Elizabeth Warren: Why Was Detroit Bailout Treated Differently Than Wall Street Bailout?

When poor lending practices brought the world's biggest banks and AIG to their knees, Washington delivered hundreds of billions in financial lifelines, with little to no restrictions.

When car manufacturers in Detroit needed bailing out, Washington played hardball and made sweeping changes to the boards and management at both GM and Chrysler.

Elizabeth Warren wants to know why two insolvent industries were treated so differently.

Warren, chairwoman of the Congressional Oversight Panel, spoke with MSNBC's Dylan Ratigan about inequality in Washington's bailouts. Warren:

I think the problem has been all the way throughout this crisis, that the banks have been treated gently and everyone else has been treated really pretty tough.

Warren's interview with MSNBC is scheduled to air Monday morning, Sept. 14 at 9:30 a.m. EST.

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Comments

[nopilikia]

Because the banks own Congress. Otherwise their first order of business would have been to repeal the laws that allowed this to happen. Bring back Glass-Steagall and Bucket Shop Laws for starters. But thats not going to happen anytime soon.

[lapdogs]

We can "thank" John McCain's economic adviser, Phil Gramm, for putting a 200 page amendment into an omnibus spending bill in 1999 - which did away with Glass-Steagall.

[jcranman]

Elizabeth Warren for President!

[norepublicanleftbehind]

Because bankers don't have unions to bust.

[theLeftPaw]

DING! DING! DING! DING! DING!!!!!!

[ImAliberal22]

Why is it so hard to find good, progressive leadership in America?

good articles for a slow news day: http://www.iamned.com

American needs help.

[MikeDu]

If banking fails EVERYTHING fails including the auto industry. If your building foundation crumbles it doesn't matter how well maintained your plumbing was. This time last year emergency supports were thrown up to keep EVERYTHING from collapsing. It was the sensible thing to do at the time. But now the worst thing we can do is make believe everythings okay and major structural reform isn't needed. But the rats prefer the crumbling foundation because they've got gaps and craps they can scurry into and out of undetected.

[LunaPark]

"If banking fails EVERYTHING fails "

No it wont and it was NOT a sensible thing to do. This is a fear tactic used by the banking industry to scare us into compliance. Just like when Condasleezy Rice said the Iraq smoking gun would be a mushroom cloud. If the big banks fail, other healthier banks would step in to replace them. Instead, we are supporting, through tax dollars, failed businesses. I would rather stand in a soup line than see these failed banks get anymore money. I'm tired of the fear tactics.

[Name Not In Use]

"EVERYTHING"

Would have been just fine.

Nothing real happened.

No war, no flood, no plague ...

Just blinking lights.

[lapdogs]

You been drinking that rightwing kool-aid, Mike? I thought I told you to stay away from that stuff.

Meanwhile, the news below is going unreported except on Real News and McClatchy.

http://therealnews.com/t/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=4389

Goldman Sach's Secret Bets
By Greg Gordon | McClatchy Newspapers

WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

[Hawaii5-0]

As one Congressman said a few weeks back, "Banks own this place (Congress)." I haven't heard it since, and I am sure he was told to shut up. Warren is trying to tell the truth without making too many enemies. Our political system and govt have been taken over by banks and insurance companies. They pass laws to regulate interest rates, but give them plenty of time to raise them before they take effect. Our publically elected representatives now ONLY represent banks and insurance companies, with the exception of a rare few.

[ntmessage]

Well, let us not forget that little thing about the TARP being for financial institution stability, not auto companies. Not saying that we should or should not have bailed out the auto companies, but they had different issues and it was not clear on what legislation was passed explicitly for the auto companies.

[Name Not In Use]

Toxic Automobile Relief Program

The government buys all their crummy cars.

650 billion for AIG or

buy 21,250,000 GM cars at $40,000 each.

Wait GM only sold about 3,000,000 cars total in the US last year.

Chrysler hasn't sold over 3,000,000.

Ford sold about 2,000,000 last year down from double that a decade ago.

That means we gave AIG alone enough money to buy all the cars sold in the US by all US auto makers for an entire year - twice.

Why?

[statementOfIncensed]

With failures like these who needs success?

[KriTiKiT]

why is she not in charge?

[Canthisbe]

Finance is east coast, Ivy league operation, while the auto industry is a midwest state university operation. The people running the government and the banking business are the same people. The politicians that are out of power get paid off by the financing business until they get their next turn in power. Both parties do this and they all want the big buck jobs to get richer when they are on the outside. The people running the government know that know its just a matter of an election or 2 and they will want to be back at the financial industry feed bag so they take good care of the people that are going to give them the cushy jobs and pay them millions.

On October 19, 2006, Larry Summer became a part-time managing director of the investment and technology development firm D. E. Shaw & Co. He was paid $5.2 million in his second of two years working there, while working just one day a week.

The Clinton administration’s White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama’s VP search committee, has hauled in millions from his Fannie Mae CEO job.

In 2006, Fortress paid former Sen. John Edwards, the 2004 nominee for vice president candidate, $479,512 for his consulting services, a part-time job.

[againstzionistracism]

Finance is under the control of "......", who are powerful enough to control foreign policy and start catastrophic, devastating wars which have killed thousands of US military men and women and hundreds of thousands of Iraqi people and destroyed their country...

[wafuu]

I love the earnestness of this woman, not to mention her brains.

[altohone]

Wall Street loves free money but hates unions.

Next question.

[Robert Cantor]

why do we let them get away with it?

[lightningbolt]

It is very simple. Big banking has the power to threaten and blackmail the President with economic collapse, destruction of the currency, or other similar things. Big auto does not have this power. Therefore, big banking gets to control the President.

[dukeuch]

Might add too that the the average American understands the general concept of building cars, not so much the vagueries of the various derivatives that seem to have something to do with the health of our 401Ks.

[MyLIbealUser]

I'm getting tired of Obama doing nothing. He promised us Wall street reform, Heathcare reform, and more jobs and we got NOTHING except more debt.

hat tip to http://www.iamned.com

the economy is rigged against middle class, anyway ...

[bola47]

thank the republicans for obama doing nothing. they are obstructing everything he wants to do. their motto is make the black man fail.

[shivasquest]

We were blackmailed.The banks made sure they could destroy the world economy if they didnt get what they wanted.They held the cards.