Auto Industry’s Efforts Too Little, Too Late

Channel: Fox Business
Date: 3/31/2009


Male News Anchor: I want to bring in Republican Congressman Ron Paul of Texas, who we all know is a critic of this government intervention. Congressman, what was your reaction on Sunday night – we haven’t talked to you since then – when you heard the news that the Obama administration was firing Rick Wagner.

Ron Paul: Well, I wasn’t a bit surprised. I thought that would be the predictable consequence once we started getting involved and financing these companies and bailing them out, the natural consequence would be that the politicians and the bureaucrats would become the so called owners and start talking about bonuses and who should do this and who should do that. That was the great danger of the initial bailout. We should have never done this, and quite frankly, we shouldn’t be surprised and all it does is delay the inevitable. It delays the restructuring that is necessary. So the sooner the government gets out of the way the better.

Female News Anchor: Well, you know Congressman, the American taxpayer does have bailout fatigue. You know that, we all know that right now. Just open up the front page of any news paper. But at the same time, the argument has always been that it would be the peripheral industries, the suppliers, steel makers, things like that, that were going to suffer under a bankruptcy of GM or Chrysler. So what do you say to those folks to that industry or to those Americans that will lose their job?

Ron Paul: Well, they are still going to, it’s just that the correction won’t come for ten of fifteen years rather than one or two. In the constitution there are provisions that allow the Federal government to be involved in bankruptcies. We write the laws on bankruptcies, and now we’re ignoring it, we’re delaying it. There’s no authority in the constitution for us to print money or appropriate funds, take money from innocent people and give it to people that got themselves into trouble. So, the sooner they go into bankruptcy the better.

That’s the proper procedure. If these companies would have declared bankruptcy a year ago, the good assets would have been bought up and I wouldn’t be so hesitant in buying a new car which I need. But now, I don’t know what the car companies are going to do.

Female News Anchor: Mayor Lidson, you’re still there. Go ahead and respond to Congressman, sir.

Mayor Lidson: Listen, listen to just what he just said. The difference … if the companies declare bankruptcy now all this unemployment happens. All these people are put out of work. The economy is put into a depression. Or, he says, it happens…. Ron Paul says it happens over fifteen years. Over fifteen years a lot can change. And these big three companies out of Detroit have been changing rapidly. So this gives them the opportunity to further make those necessary changes and become competitive. So I think he is right about the cataclysmic affect of what would happen if the government didn’t intervene. I think he is wrong about fifteen years of malaise, because I think what we see here are dynamic companies that are making changes. If you can’t see the changes that General Motors, Ford and Chrysler are making right now, today… if you can’t see this transition then you got to be blind. These companies are becoming leaner and greener and they have a real chance to make the leaner and greener cars of the future in the United States for export to the world. That’s what we’re talking about. We’re talking about the future of the domestic auto industry, and a key part of our economy that can be preserved over time with a more structured approach with government intervention.

Female News Anchor: Congressman, you’ve got fifteen seconds. Is the free market system gone?

Ron Paul: Too little, too late.

Female News Anchor: Too little, too late. Alright, that’s very good. That’s your response, alright. We’re going to leave it there then.

Ron Paul: We need the marketplace, we need to believe in freedom and a free market system.

Female News Anchor: Free market system? Well, we had one at some points around the world.

Mayor Lidson: What free market? What free market? There is no free market.

Ron Paul: You came crawling to the government, that’s not free markets.

Mayor Lidson: Please, please. Wall Street and Washington did it long before I got here.

Ron Paul: Well, they do. And that’s why I condemn the Federal Reserve. You’re right about that, the Federal Reserve Private System is the cause of the problem.

Female News Anchor: Gentlemen, thank you so much. We’re going to have to leave it there and cut and go to a commercial. Thanks guy, I appreciate it.