Diary

Sunday Show Review

FOX News Sunday host Chris Wallace began the Sunday Shows with an interview of Republican Govs. Mark Sanford (SC) and Tim Pawlenty (MN) and Democratic Govs. Ed Rendell (PA) and Jennifer Granholm (PA). Sanford defended his opposition to receiving bailout funds saying the government doesn’t create jobs and the strings attached to the funds earmarked for unemployment cost are unacceptable. The other governors plan to accept the money, Rendell and Granholm both enthusiastically.

Gov. Rendell admitted we may not be able to afford the long-term cost of the stimulus plan, but said he doesn’t mind because his people are suffering. Sanford quickly reminded Rendell that it was similar short-term thinking that caused this mess.

On NBC’s Meet the Press, Louisiana Governor Bobby Jindal and host David Gregory discussed Jindal’s refusal to accept portions of the stimulus money his state is eligible to receive, such as $100 million for unemployment cost, citing the long-term impact of the strings attached to be higher business taxes. Gregory and Jindal moved to a debate over a supply-side, tax-cut-focused plan versus a demand-side plan that emphasizes spending. Jindal points out that job growth and productivity comes from private industry and not government.

Florida Governor Charlie Crist was next on MTP, emphasizing his disagreement with Jindal on the stimulus plan and lauded it as a way to help Florida. Crist was much cooler on Obama’s plan to stem foreclosures, calling it a “good start” but refuses to support the proposal until he gets more details.

CBS’s Face the Nation began with host Bob Schieffer interviewing Housing Secretary Shaun Donovan who described the three parts of the plan to halt foreclosures – lowered mortgage rates via a backstop to Fannie Mae and Freddie Mac, refinancing underwater mortgages, and loan modifications. He said the plan is based on the notion that these mortgage issues need to be worked out prior to bankruptcy.

Schieffer next interviewed Govs. John Corzine (D-NJ), Ted Strickland (D-OH), and Mitch Daniels (R-IN). Daniels refused to take a position on the stimulus plan, saying its not his role to criticize either side. Corzine remarked that the stimulus will make a “big difference” in the economy, and Strickland said he’s happy to receive the stimulus funds. On the auto bailout, Strickland said that even Honda has lobbied for government assistance for their competitors.

California Governor Arnold Schwarzenegger concluded the Sunday Shows with his appearance eon ABC’s This Week. The Governor and host George Stephanopoulos discussed Schwarzenegger’s attempts to be nonpartisan with a push for open primaries, his bipartisan support of the Obama stimulus plan, and his philosophy that it “doesn’t really matter if you’re a Republican or Democrat.”

One item noticeably absent from the discussion was bank nationalization, something clearly on the minds of economists and market participants alike.

GOV. PAWLENTY (R-MN), GOV. SANFORD (R-SC), GOV. GRANHOLM (D-MI), AND GOV. RENDELL (D-PA) ON FNS

FOX News Sunday host Chris Wallace interviewed two Republican governors – Mark Sanford (R-SC) and Tim Pawlenty (R-MN) – and two Democratic governors – Ed Rendell (D-PA) and Jennifer Granholm (D-PA).

Wallace launched into the program by asking Sanford why he doesn’t want the stimulus money when his state has the third highest unemployment rate in the country. Sanford replied that the government doesn’t create jobs and that he opposes the strings attached with the money destined to help ease states’ cost of unemployment.

Granholm, whose state of Michigan has the highest unemployment rate, disagrees, saying the discussion isn’t about philosophical theory but real people who from no fault of their own are laid off.

Though Pawlenty claims to dislike the bill, he’s happy to accept his state’s portion of the stimulus bill, noting that Minnesota is a net subsidizer – for every dollar his state contributes to the Federal Government, they get 72 cents back. He also doesn’t mind the strings attached to the funds for unemployment cost, claiming that Minnesota has already enacted most of the enhancements the government requires to accept the funds.

Rendell has the most to gain from the stimulus bill – $16 billion – the most of any state. Rendell has “no doubt” that the infrastructure dollars create jobs over the short-run, but he admitted uncertainty about the long-term feasibility of the stimulus package. It may not fix the economy over the long-run and the government may not be able to cope with the future higher unemployment cost, but, he declared, “I don’t care. My people are suffering.”

Sanford quickly reminded Rendell that this is the same king of short-term thinking that got us into this mess.

Wallace returned to substantive issues by asking how quickly the governors can put the money to use and how they will safeguard against waste. Rendell, Granham, and Pawlenty all affirmed they can immediately spend, and Rendell and Granham both accepted personal responsibility for ensuring the money is used wisely.

Sanford argued that the money is already being wasted, whether its money for the park service or the upgrade of digital television, and Pawlenty mentioned Hillary Clinton’s recent trip to China and her gratitude for the Chinese purchasing our debt. He then said that the day that the Chinese and sovereign wealth funds stop buying our debt, we’ll have the equivalent of the mortgage crisis in the federal government.

On Obama’s efforts to stem foreclosures, Sanford remarked that it’s a horrible idea. 95% of people are struggling but paying their mortgages and “playing by the rules.” He mentioned three negative effects:

  1. The fact that somebody down the street can get help for their mortgage may encourage others to stop paying.
  2. The danger of judges rewriting contracts
  3. Giving money to Fannie Mae and Freddie Mac who are part of the cause of the problem

Rendell responded that we are giving money to banks who were also part of the problem, but that its necessary to avoid a systemic collapse. Pawlenty suggested the government should simply make lower interest rates available rather than the “scary” notion of the government forcibly rewriting contracts.

The bailout of the auto industry was the next topic, which Granholm rigorously defended as expected, placing the blame of the ailing industry at the feet of consumer confidence and arguing that since every other country is supporting their auto industry, we should too. She then called Sanford an “outlayer” [sic] for his opposition to the bailout, to which Sanford responded by saying he’s more in touch with main street and claiming that there have been no operational changes necessary for the survival of the Big 3.

Granholm took difference, pointing to “enormous” reform efforts, and when Pawlenty said the unions had not cut enough, Granholm claimed unions agreed to a 50% cut in starting wages and said we should enact universal health care, placing the burden of health care on the taxpayers instead of corporations as other countries do.

The group then commented on Obama’s fiscal responsibility summit tomorrow, with Pawlenty saying the market will dislike his plan to raise taxes, Rendell pointing out that the economy grew after Clinton raised taxes, and that getting troops out of Iraq will help cut the deficit. Finally, Sanford noted that the operational deficit is just a fraction of the entitlement deficits.

JINDAL ON MTP

On NBC, Meet the Press host David Gregory spent the morning with Republican Governors Bobby Jindal (Louisiana) and Charlie Crist (Florida) discussing the stimulus bill. Jindal promises to review each new dollar coming to Louisiana from the stimulus package, make sure he understands the conditions and the strings, and determine if its good for Louisiana.

Jindal pledges to reject anything he considers bad for the state, such as almost $100 million in unemployment benefits. This is temporary money requiring permanent changes that would raise taxes on Louisiana businesses, Jindal argued.

Louisiana Senator Mary Landrieau criticized Jindal in Saturday’s New Orleans Times-Picayune, saying he should work to obtain as much funding from Washington as possible, but Jindal responded that the permanent increases in business taxes outweight the short-term benefit from the additional funds. Still, the governor plans to accept funds destined for other purposes, such as roads.

Although framed differently, the discussion moved to supply-side vs. demand-side economics. Round one focused on whether tax cuts are the appropriate strategy since the median income failed to increase following the Bush tax cuts. Jindal pointed out that tax cuts during the administrations of JFK, Reagan, and Bush all created jobs, and that the current spending is debt our children will have to pay, and instead of printing more money, our efforts should be to help the private sector grow.

Round two dealt with the government’s role in creating demand when the private sector doesn’t grow. Gov. Jindal said that we can’t print enough money to move the economy and that tax cuts should be combined with stimulus money in a targeted, effective and bipartisan way. The Louisiana governor emphasized that we escape this mess through private sector growth and supports policies that speed this process (something RedState contributor Francis Cianfrocca has been harping on for some time; see here, here, here, and here).

On the future of the GOP, Jindal says the party was “fired with cause” for defending spending and corruption that should never have been tolerated. Instead, GOP leaders should offer conservative solutions, working with the President when possible, but standing on principle when there is disagreement and proposing alternative solutions.

Jindal concluded by saying he plans to run for re-election as governor in 2011 and would likely serve the full term.

GOV. CRIST ON MTP

Crist disagrees with Jindal on the stimulus plan, supporting Obama and the bill before passage and lauding it as a way to help the state get through the tough economy. He has “looked into the eyes” of people in the unemployment offices who need help (though no word on whether he got a sense of their soul), and the stimulus provides these people with assistance.

Crist denied being an “Obama Republican,” a clear reference to the Reagan Democrats of the 80’s, and said that he’s a Florida Republican willing to take ideas from anybody regardless of party.

On Obama’s plan to stem foreclosures, Crist said it may be a “good start” but that he doesn’t support it until he reviews the details, admitting that it may not halt the slide of housing prices.

When asked who the leader of the party is, Crist said “the people” and that he wasn’t sure if we had had one national leader, but then followed up to say that Obama is the national leader. Crist said the key to power for the GOP is to do what’s right for the people, take a compassionate approach, ensure fiscal discipline, and use common sense.

HOUSING SECRETARY DONOVAN ON FTN

On CBS’s Face the Nation, host Bob Schieffer first interviewed Housing Secretary Shaun Donovan who said the foreclosure plan is designed to make sure the folks who took advantage of others – lenders, speculators, and flippers – are not eligible, and that only owner occupants are.

Donovan described the three parts of the plan:

  1. Mortgage rates: the largest part of plan with up to $200 billion serving as a backstop to Fannie Mae and Freddie Mac to help lower interest rates
  2. Refinance underwater mortgages: Allow folks who play by the rules and make every payment but are underwater b/c of lower housing values to refinance. The loan must be between 80% and 105% Loan-to-Value (LTV)
  3. Loan Modification – $75 billion – directed at people struggling the most

Donovan argued that job losses drive foreclosures and that people are losing homes out of no fault of their own. This argument has been the consistent response among the proponents of the bill on the Sunday Shows (particularly Govs. Granholm and Schwarzenegger) when asked if this plan is unfair to those who pay their mortgages on time. Their response consistently points out that speculators will not benefit but fails to address the moral hazard of rewarding those homeowners who purchased a larger home than they could afford (see: Chicago Tea Party).

Next, Donovan claimed that this plan stops three or four million of the estimated six million foreclosures that would occur without the plan. Furthermore, he emphasized that mortgage issues need to be worked out prior to bankruptcy and that loan modification is one of the best ways to accomplish this.

GOV. CORZINE, GOV. STRICKLAND, GOV. DANIELS ON FTN

Next on FTN were Govs. John Corzine (D-NJ), Ted Strickland (D-OH), and Mitch Daniels (R-IN). Corzine strongly supported the stimulus package, saying it’ll make a “big difference” in the economy. Strickland also emphasized the importance of the bill, saying Ohio needs these resources and is happy Congress and the President is providing them. Daniels too will take the money even though Indiana has a balanced budget and plans to invest it in the “future of the state.”

Strickland supports the auto bailout and says the collapse of one auto company would have a “huge impact,” not only on the Big 3 but on all companies. He mentioned that Honda has lobbied for help for their competitors.

Daniels concluded the discussion by refusing to take a position on the stimulus plan, saying it’s not his role to criticize either side.

Schieffer ended the show by highlighting a dangerous situation developing in Mexico – a surging drug cartel. Nearly 1,000 people died last year in the drug war, and cartels profited $25 billion. Schieffer notes that in some areas the cartels have “all but replaced” the Mexican government.

SCHWARZENEGGER ON TW

George Stephanopoulos interviewed Gov. Arnold Schwarzenegger (R-CA) on ABC’s This Week.

Steph first noted the criticism Schwarzenegger receives from both sides of the aisle. The governor retorted that when you’re in the center, you get attacked from the left and the right and that what is good for the people is not always good for politics.

However, reneging on a promise not to raise taxes is ALWAYS bad politics and California Republicans are hammering Schwarzenegger for reversing his campaign pledge to kill the car tax. The governor defended the tax hikes by pointing to Ronald Reagan’s tax increases when he served as Governor of California.

He next offered to take South Carolina’s share of the stimulus if Gov. Sanford rejects it, calling the stimulus bill “a terrific package.”

Steph asked Schwarzenegger what you say to a homeowner who did everything right and didn’t buy too much house, and the governor continued the talking point that job losses are the driver of foreclosure: “People just need a little bit of help.”

Next, Steph reminded Schwarzenegger that since he says that he came to the US out of hatred of socialism, how he feels about the US facing nationalization of the bank industry. The Governor said he likes the current system of the US taking over only failed banks and dislikes the European method where the government may own part of the bank.

When reminded that the TARP gives the US Government substantial ownership of banks, Schwarzenegger tried to recover by emphasizing the importance of stability and that “no one here is right or wrong.”

The governor continued his diatribe on no one being right or wrong: “It doesn’t really matter if you’re a Republican or Democrat.” What does matter to the California governor are roads, high speed rail, and other infrastructure, and for the GOP to return to power, he says its simple – listen to the people – and if the nation wants universal health care, the party should abandon its principles and give them universal health care. The governor also supports open primaries in California despite opposition from both parties.

Any fans of Governor Schwarzenegger should look for him in Sylvester Stallone’s new film The Expendables. Although rumored otherwise, the film is not about Schwarzenegger’s view of Conservative principles but an action film starring Jason Statham and Jet Li.