that were rich and large enough to retaliate. that is what is meant by commercial necessity. pbgc followed a process whereby they took over without any adjudication or outside review. they denied the opportunity to be representative for follow any kind of due process. our decades of efforts were considered to be without value to this administration. they kicked us to the curb. this administration's involvement from retirees who cannot protect themselves was political, illegal, unethical, and immoral. they have the ability to treat every worker in a fair and equitable manner. they still can. they will refuse to do so. the long-term effects of these decisions are horrendous. according to a study, every

year $1.6 billion of economic activity has been lost and will continue to be lost every year for the next two decades. clearly in violation of the requirements of tar. retirees have lost their futures. they will struggle to survive for the rest of their lives. they have lost insurance on top of reduced tensions. many cannot pay mortgages are put dickinson college. they have to compete for the same nonexistent jobs. one such person is with me here today. she has to deal with other issues including a husband who is fighting a disease. she and thousands of others are in an unsustainable situation. others have seen their homes for close. they have had to declare bankruptcy. some of seen families break up, or worse. this is shameful. it must be corrected.

we need to have your help to bring transparency to this issue. to reveal the records of the agreements that help some but excluded others. we need a fair and equitable settlement, especially the salaried retirees who depended on the government to live up to the promises. the administration believes we were too weak to fight back. this is an issue of right and wrong. we must not allow a president that allows the government to classify citizens based on their perception of political strength to stand, nor should we allow it allowed to be done -- excuse me, in such a non-transparent manner. we stand on this side of rights. we will fight. that is why we are here. >> thank you.

dr. >> thank you, mr. chairman. pointsng to make three in my testimony. government actions to restructure general motors and chrysler through the bankruptcy recension to avoid a potential second great depression and providing pressure an opportunity for firms to reemerge as world-class competitors in the global auto industry. support of the unions with ongoing relationships of gm during this restructuring process was critical to the survival of these companies and to the u.s. automobile industry. further support and cooperation is essential for gm as well as for our -- other companies for building a sustainable jobs and enterprises.

the specific provisions governing delphi were negotiated as part of a complex, multi issue agreement governing the creation of delphi in 1999 and in the restructuring during the delphi bankruptcy proceedings in 2006. to signal out and renamed on this position during the 2008 restructuring would have harmed the relationship between the union and the company. let me expand on these points a bet. the combined actions of the bush and the bomb administrations to support the auto industry is likely to be assessed as one of the most important and effective steps taken during that perilous time to avoid the great recession from turning into a depression.

the 3 million jobs saved in 2009 were probably expanded and subsequent years. the actions also avoided setting off a cascading set of costs and losses of revenues which would have resulted from increased employment costs between $8,000,000,000.19 $5 billion. -- $8 billion and $25 billion. it would have reduced revenues between $59 billion and $170 billion. the effects of the loans and the structural adjustment and the additional concessions from workers and creditors, the leadership changes put in place, and the joint venture with fiat, have positioned the

ottawa industry to reemerge as a competitor for the first time in a decade. the three companies are reporting profits. they're expanding capacity in hiring workers and are gaining market share. i emphasize the effects these actions on the entire industry because of the interdependence that exists across suppliers and dealers. the effect of the largest firm, general motors, entering a bankruptcy without a debtor in possession would have produced a long and uncertain restructuring process and a potential liquidation of the company. either of these outcomes would have spun off a chain reaction that would have brought down a significant number of automobile suppliers and harmed other assembly firms and even more dealers. it is the interdependence across

these assemblers and suppliers that has grown over the years as more output has been outsourced to the supplier. in 1980, it was about 1.2-1. jobs from the supplier base to the assemblers existed. in 2008, it has grown to 3.5-1. most of these suppliers provide components to multiple assemblers. delphi is a supplier of cockpits for a mercedes plant. mercedes' production would have been shut down. this is one example of this nature. ford would have been put at risk by an extended outcome of a g rm maker of seat. -- gm bankruptcy. ford used this time to build a

strong partnership with the uaw that will serve as a model for the years ahead. let me speak to the role in this industry. the survival of gm and chrysler require the support of the uaw. for these companies to prosper and build, labor-management relations will need to continue to be transformed. it is a process that began prior to the crisis. this emboss and not only keep economic concessions, -- involved not only deep economic concessions, but to engage in information sharing at the highest levels of the companies and unions. in 2007, prior to this crisis,

all three of the major companies in the united states agreed to restructure and lower the cost of health care, pensions, and cut wages of starting salaries in ways that matched their major competitors. each of these companies has also been working to engage its workers in building the knowledge base system that fosters intervention -- innovation. years of research and experience has demonstrated that to these companies and to the unions that they need to work together in leading and sustaining this kind of transformation. this issue of the top off, it is worth commentary. in the to be put into context. the negotiating provisions to protect its members, when delphi

was initially sold off from gm, the union recognized it was risky that they may not survive. as a response will union, it negotiated contingency provision to protect its members. these negotiations took place when delphi was forced to declare bankruptcy in 2006. it involves multiple issues and tradeoffs. by all of the stakeholders, future employees. >> i am going to ask you to finish. >> 30 seconds. tousing allow one provision -- to single out one provision would be inappropriate and counterproductive. there is a well-established provision of honoring contracts

to suppliers and other stakeholders with critical ongoing relationship wits with e company. i will close with one comment. the statement has nothing to say about fairness to the salaried employees. as an individual and a professor who studies and works with all segments of the labor force, i find it upsetting that the salary workers were left out of this process. my testimony has nothing to say about the fairness of that other than what i just referred to. >> thank you. >> thank you for having me here. i am a senior analyst at a nonprofit think tank. i have lived in the detroit area for the last 23 years. i am the only one who lives in michigan here on the panel. as a homeowner on the area, my state is tied to the auto

industry. i'm one of the many homeowners who are routine for the big three. i do not think the $95 billion that taxpayers have spent to bailout gm and chrysler has position them for success. taxpayers stand to lose $24 billion. there are least four hidden costs that will plague the economy. i will address each of them briefly. the most unfortunate aspect of the bailout is that it has undermanned -- undermined the rule of law. gm and chrysler did not have cash on hand to finance a chapter 11 bankruptcy. if the government did not step in and bail out the companies, they would face liquidation. many experts doubt liquidation was a plausible scenario for gm.

if it were, and they could not raise financing, there was an argument for the government to guarantee the loans to private lenders which would have been less than the bailout amount. then they could never let lot determine how much lost the stakeholders, unions, shareholders, would have to suffer. instead the administration wrote its own law as it went along, throwing out longstanding precedent. we talked about this earlier, and normally secured creditors are paid back on a priority basis. the government put unions ahead of them. the whole process was riddled with examples of unorthodox practices. it signals to future lenders

that they cannot count on the standing rule of law to protect them. the unintended cost of the bailout is the opportunity cost. one of the ironies is that it constitutes a missed opportunity, not a second chance, for gm and chrysler. it has prepared these companies to compete with the leaders of yesterday rather than those of tomorrow. automakers have been losing market share to foreign competitors even before the recession began. one reason was the labor costs. bankruptcy should have been an opportunity to rationalize their obligations to labor, clean up their balance sheet, and starrt afresh. toyota no longer -- smaller firms -- it is an open question

whether gm can compete in the future. gm did not get anything from its legacy costs'. without the bailout, these companies would have carried on in some form. they would let different from what they do right now. the bailout has in stock -- entrenched the status quo. the third big problem is that has unleashed a moral hazard that will weaken the market economy. in the two years prior to the bailout, gm had accrued $70 billion in losses. this was thanks to a bloated operation the supported a massive debt that was 24 times its market capitalization. it had no cash on hand for product development or to whether a rainy day. by contrast, ford laid-off workers, more is all of its

assets, including its holdings to make $25 billion for use in an economic downturn. the bailout rewarded gm's irresponsible behavior. any company and it feels it is too big to fail or is a national icon or is of major importance, will wonder what if it makes sense to hold out for taxpayer assistance. just as the wall street bela became a justification for the -- governmentt, help means government control. given the goals of the bailout are not identical to those of the company, it was inevitable

there would be political meddling in the operations of the company in the name of protecting jobs and so on. the wall street journal has documented what a huge role politics played in determining how many dealerships the companies would shudder. there are many other examples. the bailout has opened the door for a direct government involvement in private business that makes a mockery of the constitutional scheme of a government of limited powers. this might be the most damaging legacy of the bailout. >> thank you for your testimony. i grant myself five minutes. would you walk through the metrics of this intervention in the free market? i am trying to understand. there is a different way of defining success in the real world. the total investment from

taxpayers verses the total loss. >> i believe there was $50 billion invested in gm. that does not count some of the exemptions it has been granted. to offset losses, unorthodox provision was given. gm was also given -- the main reason was to help facilitate the sales of gm cars. my understanding is that there is a tax credit to purchasers of the chevy bolts. -- volt. it is probably higher than $50 billion. ipo.vember, there was thean

gm -- the government still holds the shares of gm. the price of gm stock needs to be about $53 for the selling of the shares. as of this morning, it is $30. it has been in that neighborhood for the past several months. the reason it is not going to appreciate any time soon is because the market knows that the largest shareholder of gm's stocks wants to dump about 500 million. that is keeping a downward pressure on the value. it is a safe bet that taxpayers will be stiff about $20 billion on that. those are just the financial costs. the other costs are rule of law, d nine the spoils of competition to companies like ford and honda, those are other

costs. there are plenty of other costs which are unseen. >> the total figure that you have come up with. >> right now, i assume there will be a sale of gm. the average price will be around 30's. taxpayers are out $12 billion there. then there are tax exemptions. $14 billion. some of that is then there's the $17 billion that to my knowledge has not been paid back. >> i do have a -- >> these numbers need some serious -- >> and the $7500 tax credit for

purchases -- i don't know whether general motors is going to be getting theirs but i believe he told the president we would buy 50,000 of these volts. but -- >> i'm a chevrolet dealer. the main purchasers of the volts are not the general public. and if it takes $500 of taxpayer money to make that car viable, that's probably not the kind of car you want on the market it's an unusual concept by washington, by the way. just one minute. i do find it unusual that we're going through the pains of the small banks. i mean, can you imagine any bank being able to walk away from a demrr 41 billion -- what

a great investment. only in this beltway do we come up with these type of metrics, and i think it's absolutely astounding that we can say that with a straight face. and in the ace of the coloradory, are we also taking credit for the cars sold in gentleman man? i think we're really making an unstable argument for the bailout. >> $41 billion is a good number to use as the total cost. but you have to balance that against two things. first just the numbers on the low end of the savings of unemployment insurance and other expenditures, the loss of revenue that would have extended to the government --

at the low end it comes to $82 billion, so you get really a 1-2. >> see i don't know that. >> a long, unstructured bankruptcy would have had substantial costs, and that's the low end. the liquidation costs would have been a factor of about $5 billion more than that. that is liquidation. this is a long, unstructured lt now the second thing that has to be considered here. and you know this as an experienced person in the industry, that the cascading effects across the industry would have been devastating, not only your dealership butos. not only delphi, but many other suppliers. ford 's c.e.o. testified that he would see his company at

risk. so we have to take an industry perspective -- i agree with my colleagues on the panel, we are not in the business of saving certain companies. we are in the business of protecting the economy and jobs and that's what is at risk. >> i appreciate the model you're speaking of. i believe there would have been survival of general motors in some -- so a lot of this is academic. >> let me finish. >> i'll come back to you. >> just to put this question of metrics in some con tex. in context. toyota and -- have lost some -- 1 nt 4% of their market share has been picked up by hundred day and can ia. and the bulk of it is by ford,

which is a non-bailout company. so however much we have spent has gone to protect about .4%. or .57 of chrysler. i just find it hard to believe that g.m. would not have survived at this stage of the game, you know, when car sales have been going up a little bit. this is all factualal, but i believe with dan that if we are going to credit chrysler and g.m. for saving jobs, we have to -- the fact that the pensions and wages have beenal protected at more than a competitive levelal suggests we have fewer jobs in the economy, because the worker costs of these is quite high. had we been paying them a little less, we would have been had more jobs.

>> the whole purpose of the hearing today is for the american public to understand where their dollars have gone. i do understand what we're talking about. i just don't understand why are these double losses protected? >> i'm sorry, you're asking? >> i'm saying we're given -- we're willing to write off -- >> i think mr. at kinson explained it. the real issue would be the stock value rises to the value to recoop the full investment, we would get it. but we can't control the stock market. i think the direct loans have been paid and there was a debate about where the dollars

-- the loans will be or have been repaid. it's the loss on the direct investment, if the current value of the stock -- i think that's the issue. >> and i would go back to the original purpose of the hearing today was to talk about the government injecting itself into a free market and whether the determine it right or wrong isn't for us to determine. it's for the people to determine and at the end of the day, did it do what it was supposed to do? i do know one thing. at the end of the day, every single penny came out of the taxpayers' wallet. and that's my main concern, and i just have this undying beef that free markets do depend on where he end up and that i

markets may rise and fall. and there's nothing more dangerous than try forecast what the future markets will do. i know in the automobile business, what looks hike a really smart move one day can look like a horrible thing the next day. gasoline that was $2.39 goes to $4.09 and a one-time stable market goes crazy. so the investment and taxpayer dollars and benefit, i think there's something to be said on both sides. having said that, and it's been a really long day. i appreciate you being here, and in the future i would appreciate you weighing in. i want to thank you for appearing. with that, we are going to adjourn. thank you.

dd >> next, chief justice john roberts on life on the supreme court. then live at 7:00 a.m., your calls and commevents on "washington journal." >> who would think a youtube rap video on economics would become popular. >> here we are peace out as you see we're not in a depression. more cain. we brought out the shovel but we're still in a ditch. still ticking. >> don't you think it's a switch from the hair of the dog? >> this weekend we'll talk to

the create ost of "fight of the century." >> we're trying to reach people who are interested in how the world works. fleast high school people interested in economics to the person making a living and trying to get along and worried about washington and the country. >> on c-span's "q&a." >> chief justice john roberts was the featured speaker at the court of appeals annual conference. he began on the case load and later took questions on his work and possibilities of the cameras in the courts. this runs about 50 minutes. >> good morning, i'm joe goodwin. district judge here in the southern virginia district. i trust you're having a wonderful and informative conference. we're going to begin this session with what the program

calls an informal conversation with the chief justice. i ask judge wil kinson about that. and he said, informal? informal in the sense that he and the chief justice would be sitting in wing backed chairs in dark suits before a live audience of about 1,000 people being televised on c-span. >> it is my high honor and distinct pleasure to introduce the chief justice of the united states the honorable john roberts jr. and -- credit >> good morning. good morning. thank you. thank you very much. [applause]

thank you very much. thank you for getting up so early today. i am delighted to be here. one of the great privileges of being the chief justice is that you get to be the circuit justice for the fourth circuit, tradition goinback to john marshall. the role of the circuit justice has changed dramatically since chief justice marshall crime. they no longer have to write circuit, that arduous process which began during the told the century, came over to the colonies with the english legal system. even though here, writing circuit was much more arduous given the greater distances and the greater dangers of travel. the system and fell into disuse after the efforts of 1891 which set up the intermediate courts of appeal system we have today and the practice formally ended 100 years ago this year, with

the judiciary act of 1911. since that time, we have worked out what strikes me as a pretty good deal. we wil stop -- we will leave you alone in you and by this to your conferences. before i join judge wilkinson, i want to make some comments. my colleagues and i heard 86 cases this year selected from more than 8000 petitions for review. as you know, the argument calendar runs from october to april. , we continued the practice of hearing more cases in the fall than we do in the spring and with the idea that it will give us the chance to start working on decisions rather than having th her distributed evenly throughout the year. the jury is still out on whether we will continue that practice going forward. as of today, the court has issued decisions in 82 of 86 cases that have been argued. we expect to release the last

four on monday. when i say we expect to release them, you can probably deduced that the expectations are pretty high since i am here. in this term, the fourth circuit did provide us with some interesting work. opec four cases from the fourth circuit, two affirmed than two reversed. that is not at all since we reverse more cases than we a farm. the fourth circuit did better than average in fact, i did it better than statistics suggested. i dissented in one of the cases reversing the fourth circuit. i think you should look at this as three were correctly decided and one was not. there are, though, two very gloating district court judges here who should be recognized for what you may call "the last laugh" award. these were judges who were

reversed by the court circuit but then were vindicated by the supreme court. in the last laugh in the janis capital and the stewart case. i dissented in the decision to reverse the fourth circuit. looking forward, by the time the dust settles on monday, we will have about the same number of cases going into october than we had last year. we saw the retirement of our good friend and colleague justice john paul stevens after 34 years of service on the supreme court and 45 years of government servicen total. he served our court with distinion and dedication, and i can assure you he is greatly missed by all in the court. while we had to sayoodbye to one colleague, we had the great delight of welcome. another. we are delighted with our newest

member, justice elena kagan. she was very familiar with the court's work and was able to hit the ground running offering seven majority opinions this year. i think anyone who follows the work of the court will agree that her opinions are clear and careful and your questions from the bench very incisive. i can tell you she is a very collegial colleague in our deliberations there is one area in particular were she has shown to be a great success. a newly arrived just as at the court is appointed by me to the supreme court cafeteria committee. next it is a way of bringing them back down to earth after the excitement of confirmation. shortly after she arrived, justice qaeda ansucceeded in getting a new frozen yogurt -- justice kagan succeeded in

getting a new frozen yogurt machines. no one can remember the prior justices on the committee doing anything. [laughter] i hope this is the loss, will have to comment on the supreme court renovation -- i hope this is the last time i will have to comment on the renovation project. it is nearly complete and under budget. right now, we are removing the construction barriers around the property, putting in landscaping, and then the court will once again be able to reclaim its status as one of the mosteautiful landmarks in washington. another sad point, as was mentioned, we have to say goodbye this year to the director of the administrative office, jim tough. he haserd -- jim duff. he served as an aide to chief justice warren burger and now the counselor to my predecessor, chief justice rehnquist, and

most recently as the director of the administrative office. jim has served with great distinction and will the minister. i, in particular, will miss his wise counsel on a daily basis. the supreme court, like the rest of the judiciary, and is facing increasingly difficult to budget constraints. we come at the court, are finding ways to do more with less. under the recent budget agreement for 2011, which began in october 2010, the court will operate under the same appropriations level of the previous year. the juciary will have a slight inease in funding to meet specific needs including the cost of defender services, security, and jury fees. i very much appreciate the judges and administrative support staff of the fourth circuit in running a very efficient court system in the face of an ever-increasing

pocket. -- docket. i will work closely with the administrative officer to ensure that the courts of adequate funding to carry out their vital business. and i am very grateful to the judges and administrative staff of the fourth circuit, my circuit, for the sacrifices they make for the good of the courts in to help sustain the real flaw in our country. i am also grateful to the members of the bar, those in public and private service, for rockbridge and for recognizing that they serving clients but also as officers of the court. now, i would like to turn to a grilling from judge wilkinson. thanks. [applause] thank you. >> cheese, welcome to the fourth

circuit. -- chief, welcome. i want to say you wrote a great dissented it had nothing to do with the fact that it was my case that was reversed. it is such a pleasure. this has been a difficult conference because virginia and south carolina have faced each other in the college world series. we will not inquire about the outcome of last night's game. it is such a pleasure to have you here, chief. i know i speak for the entire federal judiciary when i say how much we appreciate the dedication and the leadership and the sterling character, craftsmanship, warmth, and humor. >> i like this dcussion already. [laughter] >> and judges of all persuasions rely appreciate the leadership that you are giving

the judicial branch. it has been, ihink, almost six years since he were confirmed in august 2005. i was just wondering if looking back, is there any one thing, one event, one opinion, one moment that more than any other stands out from the rest during those first six years? >> it is hard to pick just one. if i had to, i would say it is a moment, not on the bench. i do remember, and i always will committee first time i presid over the court. justice o'connor on my left and justice stevens on my right, both of whom have since

retired, but i would say the most memorable moment was my first time in the conference. the work of the court is, in some respects, very public. the arguments are in public and open to anyone. our decisions are there for everyone to see, but the deliberations of the justices are in private. even some who have been around the court to not have a good sense of what goes on. i certainly did not. i was going in to participate and was also expected to at least get the discussion -- discussion rolling. i did not know quite what to expect, but the level of discussion, the level of analysis that my colleagues were prepared for, and there were prepared to present their views in a coherent way. the interaction between the justices was at an extraordinarily high level and

inappropriate degree of collegiality but reflecting the fact that these people who have looked at so many different authorities it came up with different views and interested in explaining those in the conference room, on one side of the table we have the u.s. reports and on the other side the u.s. code. people will get up, pulled the books down, and they will check their points. i looked extraordinarily impressed by the process that went on there and appreciating the great challenge would be to participate at the appropriate level. >> it is interesting. conference as are talked about a cut and dried affair were you announce a formal reverse and there is not much discussion. i gather your sense is that there is a lot more interaction and is publicly known. >> at various. -- it varies.

by the time you have read the briefs and the arguments, sometimes it is cut and dry. sometimes there is conflict with the courts of appeals, that discussion and conflict in the lower courts to make it clear what we think the right result is so we will not spend hours pondering every case, but others present are difficult issues even wn the outcome is clear. the ground of a decision can be the subject of a discussion. >> i have often wanted to ask you about the restrictions on the judicial life. there are smany things we cannot do, and that goes ee and a.a.a. for copper -- doubly and triply for the chief. we cannot do fundraising and we stay away. we have to be circumspect about the friends that we can hang around with, particularly when

they have cases around the court. we have to be model citizens, or at lea try to beat in so many ways, and you and i are probably the only individuals on this planet who have a dark suit and tie on saturday morning. we could not even if we wanted to go out for a while light on the town. -- wild night on the town. those this monastic existence-- does this monastic existence began to bother you and where i knew a little bit? >> i was not known for wild nights on the town before. [laughter] what every think of the confirmation process, it tends to weed out to.

as you probably know, it is not as bad as all of that. i do not wear a dark suit and tie when i got my kids soccer games. i think a lot of us develop particular areas where we have to extracurricular activities are focused and some people do not even know that you are a judge and that is comfortable. no, it has not bothered me that much. you get a great opportunity, if you are going to have a wild night on the town, you can have it at the greenbrier. >> we all get a lot of criticism over our cases and it obviously comes with the territory when you are a chief justice and the importance of the case is that there will be a lot of criticism.

in politics, it is so satisfying to be able to fire back if someonsaid something that you did not like. you could always pontian them back. -- punch them back. hear someone can miss categorize something you haven't gone and say, "i did a first grader would have written a better opinion than you did come close "and i get those types of letters. i hope you do not get those typeof letters. but when i wasn a newspaper editing, i got paid to say what i thoug, and when i was a judge of got paid to shut up. we are living a life of "no comment" in terms of the criticism that pours in. does it bother you never to be able to respond?

>> first of all, a lot of the iticism comes from our colleagues in a dissent or a response to a majority opinion, but the answer is no. once appreciate that the citizens have a full right to criticize what we do and always have so that is not a new phenomenon. want to appreciate -- once you appreciate you are limited to the four corners of opinion that reflect your view of the law and that you're not supposed to get into the partisan bickering. there is a real difference in terms of perspective. i think a lot of the criticism is focused on a particular moment. judges have a different perspective. why a man little more worried, concerned, focused -- i am a little more worried, concerned about what people with inthink f

my work in 25 years. if there is an immediate response, we have a different stand it. >> let's talk about law clerics, if we may. they are some of the most dedicated young men a women everywhere, yet i think it would surprise certainly the future leaders of our profession and a good many members of the public to know that your chief legal assistance are four 20- somethings. many people would assume they many people would assume they are people with many,