KRUGMAN: Yes, it would take something like 20 years to replace the existing stock of autos at current rates of sale, right, so we know that that's not going to -- we know there's going to be some recovery. People will start buying more cars. That helps even if they can even, you know, partially maintain their share.
It needs some general revival. It's not that hard to tell a story where GM starts to have a positive cash flow. It's by no means guaranteed. This is a company that spent several decades ruining itself, so it's not easy. But it's not crazy to think that this might work.
STEPHANOPOULOS: And this is a decision that President Bush, Ed, in the White House in the final months, basically said he would allow President Obama to make, because he gave the bridge financing to GM.
GILLESPIE: He did a bridge. And I have always felt that had the -- you know, this come up in the first month of President Bush's second term, rather than the last month of his second term, he would have done something different. I think he would have made different decisions.
STEPHANOPOULOS: Let them go under?
GILLESPIE: I think he would have -- my personal view is, had it been a different time, he would have probably done a structured bankruptcy, a debtor-in-possession type financing arrangement. But didn't feel like it was fair to the institution of the presidency to hand off to a successor in the last month of his presidency to make a decision like that, and so he bridged this gap in a way that gave them time to come back with a plan of restructuring of their own and allow for the successor president to make his own policy decision. I think it was the responsible thing to do, probably one of the toughest decisions of his presidency.
STEPHANOPOULOS: Go ahead.
WILL: Well, two things. I mean, these things have ricochets after you start into this business. First of all, General Motors acceptance corporation gets itself declared a bank holding company, so it's eligible for TARP. Immediately does two things after it gets $6 billion of taxpayer money. It offers zero percent, five-year loans of products competing with Ford Motor Company products, thereby injuring the most healthy company out there.
Then, it further lowers the credit score that you have to have to get a GMAC loan. Now, what would we call this? I think we would call those subprime auto loans. So you can drive away from your foreclosed house that you bought with a subprime housing loan in a car you bought with a subprime auto loan.
GREENBURG: But George, I mean, that is exactly right when you think about these ricochet effects. I mean, you've got Ford now, the only one of the big three that is not going to be controlled by the government. So how then can you assure Ford is not made vulnerable by letting GM or Chrysler have, you know, access to capital at virtually lower...
IFILL: What does government control mean? I think that's the thing that's really dawned on everybody this week, that when people make jokes about Government Motors, but in fact, when the government controlled 72.5 percent of a privately owned company in kind of a shockingly -- shocking incursion into the private-sector company, does that mean that President Obama has to sign off on a new car that they decide they're going to build? (CROSSTALK)
KRUGMAN: AIG is 80 percent government-owned, and it doesn't seem to be any different, so I'm not sure...