tv [untitled] CSPAN June 8, 2009 7:30am-8:00am EDT
more stories just to keep the public off the main issue which is the economy. that is the problem. we need jobs. you don't need to be talking about things that are not of immediate danger this time. we need to clean out our own house before we can clean anyone else's. if you do not have a strong economy you have no sovereignty -- you do not even have a country anymore. let's concentrate on getting jobs back. host: we will talk about the auto industry later in this show. next we will focus on executive pay for companies receiving federal assistance. the president today expected to announce an overseer. we will talbe right back to talk with our guest.
>>how is sues been funded? >> spread of the nation's textbooks from public television? >> federally? >> donors? >> hal is to spend funded? 30 years ago americus cable companies created in it as a private initiative with no government mandate or money. >> with the federally mandated transition coming next week we will get a status report on held the fcc has prepared dealers. these will be the guests. -- held the fcc has prepared viewers. tonight at 8:00 p.m. eastern on
"the communicators" on c-spans. 2. >> there's still time to get your congressional directory. it includes information on the lawmakers and contact information along with maps. you can get it online or call. "washington journal" continues. host: tuesday is primary election date in virginia. jeff schapiro is a reporter for the paper there. it is a 3-way race for the democrats there. tell us why the rest of the nation should be interested. guest: virginia and new jersey are the only states have been governor elections in these two
states were carried by obama. it will affect washington. host: two candidates might be familiar nationwide, particularly one for those familiar with the democratic party. tell us about them and who was leading according to the polls. guest: you are probably referring to terry, the former chairman of the democratic committee. and the other parachuted just 10 months ago into the democratic race and assembled an impressive organization and raised a good deal of money. but the pre-primary polls which are more curiosities than anything else given the likely small turnout suggest he may be fading somewhat. a second candidate is brian moran, a former member of the house of delegates. he is from the city of alexandria. heat is the younger brother of
jim, a longtime congressman from northern virginia who sits on the appropriations committee. he has been touched by some of the controversies surrounding military contracts. and the dollars that congressman generate from lobbyists for the defense industry. the next candidate is deeds. the polls seem to suggest a surge on his part. he is a former member of the house of delegates as well and was an unsuccessful candidate in 2005. that was the closest statewide race in virginia history. he was defeated by the man he would like to take on in the fall, bob macdonald, the
republican. host: this piece as that mr. deeds cannot be him. guest: that was attacked by someone perceived to be a front runner. it indicates that the ground might be shifting. mr. mccullough's the love complaint focuses on two issues, the support of our rights, very sensitive and rural virginia, and his supporters of lawyers ago of an increase in fuel tax. mr. mccullough noted that bob macdonald has already defeated deeds. because of those issues he could likely defeat him again. host: what will you be watching for with the democratic primary tomorrow? guest: because a light turnout
is expected anything could happen. but this seems to be a two- person race. mccullough and deeds. the conventional wisdom is that if mr. deeds pulls this off, despite a lot of work ahead, that he might be in a position to better compete for swing votes against bob macdonald in the fall. host: you can read his work at the times-this patch this morning. joining us now is crittenden i. here's an article about the administration theappointing a y czar. guest: we have put hundreds of
billions of dollars into the finance industry in b.c. the same greedy behavior the have always exhibited. everyone knows that greed is good, but in recent years we have seen the problems with that. to make sure that these companies are overseen -- those with exceptional assistance from the government, to make sure that they comply with what people want is what mr. feinberg will take care of. host: will he oversee all love executive pay? guest: especially those that have come back to the trough a couple of times will be under more intense scrutiny. he will take a close look and either approve or disapprove, request changes. now for other companies who have received tarp funds, they will face restrictions, probably on their top 25 earners.
barack obama administration has been trying -- it is a delicate balance to marry these two various proposals to make sure that we oversee host: them is there any precedent? guest: you have seen the government step in before, but it is a step beyond what we have seen in the past with the finance industry. especially because of public pressure you will see more desire require these guys making hundreds of millions in bonuses when their companies continue to destroy the economy for everyday people? host: this announcement today, a parallel story, is the fact that a number of banks who received federal aid will be repaying the money as early as this week.
where they taken the step now? guest: because they do not want to face these restrictions. this money that they have received from the government -- especially last fall when there was no capital available for banks -- it is funny, because the banks will say that washington is interfering too much. half of these companies would not even exist if washington had not stepped in. it is humorous that they talk about government -- they are cracking down on us -- well, yeah, these companies have caused the worst depression since the great depression. host: people familiar with he and his role in the 9/11 investigation, right? guest: yes, he personally look at every claim of payout to victims and their families.
he studied them. he was the man in charge of that. he is the rainmaker they're bringing in. host: as a result of bailout and other legislation, have congress stipulated parameters for executive pay? guest: yes, a few months ago congress, especially in response to the aig bonuses, went further than the obama administration wanted to. that is the problem that the treasury has had. trying to incorporate what congress wanted for the top 25 earners, the top executives -- there are limits. especially with bonuses. we see banks finding new ways to pay people. host: any indication this will be a temporary position?
or full-time thing? or just for the duration of this bailouts? guest: no, from congress i think what you will see is a complete revamp of how we oversee the financial markets. one of the key things we expect secretary geithner to testify about is these principles that firms should get away from compensation systems that encourage risk. they encourage people to write $50 billion worth of credit defaults swaps. it stops them. it stops the incentives to write these. those that leverage risk up to a point, that, you know. it will be principles that regulators can go to companies and say your compensation is them here, you are encouraging bad behavior. encouraging people to write
subprime mortgages without awareness of whether they will pale. so, it will be more principles- based. the industry will probably not have much teeth. they for the first time are pushing the principle that risk is a problem host: michael is with us until the top of the hour to talk about this new executive pay oversight. florida, on our republican line. caller: hello. number one, how much is this individual being paid? host: mr. feinberg caller: yes, what is though czar being paid? guest: he has not even been
officially announced as such. we will see that in a few weeks. once they do that we will see his financial disclosures. host: his official term is special master for pay? guest: that is what we have been told. host: are you still there on the line with us? let's go to north carolina on our independent mind. caller: i was just curious with the bonuses paid out, it just seems if they are paying those it says there were doing what they're supposed to do. why would they be paid bonuses if they messed things up? it seems like they did their job. and they got their bonuses and a bailout they needed. it seems like everyone is being rewarded. for crashing the system and taking the bailout. guest: that is the concern of
lawmakers and why they reacted with legislation a few months ago that went further than perhaps the administration wanted them to. that is apparent and the public mind. it is what they want to push the principles where firms are not encouraged to give bonuses for people who messed things up. host: good morning. caller: i would like to say that i think they ought to limit the ceo pay and more corporations, have it at $500,000 and if you do not want to take the job, someone else will take. look at this economy. someone will take a ceo job for $500,000. host: you were talking about all companies? he is guest: gone that is an interesting point. no one says we should set a specific level, but you always hear this argument from the
business community. you hear them say they have to pay for the best people because there is competition. there are many wall street workers out there could be willing to come on board for less pay. no one wants the government to set pay. host: previous caller talked about bonuses. let me read from the story talking about the money being repaid back to the government. the stronger banks are set to begin moving in a different direction. the fed is expected to announce that goldman sachs, a j.p. morgan chase, and a few others will be allowed to repay government investments of capital. they are able to pay this back because they have seen many come back into their coffers. are some of the people who work for those companies who are into someincentivized by bonuses so
that they can pay back this money -- is it that way? guest: a lot of these toxic assets we have talked about, those still exist. they're still sitting on balance sheets. accounting changes have helped these banks to appear more healthy. the government stress tests or not that stressful. some of these banks, you are starting to see them turnaround largely because of government aid. it will still face -- if you accepted tarp you will face host: restrictions are there banks out there that are still in perilous conditions? guest: government policy is not
to let them be. it is impossible to say because we have allowed them to account for insolvent assets. our policy issues to not allow them to fail or be perilous. host: your the reporter for dow jones. here's a tax question. what is the current limit of the deductibility of executive pay? guest: that is one thing that lawmakers want to address. it is one way to may be addressed executive pay. you have seen some people on the ways and means committee talk about that. if we're letting these folks have a low tax rate when they gain billions of dollars or hundreds of millions in bonuses -- some make billions with the
big hedge funds -- that is another way. lawmakers could eventually look to recoup some of these. host: here's a call from indiana. caller: good morning, my question is why is the obama administration creating all these czar positions? why don't they let congressional members do it because they're not doing anything for the people? guest: one reason these positions are being put into place is because it gives them a point man. it is partly a political demonstration that these are issues they consider important enough to appoint someone specifically to focus on them. host: he will also oversee the pay of the automobile companies.
guest: right, gmac, gm -- all these firms. anyone who has received bailouts in the last six or seven months. host: here is a tweet -- a comment on mr. feinberg. every american should see a giant red alert here. this is baltimore, md. on our democrats' caller: line good morning. i have a question for your guest. my question is, i wonder if mr. crittenden was aware that president obama as a center sponsored a bill to curb executive pay? guest: yes, i mean, heat -- go
ahead. yes, heat as a senator on a number of issues sponsored legislation, mortgage bankruptcy -- caller: yes, i did here on npr this morning that in a couple of weeks it is expected that public-private partnerships are buying toxic assets is expected to go forward. some people are stepping up to that. it sounded more encouraging. i thought that might be helpful. it seems like a lot of people think we're rescuing banks when will we are trying to do is rescue the economy. during the great depression one thing fdr did not do was rescue the banks. i think that is what kept us from falling off a cliff. hosguest: the belief we have sen since last fall starting with
secretary paulson transitioning into the new administration was secretary geithner is that restoring liquidity in the financial system will have the effect of helping the broader economy. i don't think there is much disagreement about that, but there is a fine line. how argue help the banks -- how part to help them? of the last few years we have seen regulatory capture were there's always this difference -- there is always this difference for the banks were they leverage up to 100 times and create all this risk. help the banks but help everyday folks for this legislation. host: when congress had just returned to from unifying much
securities regulation under one regulator -- what can you tell us about that? guest: that will be really hard. politically, you have the securities exchange of one side and the commodities exchange on the other. you have derivatives, all these complicated financial products. you see the same things with banks. you have four or five different regulators, a patchwork of oversight, some good, some terrible. to unify them will be quite difficult. barney frank has already suggested that it will be difficult to merge these agencies, banking regulators. the framework we have seen sort of leaking out a bit from the administration, at least a floating around capitol hill talks about things they want to do such as merging the sec and fdic, and things there will not
be able to do. probably merging some of these agencies is not possible, but i think you'll see a more unified structure of regulation even if not in one agency. host: " the: "times" concerning this paymaster -- the strongest oversight with mr. feinberg --it will come from the administration's compensation czar. he will actively that all executive compensation changes at the companies that have received more than one taxpayer lifeline. he will also have the power to veto compensation without bailout money. on thursday the house financial- services committee will hold a hearing to examine how compensation practices contributed to financial collapse. this is broadening the scope to
companies outside of the ones having received financial rescue money. guest: yes, and from chairman frank, you will seek giving shareholders more rights. something for the past 25 years we have moved away from. shareholders have not really been the owners for the past 25 years. you will see more shareholder rights and shareholder flexing their muscles. host: next on our independent line. caller: good morning, i would like to ask the reporter with his general political philosophy is. today we cannot count on a lot of our main press to tell us just that -- they generally just have an agenda. number two, what i believe is going on is institutionalized class warfare. if we decide to have the
government set the standard of what people can be paid, that is the distribution of wealth. i don't think the capital system is made for that. also, i wanted to say that i believe the problem with the excessive pay going on is a lack of integrity of the people in the high positions, along with the cultural attitude that has been adopted for the past 20 years. all of these problems can be traced, the derivatives, and the excessive compensation, it can be traced back to congress and our tax laws. i would like to hear what the gentleman has to say. thank you. guest: congress has no intention of putting specific pay standards, by saying company x can only pay executives to
under thousand dollars per year -- that would never work. the outcry would be great. as much as the public -- and we saw with aig -- got very upset about executive pay, no one really wants the government coming in to set pay for everyone. that is a slippery slope. there is a general feeling that we should not -- like with the mortgage companies. where they have the pay structure where the mortgages you wrote as a broker and helped to close, the more pay you would get. you have no incentive in that situation to make sure that those mortgages are good. you're just try to get more. so, we want to create a system for that sort of behavior is not encouraged. that is the goal of the policy- makers are talking about. not having a situation where people are encouraged to have a
bad behavior. host: earlier the caller asked a question about the number of the czars. is there concern on capitol hill for the president appointing someone for this type of position and taking it out of the purview of congress? guest: that is a sneaky way to have someone who is the point person who's not really an appointed official. the senate does not have to confirm the auto czar, the pay czar, so, yes, it is taking executive power and using it. congress, with all the members in congress they have plenty of powers, subpoena power, to get this information. there's a hearing thursday and house oversight committee on the bank of america. the ceo ken lewis will be called up to testify.
congress still has the ability and a lot of oversight. host: to inverness, florida. caller: hello, i was wondering why gm does not look for merger instead of selling out hummer? as an executive branch maybe they could put a limit on the president's spending. as a veteran i can hardly afford to go to the movie theater. host: we will talk a bit more about the auto industry in an upcoming segment, but go ahead, if you would like guest: when the government rescued the auto companies the key was putting together a program to move the company's ford with a new slimmed-down structure. seen some of these brands sold off this week expected when they
received government host: aiaid. host: d.c. any parallels between the auto and -- do you see any parallels between the auto industries and of the banks? guest: there has been this belief that we have to get the banks going again, get liquidity back into the system. it will start with lending. we have yet to see that. banks, lending has fallen again -- which you would expect to see and a recession. host: this viewer asks if this is strictly an american concern? regarding specifically at executive pay. guest: all these financial firms are global. goldman sachs -- these