E-mail a friendGov. Jon Corzine
airdate September 29, 2008
First-term New Jersey Gov. Jon Corzine previously served in the U.S. Senate, where he co-authored legislation designed to crack down on corporate malfeasance and was chief sponsor of the Darfur Accountability Act to address genocide in the Sudan. He also voted against the Iraq War Resolution. Before entering public service, Corzine worked on Wall Street, rising in the ranks to become chair and CEO of Goldman Sachs. A native of central Illinois, he has an MBA from the University of Chicago Graduate School of Business.
New Jersey governor offers his thoughts on the House failure to pass the $700 billion bailout plan. (3:52)
Full interview. (7:41)
Gov. Jon Corzine
Tavis: The closing bell on Wall Street this afternoon on a wild day that saw the House of Representatives reject the $700 billion bailout plan that many say is necessary to prevent further harm to the U.S. economy. The Dow Jones closing down nearly 800 points today.
For reaction, I'm joined tonight by New Jersey Governor Jon Corzine. Prior to his time in the U.S. Senate and now of course the state house, Governor Corzine served as the CEO of Goldman Sachs, one of Wall Street's biggest banks. He joins us now from New York. Governor Corzine, nice to have you on the program.
Governor Jon Corzine: Tavis, great to be here.
Tavis: Glad to have you on. I wish I had you on under different circumstances, but glad to have you on nonetheless. Did the House --
Corzine: Pretty messy day.
Tavis: Very messy day. Let me start by asking you first, did the House do the right thing in rejecting this bailout plan?
Corzine: The program that has been laid on the table is ugly, it's unattractive, but I think it's necessary. The reality is is that we need something in the short term to stop what I'm afraid is going to gear up the whole economy, as opposed to worrying about what's going on in Wall Street. It's really the implications to Main Street that I'm very fearful of.
I think the program should have been developed around putting money into Main Street. We should have been buying homes and restructuring mortgages for the public, putting money into states and other places. You're going to spend $700 billion, ought to go to the real economy.
But the train left the station, the Bush administration got so committed to this idea, and something has to be done. And kind of like Franklin Roosevelt said in the '30s, it's better to do something than to do nothing. Standing still is a big mistake.
Tavis: Does that mean that you think that the House, then, should have supported this today?
Corzine: Yes, yes.
Tavis: Okay.
Corzine: I don't like the program, I wish it had been focused on the real economy, on people's homes, on putting money into stimulating the economy, but if they're going to do nothing, that's not acceptable, so this is better than nothing at all.
Tavis: Why not reject the plan as is, since by your own admission you don't even like it? Why not reject it as it is, as it's been structured, and do exactly what you've just suggested ought to be done?
Corzine: Tavis, I think that'd be great, except that I don't think the Bush administration would support that and I don't think you could get enough votes to make it happen, and doing nothing is completely unacceptable. I'm a long way removed from Wall Street these days, but I can tell you that right now, companies can't get credit in the commercial paper market, at their banks.
States are paying -- states like New Jersey and California -- are paying exorbitant rates to be able to keep paying our bills and having things happen on a business as usual basis. And if we don't do something about staunching that, then I think unemployment's going to skyrocket and we will see a lot more than just foreclosures -- we'll see a breakdown in business and real economy.
Tavis: How much, for the average, everyday American who's trying to sort their way through all this -- first of all, we can't even count to a trillion dollars.
Corzine: I can't imagine -- it doesn't matter who you are, that's a big deal.
Tavis: Yeah. So one, we can't even count that high, most of us -- I certainly can't. But secondly, the average American, I think, is still trying to figure out what to believe here and what not to believe, and when you get this constant refrain that if we don't do something that the whole country is going to tank, I think a lot of Americans hear that as hyperbole. Tell me whether or not it really is --
Corzine: Well, I don't think the whole country tanks, that's not the point. But it is the economic cost of seeing unemployment rates go from 6 percent to 10 percent, to see failed businesses that don't need to fail, to see state taxpayers pay a lot more because their interest rates are sky-high. That's the kind of question that I think is going to come to pass as a reality if we don't actually act.
Doing this, which is really a trickle-down approach -- and unfortunately that's what the Bush administration's been doing for eight years; that's how we got into this mess, between non-regulating what is going on with not overseeing it they have just ignored the reality of the economy.
Tavis: I guess I'm trying to figure out -- even if I agree with you that this isn't the best way to do it, I'm trying to figure out, since the House rejected it today and I suspect some of that had to do with the heat that you and I both know they've been taking from their constituents --
Corzine: Absolutely.
Tavis: I'm hearing the mail is running, like, nine to one against them voting for this. So some of them didn't want to catch hell back home, particularly this close to election day.
Corzine: But you also had a group of Republicans, Tavis, that are sort of free market aficionados that they're so true-blue to their view that they wouldn't even come along on this program that the administration is asking for. So I think it's as much all of those folks that are Adam Smith times 10 on steroids that are avoiding actually supporting a bipartisan effort to say, well, we don't like it, but we're going to do it.
Tavis: If the American people think that what got us into this mess is greed -- I certainly do -- if what got us into this mess is greed, how then do you fashion a package, and how do you sell it to the American people? How do you sell them on the idea that we have to do this now, even though these greedy guys on Wall Street are going to get bailed out?
Corzine: Well one, you've got to make sure that the greedy guys on Wall Street, the people that really have abused the system, are held accountable. Whether it's through U.S. attorney's offices or whether it is having pull-backs of compensation packages, or undermining the value of the shareholdings that their stocks have accrued. You've got to be really, really tough, and there's got to be a commitment that that's going to happen.
The second thing you have to do is say what is the alternative, and how bad is that going to impinge on the lives of the people that are angry about this? And somebody's got to have the courage to say that the cost of 10 percent unemployment, the cost of failed banks, is the loss of potentially dollars on deposit accounts that individuals have at banks or the ability for a small business that has a restaurant or a diner to be able to get a loan to keep in business while business is down, or to get through Christmas.
So you have to look at what is going to be the cost for the human beings out on Main Street if we don't do something.
Tavis: This story, of course, just unfolding -- a new chapter, at least, in what happens here with this economic melt down that we are experiencing. Honored to have on the program tonight the former CEO of Goldman Sachs, and now, of course, the governor of New Jersey, John Corzine. Governor, nice to have you on; thanks for your insights.
Corzine: Tavis, pleasure.
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