Dr. Goolsbee gets it wrong on the auto loans

This morning on Fox News Sunday, host Chris Wallace moderated a discussion about the auto industry. One of his guests was Dr. Austan Goolsbee, who is a Member of President Obama’s Council of Economic Advisers and chief economist on the President’s Economic Recovery Advisory Board.

I want to focus on some incorrect and inflammatory statements by Dr. Goolsbee this morning:

Chris Wallace: I also want you to talk about the clash between policy and profits. The governments wants General Motors to make small cars, fuel-efficient cars, while all the indications are, that according to the market, the cars they make most profit on are SUVs and pickup trucks. So which takes preference? Profits for the taxpayer shareholders, or environmental policy?

Dr. Goolsbee: The President made totally clear in his remarks, and he specifically said we are not going to be in the business of telling General Motors or anybody else what kind of cars to make, where they should open their plants, or anything of the sort. The President made clear we want to get out of this as quickly as possible. We are only in this situation because somebody else kicked the can down the road, and that’s really an understatement. They shook up the can, they opened the can, and handed to us in our laps.Senator Shelby knows that to be true. When George Bush put money in to General Motors, almost explicitly with the purpose, how many dollars do they need to stay alive until January 20th, 2009? There was no commitment to restructuring, to making these viable enterprises of any kind. They made none of the serious sacrifices. And Republicans in the Senate attached a list of conditions, they opposed George Bush’s intervention, because they said the unions had not made the following sacrifices. In the Obama plan, it asked more and received more from the unions and from the other stakeholders than the people that objected to the bailout last November asked for. So we have finally put them on that path.

This is incorrect. I will bite my lip, refrain from commenting on the tone, and focus on the facts.


At 3:30 pm on Sunday, November 30, 2008, a quiet meeting occurred at the Treasury Department in Secretary Hank Paulson’s office. Present for the Bush Administration were Treasury Secretary Paulson and Commerce Secretary Carlos Gutierrez, White House Chief of Staff Josh Bolten, Deputy COS Joel Kaplan, White House […]