RENEE MONTAGNE, host:
Meanwhile, Congress is still hammering out a bailout package for U.S. automakers. For weeks, executives from Detroit have lobbied lawmakers for emergency rescue loans. It's a sharp contrast to the recent bank bailouts, as many have noted. David Leonhardt writes about economics for The New York Times. We ask him why the government moved so quickly to bail out banks, but has been so resistant to helping U.S. automakers.
Mr. DAVID LEONHARDT (Economics Reporter, The New York Times): Banks can collapse overnight in a way that auto companies can't. And that's a message that Ben Bernanke, the chairman of the Fed, and Henry Paulson, the Treasury secretary, brought to Congress. No one was bringing a similar message to Congress about the auto industry, except people in the auto industry.
MONTAGNE: What else might congressmen - let's just talk about that - be thinking about?
Mr. LEONHARDT: Well, there really are no banks that have managed to survive this financial crisis particularly well. That's not the case with the auto industry. You can look at Toyota and Honda and the cars that they make inside this country, and you can say, boy, if GM and Ford and Chrysler had done things differently, they'd be a lot healthier. And so it becomes harder to justify giving them money when there are these counter-examples of auto companies that are doing business differently and really doing quite fine.
MONTAGNE: And some of those auto companies have their own supporters in Congress.
Mr. LEONHARDT: That's exactly right. So these Japanese auto companies that have set up factories in this country have generally done so in the South. So the southern congressmen and congresswomen are really not so interested in bailing out Detroit because it seems like they're hurting their own constituents - residents of Kentucky and Alabama and Mississippi who work at these plants. And so you actually have people who are actively opposed to this idea because they feel like it might hurt the economic interests of their state.
MONTAGNE: And we've been talking about Congress and its support, or lack of. But why has there been what appears to be not a groundswell of support just among Americans generally?
Mr. LEONHARDT: Yes, that's a little confusing. Because you can imagine that you would have much more of a populist backlash against Wall Street than you would against the auto companies. Some people have suggested that there's some kind of class bias here, that people are more willing to bail out white-collar workers from Wall Street than blue-collar workers from Detroit. I don't know whether that's the case or not. It might be.
And I think some of it is this term "bailout fatigue" that we've heard recently on Capitol Hill. People just feel like, wow, we're going to have to do another one of these bailouts? Another failing company needs our help? I think if Detroit had been in these sorts of dire straits before any of the finance companies, it might have been easier for Detroit to get the money that it's now asking for.
MONTAGNE: Given everything, what do you think should happen now as regards the auto companies?
Mr. LEONHARDT: Well, there has been a bit of a double standard here. Wall Street hasn't been treated as harshly as Detroit has, and there's a way in which that's not fair. But having said that, I think we've been right to give these Detroit executives a hard time. They've done a really bad job running their companies for many years now.
Going forward, we should be giving Wall Street executives the exact same hard time about how we introduce regulations that don't allow them to require a bailout like this again, about how we make sure they're spending the money - the taxpayer money - in a way that isn't wasteful and actually gets the economy going again. And so if there has been a bit of a double standard, I hope we correct it not by going easier on the Detroit companies, but by being harder on the Wall Street companies.
MONTANGE: Thanks very much for joining us.
Mr. LEONHARDT: Thank you, Renee.
MONTAGNE: David Leonhardt writes about economics for The New York Times. And he joined us in our Washington, D.C., studios.
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