going to do whatever we can to minimize the amount that's necessary as we work through the restructuring process.
DOBBS: This has been a bloody period for the workers at General Motors, your employees, for everyone associated. And this period, I'm referring back to 2000 forward. To talk -- the CEOs with whom I've spoken, not a one in any industry can offer me a sense of what we used to call visibility.
Do you have any instinct, any remotely clear insight into what the future of General Motors is, how quickly you can turn a corner, actually begin to talk about rising sales and perhaps profitability?
HENDERSON: Well, I'd say a couple of things. First, Lou, let me talk about the restructuring process. What do we have to go through? Lowering break-even points, reducing costs, making sure we streamline how we go to market with brands, distribution systems. It's all about, frankly, creating a leaner, tougher, more resilient General Motors. Second, restructuring the balance sheet because the level of indebtedness we have, whether it's bond debt or whether it's obligations for pension and health care needs to be restructured. We need to significantly reduce the level of indebtedness. Once we do those two things the interesting thing about this business, Lou is when things are bad, they can be really bad really fast. That's the way it works.
On the other hand, and I've seen this when I worked in Brazil, when I worked in Latin America, when I worked in many other countries around the world, when things turn, they turn fast as well. And so it can be a wonderful business when it's on the upside particularly when you get your business properly structured. Our problem is, you know, getting the operations structured, but also the capital structured. We just had too much indebtedness.
We needed to deal with it, so I would say in terms of primary demand, the consumer, there's a lot of things that can and must be done to bring the consumer back in the game. But I do know this, we're selling well below scrappage rates in the U.S. We're selling well below what we should be selling at in any sort of normal environment. We need to bring the consumer back in the game.
We need to improve consumer confidence. We need to get credit restored. That's going to happen overtime. Things are going to get better. We need to pull together and make sure we're part of that.
DOBBS: All right. Fritz Henderson, thank you very much -- a man with -- well enough challenges to satisfy anyone. We wish you the best (INAUDIBLE). Fritz Henderson, the CEO of GM.
HENDERSON: Thank you.
DOBBS: Much more on the crisis facing the entire automobile industry here later. I'll be joined by Governor Jennifer Granholm (ph) next.
Also ahead, the growing civil unrest all across this country, seething anger by taxpayers and citizens first over those property tax increases.
And an abrupt reversal in the corruption case against former Senator Ted Stevens of Alaska. We'll be telling you all about that and why it all happened to begin with. Stay with us.
(COMMERCIAL BREAK)
DOBBS: A stunning turnaround tonight in the corruption case against Senator Ted Stevens, the U.S. Justice Department asking a federal court to toss out the senator's conviction. Misconduct by its own prosecutors leading the Justice Department to seek that reversal, Stevens, the nation's longest-serving senator -- Jeanne Meserve with our report.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: It's nice to see you. I'll have comments later.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): A 40-year veteran of the U.S. Senate, Ted Stevens, convicted last October for failing to list $250,000 in gifts and renovations to his Alaska home on financial disclosure forms. Now the Justice Department, which prosecuted the case against Stevens, has pivoted and dropped all charges because of prosecutorial missteps by its own lawyers. Stevens' attorney says prosecutors violated the Constitution to obtain an unlawful verdict.
BRENDAN SULLIVAN, STEVENS' ATTORNEY: We were sickened by it. Because it clearly told the story of government corruption as they were hell-bent on convicting a United States senator.
MESERVE: During the case, Judge Emmett Sullivan (ph) repeatedly scolded government lawyers for failing to hand over key evidence to the defense, finally finding them in contempt. The Justice Department eventually removed them from the case, but the damage had been done. The prosecutors' conduct was so problematic Attorney General Eric Holder determined "it is in the interest of justice to dismiss the indictment and not proceed with a new trial."
RICHARD SMITH, FORMER FEDERAL PROSECUTOR: What Mr. Holder did today is to send a clear signal to prosecutors in this country that prosecutorial misconduct would not be condoned.
MESERVE: Wednesday, Stevens said, "it is unfortunate that an election was affected by proceedings now recognized as unfair." And he echoed his final good-bye to the Senate.
SEN. TED STEVENS (R), ALASKA: I look only forward and I still see the day when I can remove the cloud that currently surrounds me.
MESERVE (on camera): There will be a final hearing April 7th. Meanwhile, the Justice Department's Office of Professional Responsibility will review the conduct of the prosecutors. They could face penalties from a reprimand to a recommendation for dismissal.
Jeanne Meserve, CNN, Washington.
(END VIDEOTAPE)
DOBBS: The senator's conviction coming just a week before the November election, and it was a close race, Democrat Mark Begich (ph) beating Senator Stevens by a slight margin, 3,900 votes separating the two. Not enough, however, to -- excuse me -- enough to trigger an automatic recount and obviously with the prosecution now reverse, it would -- could have led to a quite different result.
Well Democrats are predicting a win in New York's 20th special election tonight. Republicans are saying not so. Democrat Scott Murphy running against Jim Tedisco of the Assembly to replace Kristin Gillibrand (ph) who took Hillary Clinton's Senate seat. Murphy currently has a 65-vote lead. Nearly 6,000 absentee ballots, however, remain to be counted. The race heavily funded by both parties and the outcome, analysts say, will indicate support or distrust of the Obama administration. Republicans claiming Democrat Murphy would have won by a landslide in November but now is threatened in this election by the increasingly unpopular economic policies of the president. We're expecting final results in just about two weeks.
Straight ahead here new developments in the battle over executive bonuses, the House of Representatives tonight moving forward to give Treasury Secretary Geithner even more power and homeowners remain on the brink, their property taxes rising, property values plunging as the economy contracts. But tonight homeowners are fighting back. That story is next.
(COMMERCIAL BREAK)
DOBBS: Homeowners all across the country are seeing their property taxes rise while local governments are scrambling to cover their budget deficits. Meanwhile, property values are dropping and tonight outraged homeowners are launching protests. Kitty Pilgrim has our report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In Iowa, a public tax hearing turned into chaos as citizens were thrown out of the House Chamber for disrupting the proceedings. Eyewitnesses say the booing and shouting went on for 10 minutes. According to public watchdog group Iowans for Tax Relief, changes in the state government budget will result in more than $100 million more in property taxes at the local level. Across the country, many local governments overspent in boom times.
JOSH BARRO, TAX FOUNDATION: Now those municipalities are finding that higher taxes are necessary to catch up with the high spending that they already put in place.
PILGRIM: In Hoboken, New Jersey, a massive property tax hike prompted one realtor to put up this sign, urging residents to cut their taxes by 47 percent by moving out of the area. In Montgomery County, Ohio, thousands of property owners lined up to meet the deadline to challenge property tax hikes on their homes, on average, up 14 percent. The value of the homes in the county was reassessed in January 2008. But since then, the property values in Ohio have fallen by 13 percent, according to RealtyTrac.
KARL KEITH, MONTGOMERY COUNTY AUDITOR: Values that were -- that were probably good values in January of '08 are now somewhat below -- below that and so people are coming in and filing complaints.
JOHN PAINE, CENTERVILLE, OHIO: I'm disappointed that they wouldn't use more common sense in how they evaluated properties.
PILGRIM: It's now up to the Montgomery County Board of Revision, all three of them, to review the complaints.
(on camera): The real question is why taxes would go up when home prices are falling. Nationally, home prices are down 19 percent.
Kitty Pilgrim, CNN, New York.
(END VIDEOTAPE)
DOBBS: Bringing us to the subject of our poll -- the question, would you prefer state governments cut deficits by raising taxes or cutting services? Cast your vote at loudobbs.com. We'll have the results here later.
The president appears to have broken a campaign pledge not to raise taxes on our middle class. During the campaign candidate Obama said, quote, "no family making less than $250,000 a year will see any form of tax increase, not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
Today, the biggest federal tax hike on tobacco products taking effect. The biggest hit is on cigarettes, an increase of 62 cents a pack. Smokers are now paying up to $3.76 in taxes on a single pack of cigarettes.
Let's take a look at some of your thoughts now -- many of you writing in about our report last night on government officials in this new administration enhancing politically correct language. For example, Homeland Security Secretary Janet Napolitano wants to call terrorist attacks man-caused disasters.
Sharron in Oklahoma wrote in to say: "In keeping with the new wave of political correctness, what I am hearing out of Washington is a pile of bovine-malodorous-emission" -- quite a mouthful.
Jeff in Oklahoma: "I thought you might like to know that in honor of our new president, we no longer use the term assault rife. From now on, the term sport utility rifle will be used."
And Ronnie in Texas said: "I'm going to call what's going on in Washington, D.C. a manmade disaster and terrorist attacks terrorism. I don't care what the hell they say."
We love hearing from you. Send us your thoughts to loudobbs.com. And a reminder to join me on the radio Monday though Fridays for "The Lou Dobbs Show", 2:00 to 4:00 p.m. each afternoon on WOR 710 Radio in New York and go to loudobbsradio.com to get your local listings for the show in your area.
Up next, lawmakers moving ahead with plans to give Treasury Secretary Geithner even more control. Top Congressman Barney Frank joins me and we'll tell you how our government is becoming a tool of organized labor. That story and more still ahead.
(COMMERCIAL BREAK)
ANNOUNDER: This is LOU DOBBS TONIGHT; news, debate and opinion. Here again, America's most powerful independent voice, Lou Dobbs.
DOBBS: The SEIU, the Service Employees Union, the country's most powerful and richest union is using its clout with elected officials across the country to boost its membership. As Ines Ferre now reports, the same union that was one of the president's biggest supporters is now demanding a big return on its investment.
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): One of America's most powerful labor unions says that if the Treasury can force GM's Rick Wagoner out, it should also fire Bank of America's Ken Lewis, the Service Employees International Union is calling for real reform to take hold at Bank of America and says that in some states the bank's employees depend on public health care because they don't earn enough money. Its critics believe the SEIU's underlying motive is to unionize bank tellers with the help of the government.
MARK MIX, NATIONAL RIGHT TO WORK: If you can get the bully, if you can get the biggest one and knock him down, then the littler ones tend to fall in line a little bit easier.
FERRE: Union membership in the private sector declined from 35 percent in the '50s to 7.5 percent today. To try to regain a foothold, unions have become generous donors to political campaigns. In 2002, Rod Blagojevich received SEIU support during his gubernatorial race and $820,000. As governor, he signed an executive order making as many as 20,000 home health care workers eligible for collective bargaining. Two years later, he signed another order allowing state child care workers the right to join a union. Increasing SEIU's membership by 49,000.
DAVID DENHOLM, PUBLIC SERVICE RESEARCH FOUNDATION: A lot of union growth, by the way, in the last, oh, four, five years, has come not because they organized the employees but because they organized the state legislature just to hand them to them.
FERRE: Labor unions contributed more than $74 million to candidate's campaigns last year. SEIU's political action committee spent at least $26 million on then Senator Obama's campaign.
Several months ago, CNN obtained SEIU e-mails about organizing bank tellers. One of them saying the time was ripe, given the billions of taxpayer dollars being injected into the banking system.
Ines Ferre, CNN, New York.
(END VIDEO CLIP)
DOBBS: Tonight in Washington, the House of Representatives passing the so-called Pay for Performance Bill mostly along party lines. The bill is a response to the raging battle over bonuses and compensation in those companies and banks that received federal money. The bill imposes new rules and limits on executive bonuses of companies receiving T.A.R.P. funds. By the way, gives treasury secretary Timothy Geithner the power to decide reasonable compensation at all levels of any company. Congressman Barney Frank, the chairman of the House Financial Services Committee, joins us here tonight. Good to have you with us. REP. BARNEY FRANK, (D-MA) CHAIRMAN, HOUSE FINANCIAL SERVICES COMMITTEE: Thank you.
DOBBS: This legislation has had a lot of people start scratching their heads. Some of the same people by the way who are complaining about the fact that you all had not put any conditions on T.A.R.P. money you are now more than a little concerned that you're going to give the treasury secretary the power to overreach. What's your reaction?
FRANK: Well that it's typical of the people who are determined to say we're wrong no matter what we do. First, I would make one correction, Lou. It's not the secretary treasury that was in the original bill. People raised the question about expertise. So is the secretary of the treasury subject to the approval of the major bank regulators, the head of the credit union administration. As a matter of fact, three of the five will be Bush administration appointees so there's some balance there.
DOBBS: Now I feel better.
FRANK: The fact is -- secretary of the treasury. I understand, you say one thing and that's just not accurate --
DOBBS: Well, wait a minute, Congressman, don't be a snit. I simply said I feel better about it being three members of the Bush administration.
FRANK: No, and you were being sarcastic about that.
DOBBS: I was being sarcastic about that.
FRANK: Yes, you are. What I'm saying is it's a typical --
DOBBS: Let me ask you this Congressman --
FRANK: Lou, can I finish a sentence?
DOBBS: You certainly may, because you're off on such a good start, I wouldn't impede you.
FRANK: The point is, it's not just the secretary of the treasury. You made that point as if it was a criticism of too much power for one man. I believe that that was a dimwit point and we amended it to include a number of people so that we get some balance.
Secondly it does respond directly to the outrage that we had heard about the fact that when the recovery bill was passed, an amendment was added to the language that Senator Dodd put. Senator Dodd in my judgment deserves credit for pushing the whole area. He didn't get everything he wanted. We undid the part that said it couldn't be retroactive. Whether or not that holds up legally, the courts will determine. But there was a great deal of anger that this amendment had been put in there.
People should have a chance to vote on whether they want to take it out or not.
DOBBS: A chance to vote on it? They've also had a -- you know, I mean, Congressman, I have to say, I'm sort of stunned. You're saying that you're putting legislation through because people are angry, not because it has an effect that's desirable on the economy or the institutions --
FRANK: No, no, they're both. You of all people should not think that people being angry and something being appropriate are mutually exclusive, Lou.
DOBBS: I didn't say they were mutually exclusive.
FRANK: Well with, that's --
DOBBS: I'm quoting you saying that was the reason that you did it.
FRANK: No, I said that was part of it --
DOBBS: Part of it? What's the other part?
FRANK: Lou, Lou, look, I'm sorry but it's been a long day. If we can have complete sentences from each other, that would be useful.
DOBBS: I'm waiting.
FRANK: The fact is -- good. The fact is that I think this is a case where the public anger was justified, that the assumption of public policy is correct. So it's not only done because of public anger, but that is a legitimate factor. There were complaints not just -- and it's not just anger. There was an argument that it was procedurally inappropriate for there to have been a substantive change made in the recovery bill without people having had a chance to vote for it one way or the other.
I do think that's a legitimate argument for reversing that and having opened this. Then given the fact there's going to be a vote whether they are for it or not. I found it hypocritical, the Republicans who complained that this was put in there and said it was terrible who then voted to keep it there, but members were free to vote either way.
DOBBS: Well, Congressman, I mean, when you say -- start this partisan stuff, I mean, if you believe that you and Senator Dodd have showered yourselves with glory on the oversight of the financial institutions of this country, you know, I'm stunned by that. I accept your criticism of the Republicans. But I don't understand what you're saying about your own roles.
FRANK: Well I will tell you what I say about my own role. That we in fact done good over site. I didn't say I showered myself with glory. I have said this, when the Republican administration came to us in the fall and said we had to have it we resisted the speed with which they wanted and we were able to get some oversight in there, not as much as we liked. But we did have the inspector general who has made good reports. We had the GAO. By the way, we've also begun to get some money back, $29 million paid in dividends already. We also pressed for restrictions on compensation and restrictions on the excessive and lavish entertainment. We have been sufficiently successful in that, in cooperation with the Obama administration. A number of recipients are now complaining that it's too tough.
So in response to that in the recovery bill, I did find some language that said, if it's too tough, give the money back. Because it was originally hard for them to do that so we have made it possible for them to give their money back. I'm encouraging any of them who think we're being too tough to do it. But I would say the fact that they have begun to say now we are going to give the money back, is an indication that we have finally been able in cooperation with the Obama administration to put some real oversight over them.
DOBBS: If you would, listen to what AIG CEO Edward Liddy had to say as he defended the bonus payments that he made, which by the way were made possible through Senator Dodd's oversight? If you would listen to Mr. Liddy.
(BEGIN VIDEO CLIP)
EDWARD LIDDY, AMERICAN INTERNATIONAL GROUP CEO: The Americans are asking quite simply why pay these people anything at all. Here's why. I'm trying desperately to prevent an uncontrolled collapse of that business. This is the only way to improve AIG's ability to pay taxpayers back quickly and completely. And the only way to avoid a systemic shock to the economy that the U.S. government helps was meant to relieve.
(END VIDEO CLIP)
DOBBS: The house -- I'm sorry.
FRANK: Do you want me to comment or should I wait?
DOBBS: Please.
FRANK: First, it's wrong to say Senator Dodd's amendment or his language allowed them to happen. The bonuses happened after the Federal Reserve without Congressional input agreed to give the money last September. This is not like the one we voted on. They just did it. The bonuses were paid then. What Senator Dodd did was try to restrict this. He was not able to get everything he wanted and so the treasury under the Obama administration did succeed in getting a restriction, making it retroactive.
But if Senator Dodd did nothing they would have been paid. But what we have now said is, OK, the point you make, Senator Dodd made it possible. The language change that said they couldn't be done retroactively is what we tried to change today. So again if people are critical of what happened in the Senate in that regard or in the recovery bill, we have undone it. Secondly, I disagree with Mr. Liddy's statement. He said, people have said why pay them anything. I don't expect people to work for nothing. I expect good people to work for significant increases. What we say in the bill today is there should be bonuses that are performance-based. I do object to extortion in bonuses. I object to people saying, we know the secrets and if you don't pay us a lot more money just to stay here, we're going to quit, especially when someone did quit a few months later. We specifically say no, of course people shouldn't work for nothing. They should work for good salaries and they should be performance-based.
DOBBS: And set by as reasonable or not excessive by whom?
FRANK: The control of the currency, the FDIC and the secretary treasury. When you said before that we haven't done good oversight, but I don't know what you meant by that. We did oversight in saying you shall not -- this only applies to people who are getting a capital infusion from the Federal government while they have it. If they think these things are a problem, they can pay the money back and have no further restriction.
DOBBS: Let me be clear then as we wrap up here. The reason I said that the oversight had been lamentable is for a couple of reasons. First, there was no conditions precedent in the bailout money itself as passed by the Congress.
FRANK: Not true.
DOBBS: Back in -- well, excuse me, I'm going to give you my version of the truth because you insisted we speak complete sentences without interruption so I'm sure you'll reciprocate the courtesy.
FRANK: You're right. I will.
DOBBS: In point of fact, the Democratic led Congress along with the Bush presidency pushed through the bailout which did not have sufficient conditions precedent to the bailout money that addressed the issues of compensation, nor did it have any of the necessary oversight, including by your own committee, established, and your own chairman of the oversight panel that you have put in place, Professor Elizabeth Warren, said she's not getting sufficient cooperation to carry out her job.
FRANK: May I respond?
DOBBS: Those are the statements.
FRANK: May I respond?
DOBBS: If you can do it in like 2 seconds please --
FRANK: Oh, you're going to make that accusation and give me only 2 seconds to respond? That's just totally unfair, Lou, you have misstated --
DOBBS: You are sir an absolute exempt particular of absolute nonpartisan objectivity.
FRANK: May I finish?
DOBBS: Go ahead, please.
FRANK: You engage in that hyperbole. There is a real difference between the Democrats and Republicans here.
DOBBS: Oh, my --
FRANK: Come on, Lou.
DOBBS: Congressman Frank, you are far better than that.
FRANK: Are we going to have a rational conversation or not?
DOBBS: I'm perfectly willing to end it, but you go right ahead.
FRANK: You made a bunch of accusations and you want to shut me off.
DOBBS: OK.
FRANK: We did put oversight in there in advance, including the creation of the Elizabeth Warren panel. Which the Republicans debate having appointed, including a special inspector general, including big powers of the GAO, and the other thing is, you say you don't want the secretary of the treasury to have power. We wanted to restrict compensation. You cannot write a number in there because these things have to change and be flexible.
So yes, we did write in restrictions in advance on restricting compensation. They were not well used under the Bush administration. They've been better used under the Obama administration. But there were conditions present there and elsewhere.
DOBBS: Congressman Barney Frank. Thank you, sir.
Up next, dismal new automobile industry numbers. Michigan's governor joins me next. She says her states disaster worse than that of hurricane Katrina in terms of its impact on unemployment and she joins us here next.
(COMMERCIAL BREAK)
DOBBS: Well, we're back. And U.S. car sales, we have to report, plunged again in March for the workers and the families and the citizens of Michigan, it's just more bad news. Michigan's governor General Granholm has called the automobile job industry losses, quote, our Katrina. When hurricane Katrina hit New Orleans back in 2005, it was devastating of course to the area.
More than 127,000 jobs were lost there in the year that followed the hurricane. Many of those jobs did come back. But employment still below pre-Katrina levels. In sheer numbers, Michigan's situation is even worse. According to the governors office the state has lost 600,000 manufacturing jobs, just since 2001. The unemployment rate in Michigan stands at 12 percent; it is the highest in the nation. Governor Granholm joins me now. Governor Granholm good to have you with us.
GOV. JENNIFER GRANHOLM, (D) MICHIGAN: Thank you, Lou.
DOBBS: We just talked with Fritz Henderson, the new CEO of General Motors. When I asked him if he could see a way to -- a point at which sales are going to be moving higher, when General Motors will be returning to profitability, he was -- you know, he was -- was unable to answer. What is your sense of when there will be a turning point for your state and for Detroit in particular?
GRANHOLM: Well, I think obviously it depends on the national economy. We are clearly -- we've got 12 times more automotive employment than any other state. We've been really focused on diversifying our economy and saving those great automotive jobs. But so much of this is going to depend on what happens in the next 30 and 60 days for Chrysler and General Motors.
Obviously the numbers for today on auto sales were terrible. But they were terrible across the board. It wasn't just the U.S. auto industry. In the end, for us, it's going to be about when will consumers start to buy? Again, what will it take to increase demand? It's one of the reasons why I'm very supportive of what is known as the Cash for Clunkers Bill, where people will get a voucher for an amount of money that would allow them to buy a new vehicle if they turn in one that's, say, nine years or older. That would stimulate automotive sales. We'll want to encourage people to buy American. But ultimately this is about people buying cars again.
DOBBS: It's about people buying cars again. As I said, Fritz Henderson couldn't offer a forecast. What is your forecast? What is your sense of what is happening in car sales? The availability of credit returning to the marketplace? Because all of that, of course, critical to any kind of recovery in the automobile industry and in your state's.
GRANHOM: Yeah, I'm not an economist, Lou, but I certainly read a lot. I think there's a lot of -- I consider myself fairly an amateur economist like so many others who are watching the markets and who are listening to those who know more. You know, you probably have a good sense of that forecast too. Which is that some are saying we'll start to see growth in 2010 but ultimately, growth in the economy, growth in the GDP, doesn't translate necessarily into job growth until the year after or maybe even the year after that.
So that's why in Michigan, because we're so concentrated in the auto industry, we have really developed this aggressive strategic plan to add new sectors to our economy, that build on the strength of the auto industry, but also add new sectors that dove-tail with the rest of our natural strengths, like renewable and alternative energy. Frankly, Ed Montgomery, who is the fellow that the president appointed to be --
DOBBS: The car czar. GRANHOLM: Right. Well, he's actually not a car czar. He's been assigned to be the director of the communities that have been most impacted by automotive losses. Not director of the communities, but director to the White House and to the administration, in making the case for whatever the tools are that the administration has at their disposal to help communities like we have in Michigan to recover. Because ultimately, it's about cars, but it's also about people and communities and how do we make sure we wrap a response around that?
DOBBS: Let me ask you this. Because you're talking about forecasts. As we look at what is happening with the automobile industry, it's pretty clear that Detroit, whether it be a private company like Chrysler, whether it be General Motors or Ford, which has not had to rely on federal assistance to this point, that it is a very uncertain future, both in terms of the size, the scale, and the levels of employment that will return even in a healthy period for our economy. Why is this administration, why is this Democratic Party was not dealing with those two issues.
We are now hearing from Washington, D.C. about two issues that you and I have talked about considerably over the years. One, the outsourcing of American jobs, manufacturing jobs, to heap overseas labor markets. Secondly, free trade policies that are literally devastating our manufacturing base in this country, whether it be the automobile industry or any other. Why is this administration -- why is this Democratic Congress not dealing with those two issues which, I think you would agree -- well, let's find out if you do agree. If they are left simply in the wind, any amount of stimulus will not be sustainable?
GRANHOLM: Yeah, it's a key component of our economic strategy, not just in Michigan, but in this country. If we're going to keep manufacturing jobs in this nation, making sure that you don't end near new trade agreements which allow other countries to put up barriers to our products. And you make sure you enter into trade agreements with level the playing field on many other issues. For example, a lot of countries, as you know are engaged in -- don't enter near new trade agreements which allow other countries to put up barriers to our products. And you make sure you enter into trade agreements with level the playing field on many other issues. For example, a lot of countries, as you know are engaged in manipulation of currency or intellectual property theft where they're our designs are stolen, copy and replicated and sold for pennies on the dollar. Bottom line is other countries protect -- it's not protectionism. I shouldn't even use that word because it causes everybody to flip out. Other countries make sure they stand up for their industries. I'm not saying to put up walls over here. What I'm saying is tear down the walls in other countries and make sure that the playing field is level.
DOBBS: And I thank you very much for being with us, governor. As I've often said here --
GRANHOLM: You bet, Lou .
DOBBS: The governor with the toughest job in the country right now, I believe and doing as well as one could possibly imagine. Thanks very much, Jennifer Granholm.
GRANHOLM: Congressman Barney Frank. Thanks for being easier on me than you were on Barney Frank.
DOBBS: Well - I don't know what his problem was tonight, but I think he's going to have to resolve somewhere else anyway.
(LAUGHTER)
DOBBS: A reminder now to vote in our poll: Would you prefer state governments cut deficits by raising taxes or cutting services? Cast your vote at loudobbs.com. We'll have your results in just a few moments.
Up next, real headlines or April Fools pranks? We'll let you decide. As always, we report, you decide. Catchy thing. We might try that.
(COMMERCIAL BREAK)
DOBBS: President Obama has given Queen Elizabeth a gift, a little more technologically based gift than the DVDs he gave the British Prime Minister Gordon Brown last month, but it is sure to be one of controversy nonetheless. President Obama gave the queen a new iPod. She is believed to already own an iPod, but the gift from the Obama administration is loaded with video footage and photos of her trip to the United States. It also contains a rare songbook signed by American composer Richard Rogers. No word if the iPod includes music by the British group Queen.
Well, on this April Fools Day, here are our three headlines and I'd like you to decide which of these three stories in your estimation is the April Fools joke.
Thirty-thousand rejected students accepted. The University of San Diego sends 30,000 previously rejected student applicants acceptance e-mails -- by mistake.
Miss Universe calls Guantanomo Bay (ph) a relaxing, beautiful place. Miss Universe, Diana Mendoza of Venezuela toured Gauntanomo Bay while entertaining our troops.
And Our final headline: Women locked in car saves self by opening door. A Kissimmee (ph), FL woman locked herself in her car and called 911. The 911 operator after hearing her describe the situation instructed her to manually lift the door lock and open the door. It worked. Which of those stories are an April Fools Day joke? Actually, none of them. They are all true.
Today's poll results, 88 percent of you saying would prefer state governments cut deficits by cutting services rather than raising taxes.
We thank you for being with us tonight. Join us here tomorrow. Thanks for watching.
Good night from New York. "NO BIAS, NO BULL" starts right now.
