BusinessWeek Editor Calls $34 Billion for Autos a 'Rounding Error'
The potential bailout of GM, Ford and Chrysler has been the talk of the news media, so CNN’s “Your $$$$$” brought on three guests with various opinions to discuss the issue Dec. 6.
One of those guests, BusinessWeek’s assistant managing editor Jim Ellis said “yes,” to an auto bailout on the premise that $34 billion wasn’t much compared to the previous bailouts. Never mind that it is taxpayer money.
The potential bailout of GM, Ford and Chrysler has been the talk of the news media, so CNN’s “Your $$$$$” brought on three guests with various opinions to discuss the issue Dec. 6.
One of those guests, BusinessWeek’s assistant managing editor Jim Ellis said “yes,” to an auto bailout on the premise that $34 billion wasn’t much compared to the previous bailouts. Never mind that it is taxpayer money.
“Even though we’re talking about $34 billion, in the world of what we’ve given away over the last couple of months we are talking about a rounding error,” Ellis said. He also cited concern about large potential job losses without an auto industry bailout.
Co-host Christine Romans offered free market advocate Peter Schiff a chance to rebut Ellis, asking “just because we’ve spent an awful lot of money, does it mean that it is right to spend more money?”
Schiff, president of Euro Pacific Capital, said “no” that “two wrongs don’t make a right.” Schiff opposed a bailout of the auto industry as well as the earlier Wall Street bailouts because he said they will cost more than anticipated, damage the economy and cause other companies to fail “so they can stay in business.”
Earlier in the show, co-host Ali Velshi asked Schiff about his (Schiff’s) opinion that the economy “needs” millions of job losses to be set straight. “What does your science and your academia tell you that real people are supposed to do if 5 million people are unemployed?” Velshi asked. “Don’t we have an obligation as a nation, as a modern economy to make sure 5 million people aren’t living in tents?”
Schiff disagreed with Velshi’s remark: “The government can’t create jobs; they’re gonna destroy jobs trying to do it. The government doesn’t have any money – all they have is a printing press.” He also noted that borrowing and spending too much is what caused the problem, and to help the economy we must do the opposite to avoid “digging ourselves into a deeper hole.”
Ellis advocated the creation of a new “bubble” to be popped later on. He encouraged strengthening the credit market so people can borrow and spend even more.
“As bad as we ran into trouble with people borrowing a lot and spending, we’ve got to get people spending again. That is something that I think some people, particularly you know, sort of fiscal conservatives really worry about, but that’s a bubble to come. That’s next year’s fight or the fight after,” Ellis said.
