E-mail a friendNewt Gingrich
airdate March 23, 2009
Newt Gingrich has been busy since leaving his post as U.S. House Speaker. He founded the Center for Health Transformation and chairs the nonpartisan American Solutions. He's also a Fox News Channel analyst and best-selling author. Gingrich's books include Real Change and Drill Here, Drill Now, Pay Less. Long involved in various environmental initiatives, he co-wrote A Contract with the Earth. Gingrich has a Ph.D. in history and taught environmental studies before his election to Congress.
Former House Speaker responds to the Treasury secretary's plan to take troubled assets off of banks' books. (1:24)
Full interview. (12:06)
Newt Gingrich
Tavis: Newt Gingrich is of course the former Speaker of the House, now a bestselling author and general chairman of American Solutions for Winning the Future. He is also the host and producer of a new documentary called "Ronald Reagan: Rendezvous with Destiny." He joins us tonight from Washington. Mr. Speaker, always an honor to have you on the program, sir.
Newt Gingrich: Yeah, it's good to be with you, Tavis.
Tavis: I want to start with a quote from you, a full-screen graphic here I want to put up with a quote from you that was made prior to, obviously, today, and the announcement from the Obama administration about this long-awaited plan to remove these troubled assets from the banks' books.
And I want to see if you feel today, now that you've heard the news from the Obama administration about this plan we've been waiting on, feel differently than you felt a few days ago, when you had this to say, and I quote: "Thanks to the Bush-Obama-Geithner policy of bailing out failing companies, we now have the worst of all possible scenarios - a taxpayer-subsidized private company, an unsustainable public-private hybrid that is too public to make its own decisions and too private to be responsible to the taxpayers that are keeping it alive.
"Outrages like the fat-cat bonuses currently dominating the headlines will only continue as long as the rule of politicians supplant the rule of law on Wall Street," close quote. That's what you said on the 18th of March. Now that you've heard Mr. Geithner's plan today about getting these, again, troubled assets off the banks' books, you feel differently, the same, or are you even more disturbed?
Gingrich: No, look, I feel the same. If you look at what he's proposing it's going to be a series of public-private partnerships, there's going to be huge taxpayer subsidies. There's going to be all sorts of opportunities for collusions, for crony capitalism, for favoritism, for taking care of friends.
I'm against that kind of model. I think that this whole notion of having the Treasury bureaucracy try to run Wall Street is impossible. I don't think there's any chance that the Treasury bureaucracy can cope with that level of complexity and speed, and I think that inevitably when you give that much power to one appointed official sooner or later they do things that have favorites.
Look at what we learned last week about AIG - $11 billion went to Goldman Sachs with no negotiations. Didn't suffer a penny of loss, $11 billion. I think $15 billion went to a French bank - no negotiations, not a penny of loss. Now why are they getting taken care of while the average American is having to tighten their belt, the average company is having to tighten its belt, but somehow, these folks, they've got the best of all worlds.
They got the federal money with no oversight, no transparency, no accountability - they just took the cash and went to the bank.
Tavis: What do you make of the fact that no matter how you feel about it, Wall Street had a nice close today on this news?
Gingrich: Look, I think if you tell Wall Street you're going to spend enough money, they're going to be fairly happy. (Laughter) Now the question is, is it sustainable? The secretary of the Treasury went out and said, "Hi, can I give you all hundreds of billions of dollars?" And they said, "Oh, good, I think I'll feel good."
If you're an average citizen and you're going to pay taxes on April 15th and you're looking at the size of the deficit that's being run up, you will pay interest on the debt for the rest of your life. You have to wonder why you should be happy when the folks on Wall Street are happy to get your money.
Tavis: I guess the question is, given what you've just said, nobody seems to not agree with this - I don't think even you disagree with this - that part of this problem is about these toxic assets that are inside the banking industry. We've got to do something about these toxic -
Gingrich: Sure.
Tavis: Okay. So if we agree on that, what ought to be done about those toxic assets?
Gingrich: Well, Vince Haley, who's one of our chief researchers at American Solutions, recently wrote an op-ed suggesting we have basically an eBay-like auction. Put them out in the open, have people bid on them, create a real market. Somebody's going to buy them at some price. And then if the government wants to cover the difference in order to make sure the banks don't go broke, that would be an open, transparent model and it would let anybody who had assets bid on it.
It would create a very large market; lots of people could come in and bid. The way they're going to structure it now is going to be a handful of the big boys with billions of dollars; it's going to be a closed game. The average person's going to have no chance to know what's going on, and I think that's essentially wrong. It ought to be transparent, out in the open, and you ought to let the market decide real value.
Tavis: Now that we are - we're not out of it yet but we do have some of this in the rearview mirror, I'm so curious as to your take on this whole bonus brouhaha to begin with. What do you make of how this story has rolled out, how the Obama administration has handled it? Give me your take on the story.
Gingrich: Well first of all, it apparently was specifically provided for in the stimulus package, which they had to pass so rapidly that no one was allowed to read it. So now we find out that in a $787 billion, thousand-page-long document, which even the Senate Finance Committee chairman admitted - Max Baucus of Montana admitted he didn't realize it was in there, and yet he's supposedly writing it.
You look at that and you say there are probably a lot of other things we're going to discover in the next six months. But the government specifically provided that those bonuses were okay. So here you are, you're a businessman. Your government's now told you you're allowed to take the bonus. You take the bonus and suddenly the news media discovers it.
The voters back home get really outraged, which they should have; it was outrageous. The politicians who gave you permission to take it decide they're now going to come lynch you because they're afraid if they don't lynch you that their voters will lynch them.
I think, frankly, we look like a Third World country with a totally incompetent Congress doing really weird things, and I think the average investor around the world is a little bit less likely to invest in America this week because this Congress is so irresponsible.
Tavis: You have always - back to your days with the Contract with America, which I want to talk about here in a few minutes - you have always been a stickler about language. I remember when you were just joining Congress, you were running around the country then talking to people about how to make the case, how to use certain words that matter.
And one of the things you've been talking about lately is the difference between using the phrase, the word "bankruptcy" versus "bailout." Give me your take on that.
Gingrich: Well, look - I think companies can go into a chapter 11 bankruptcy court, they can get reorganized under the protection of the court, they can come back out. That's what the airlines industry had to do, and I used to represent the Atlanta airport. It's painful, it's difficult, but it works.
A bailout is when the government starts stepping in and giving you money you haven't earned to cover up mistakes you've made, and that just sickens the whole system. I think we'd have been much healthier today if we'd had a regular, orderly bankruptcy process.
And again, chapter 11 bankruptcy is designed to allow a company to go in, get rid of its toxic assets, come back out as a smaller, trimmer, and healthier company, and then you'd have the question of what to do with those toxic assets. But I'd much rather have the market tell you the real value of them than have a bunch of bureaucrats and politicians trying to do it.
Tavis: Is Tim Geithner in over his head? Is he the wrong guy? Do you want him gone?
Gingrich: Look, a guy who can't figure out for four consecutive years that he owes taxes, even when every three months his employer, the International Monetary Fund, had him sign a document saying he understood they'd given him the money and he understood he owed taxes on them, has always left me very dubious.
And now, apparently, he did not know they were going to pay bonuses even though Treasury had said as early as November the bonuses were going to get paid. And now we're being told that somebody somewhere told Senator Chris Dodd he had to put this in the bill, and I don't see Geithner taking any responsibility, which makes me believe either he's not being very honest or he's not very competent.
I don't know which it is, but it's a very strange performance for a secretary of the Treasury.
Tavis: You know the ways of Washington well, certainly where these scandals are concerned. You've been around long enough to have been involved a few of them yourself to know how these things work out.
Give me your sense, then, of how you think this plays out politically. I don't mean now with public policy. Politically, is Geithner going to survive? Is Dodd going to end up paying for this when he runs? How does this play out politically for Democrats, and (unintelligible) Republicans.
Gingrich: Sure, look. First of all, Senator Dodd now has a very formidable opponent in former Congressman Simmons, who's going to run against him, who's very attractive, very smart, and I think that's going to be quite a race and I think Senator Dodd has been pretty badly weakened by revelation after revelation of various and sundry things that are pretty hard to explain.
I think Secretary Geithner's going to have a hard time surviving because I think that as people learn more and as we realize how badly this was designed and we realize that Geithner really represents a Bush-Obama continuum - this wasn't real change. This wasn't what people voted for. This is the big boys getting taken care of by your tax money and by your wallet, and I think at some point down the road, Secretary Geithner will ultimately just disappear.
Tavis: So it's one thing to have Frank Rich in "The New York Times" yesterday take you on (unintelligible) the Obama administration, and Frank didn't hold any punches yesterday; it's one thing to have in that same paper another good liberal, Tom Friedman, take you on. So even the liberal - that liberal media bias is now starting to bite the president in the behind on these economic issues when you got Rich and Friedman coming after you.
It's one thing to have that turn against you, but it's still quite another for the Republicans to have a plan, and apparently y'all just ain't got one yet.
Gingrich: Well, I think you're seeing one emerge. If you go to AmericanSolutions.com you'll see 12 solutions for jobs and prosperity. We would adopt a very bold plan. I think you're going to see Congressman Paul Ryan, the ranking Republican on the budget committee, propose a budget alternative that's very attractive, very comprehensive, next week.
I think that you're going to see a lot of things developing, and I think that frankly Congress John Boehner, the Republican leader in the House, as been actively working across all of his members to develop a new generation of plans.
The White House likes to say there are no alternatives, but that's not true. There are very clear alternatives, and if you go to AmericanSolutions.com and just click on 12 American solutions for jobs and prosperity you'll see a comprehensive and very different approach to getting this economy moving again.
Tavis: When I mentioned at the top of this conversation your documentary about Ronald Reagan, it made me think again that what this party - that is to say, your party - lacks right now is a face, is a leader. We had that whole Steele-Limbaugh ridiculous brouhaha. Is it Cantor, is it Ryan, is it Boehner, is it Gingrich?
Talk to me now about this vacuum that exists - it's like this moment right now is tailor-made for you guys to put somebody out front to be your leader, to put forth a plan. Now's the time for the contract, except you ain't in Washington and you're not in Congress anymore.
Gingrich: Well, look, I think that if this was March of 1977, Ronald Reagan was doing radio shows and giving speeches, but he wasn't the leader of the party. He didn't become the leader of the party until he won the nomination and then won the presidency.
The fact is you've got people like Governor Mark Sanford, Governor Bobby Jindal, Governor Haley Barbour, Governor Palin, Governor Pawlenty - lots of competent people around the country doing a good job. You have a number of bright, rising younger Republicans in the House and Senate - Eric Cantor, for example, Paul Ryan, Kevin McCarthy, Mike Pence.
I'm pretty confident you're going to see, over the next few years, a very dynamic Republican Party with a lot of opportunities for people to lead.
Tavis: I'm out of time here, but seriously, you're such an erudite guy - isn't that the problem? You can't be serious with a list with Palin and Jindal on the list, can you, Mr. Speaker?
Gingrich: Sure. Sure. First of all, Jindal has the only state in the country that gained employment last month. Bobby Jindal's done a brilliant job in Louisiana. His state is actually growing economically when everybody else is in trouble. There's a lot to learn from studying Jindal. And the fact is, Governor Palin has a nationwide supporting group that likes her very, very much.
But we're a long way from shaking all that out. I think it's a long way from here to getting the Republican nominee in 2012.
Tavis: Well, we'll continue to watch it and watch you in the process. (Laughs) Mr. Speaker, as always, nice to have you on the program. Thanks for your insights.
Gingrich: Thank you.
Back to March 23, 2009