Obama on Gas Prices: From Shock to Trance

In his first televised interview since winning the election, President-elect Barack Obama spoke with Steve Kroft of CBS’s 60 Minutes about the potential bailout of the American auto industry. He also reminded the American people about the importance of breaking from their addiction to oil—despite the recent and dramatic drop in prices at the pumps.

Kroft: You have a situation right now where you have General Motors, which is in dire straits.

Mr. Obama: Yeah.

Kroft: May run out of cash by the end of the year, maybe by the end of certainly, if we believe what we read in the papers, by the time you take office.

Mr. Obama: Yeah. Well, let’s see how this thing plays itself out. For the auto industry to completely collapse would be a disaster in this kind of environment, not just for individual families but the repercussions across the economy would be dire. So it’s my belief that we need to provide assistance to the auto industry. But I think that it can’t be a blank check.

So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all the stakeholders coming together with a plan. What does a sustainable U.S. auto industry look like? So that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere. And that’s, I think, what you haven’t yet seen. That’s something that I think we’re gonna have to come up with.

Kroft: Are there a lot of people that think that the country would probably be better off and General Motors might be better off if it was allowed to go into bankruptcy?

Mr. Obama: Well, you know, under normal circumstances that might be the case in the sense that you’d go to a restructuring like the airlines had to do in some cases. And then they come out and they’re still a viable operation. And they’re operating even during the course of bankruptcy. In this situation, you could see the spigot completely shut off so that it would not potentially permit GM to get back on its feet. And I think that what we have to do is to recognize that these are extraordinary circumstances. Banks aren’t lending as it is. They’re not even lending to businesses that are doing well, much less businesses that are doing poorly. And in that circumstance, the usual options may not be available.

Kroft: When the price of oil was at $147 a barrel, there were a lot of spirited and profitable discussions that were held on energy independence. Now you’ve got the price of oil under $60.

Mr. Obama: Right.

Kroft: Does doing something about energy is it less important now than…

Mr. Obama: It’s more important. It may be a little harder politically, but it’s more important.

Kroft: Why?

Mr. Obama: Well, because this has been our pattern. We go from shock to trance. You know, oil prices go up, gas prices at the pump go up, everybody goes into a flurry of activity. And then the prices go back down and suddenly we act like it’s not important, and we start, you know filling up our SUVs again.

And, as a consequence, we never make any progress. It’s part of the addiction, all right. That has to be broken. Now is the time to break it.

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  • Bryce

    Thank you Mr. President Elect.

  • Skeptic

    Of all the things on the new President’s plate (i.e. recovering the nation from 12 years of Republican rule), it’s energy that’s the Big One.

    If we can get energy and its close cousin, transportation, figured out a lot of the other stuff follows behind.

  • Need2Change

    And unfortunately, the best way to influence car buyers and manufacturers is to raise the price of fuel. Now is the time to add $1.00/gallon federal tax to diesel and gasoline.

  • Jeff

    You’re all right. Getting us off our collective duffs to do something about energy has to happen now. I have waffled on the issue of setting a minimum cost on gas and other forms of energy but I think that it is time to do it. For those who are unable to afford the increased cost/tax return it to them in the form of tax relief or better public transit systems. It is the only way to wean us off foreign energy and bring us to a more sustainable future.

  • Will S

    Thank God we have a president-elect who understands the situation, for once.

  • 38mpg

    Congress need to make the gas tax a percentage with a floor as a $. Say tax is $1 or 30%, which ever is higher. Clinton put a 18 cent tax on gasoline, and that amount is now inadequate to repair our highways.

    And unfortunately, the best way to influence car buyers and manufacturers is to raise the price of fuel. Now is the time to add $1.00/gallon federal tax to diesel and gasoline.

  • Anonymous

    I love the way “that one” always looks long term. No auto bailout without a plan for a sustainable destination… no letting up on energy reform just because prices are down today…. the next eight years are going to be amazing.

  • Anonymous

    Right now is when we should topping off the SPR and then some…

  • David

    Oh my god. It’s about time.

  • Messiah

    Yes, You’re all right. I will save all of you inept people. I will rescue you from yourselves since you can’t do anything without government help. Maybe if we triple the size of government, we’ll get that done. I may even chip in some of the 14 million I took from the Fannie Freddie deal.

    Thank you for your support.

  • Samie

    Glad to see people are not as nasty as earlier.
    Never understood why so many are always fixated on the price of gas? To me that is one of the biggest problems of peoples thinking. We build more fuel efficient cars (all models) that absorbs more of the fluctuation in prices instead of creating greater divisions and hardships among different folks in our society.

    Sarcasm Messiah? Lets hope so….

  • Messiah

    Sarcasm? Please explain. This country has gone to the birds. Everyone looking for a handout, help with their income due to their lack of drive. This once great country has CHANGEd for the worse. It’s not going to get better until people start taking responsibility for themselves.
    I guess one problem is solved. People from all over the world will stop coming here for a better life.

  • Samie

    Someone is McGrumpy :((
    8 years one way maybe 8 years another way lets let history decide….

  • Jeff

    Messiah says,

    You are a grumpy bear. Sounds like you are also one of the historical revisionists too. Let’s see, how did we get out of the depression? How did we build the nation we have today. I do not remember the unfettered free market economy doing it on its own. It required a lot of guidance.

    Oh ya, and the greatest generation was lead by whom? Not a Republican.

  • perfectapproach

    I’m generally against a bailout of private companies in general, because I believe the free market will pick up the slack… if GM goes under, Ford and Chrysler will certainly benefit from this. The remaining companies would in turn be able to hire some of those displaced GM workers, and the ball keeps on rollin’. GM deserves to go under because of its own failure to keep up with the times anyway.

    However, considering that 1) GM is a really big company that contributes fairly significantly to the nation’s GDP, and 2) their failure would affect more than just the workers and the GDP, but would affect all of GM’s suppliers and their workers, and would cause a HUGE problem for the economy, I feel the government has some responsibility to help GM survive.

    As such, I’m glad that Mr. Obama isn’t diving blindly into a bailout program. It is obvious that he does truly see the big picture. The only way I would support a bailout program of the sort being considered right now is if someone has a very good grasp of all of the ins and outs, and I believe that Barack Obama has just that. It’s almost encouraging…. When’s the last time you guys ever felt optimistic about a President?? What a strange feeling….

  • Messiah

    Jeff says “If I only had a brain”

    Are you people real? Blind faith will get you nowhere.

    I think I’ll write a book ” The Audacity of False Hope”

  • Gerald Shields

    The man “gets it”. Moreover, though gas prices went down, it’s still about an average of $1.50 per gallon up. Hate to say this, but keep avoiding that pump wherever and whenever. Ride a bus or a train; ride a bicycle to work ; carpool and whenever possible endorse MORE MASS TRANSIT! If the automakers can’t get us hybrids then we should protest by doing what I’ve described above.

  • Gerald Shields

    Are you on crack Messiah?! True this country has gone to the birds, but it was George W. Bush that bought us there. I’ve never seen so much Republicans turn Democrat in my life! Fat cats who was funding these politicians now declaring bankruptcy and yes, corporations, banks, insurance companies begging for handouts! The Mighty General Motors holding out their hands to say, Brother, can you spare 50 billion! And it’s all because you and your conservative friends backing the current President, even though the “wimpy liberals” kept warning ya’ll and warning ya’ll that you are backing a loser. Now, it’s as the famous Sam Laurel once said, “This is fine mess you’ve put U.S. in!” Not to say that Obama going to get us out of this mess, but at least on next Jan 20, someone sane is going to run this country!

  • DJB

    Let’s all calm down. The world isn’t going to end if an auto company goes into bankruptcy. We need to use public resources to help the economy in a way that is fair, and solves another problem at the same time.

    Let’s pay people in Detroit to build windmills that help the environment instead of SUVs that are destroying the environment.

    An earlier post had it right. Obama talks about energy independence but he won’t do the one thing that would really guarantee it: a carbon tax.

  • RandalH

    I read through the comments before reading the article. Based on those, I thought that Obama surely must have said something earth-shattering. Upon reading the article, I find there’s nothing there at all. Even Bush has said a thousand times that we are addicted to oil. The important thing is what he plans to do about it.

    I agree with those who say that gasoline taxes should be increased to maintain a steady decline in oil consumption. After all, we have consumption taxes on all sorts of items toward which we wish to change behavior, such as alcohol, cigarettes, etc. I think the problem is that Obama got elected primarily by promising tax cuts to the middle class. Increasing gasoline taxes will go directly against that promise and put his presidency on the wrong footing right off the bat.

    As for Detroit, if these companies are not allowed to fail or at least reorganize through bankruptcy, the future of any automotive innovation in this country is in doubt. Far better to give any bailout money to startups that have some chance of putting it to good use.

  • Messiah

    Gerald, are you forgetting all the wonderful things that Dodd and Frank did for us (both dems). Bush was abysmal as a president and did many questionable things, but he also put in place 12 billion to promote hybrid technologies, only to have Obama take credit for it after the election. This is not about Right or Left, it’s about making tons of promises that can’t be kept, and slinging enough B.S. to fertilize a large farm. Obama is a good speaker, or is it “speaks gooder”.

    We’re going to end up bailing out Detroit because the simple fact is: it’s going to cost more if all those auto workers hit the unemployment lines, welfare lines, and hospitals after they get canned. After we complete the bailout, we’re going to have Nancy Pelosi and her club designing cars for us. Rest assured, they’ll tell the auto makers exactly what kind of car should be built and how to do it.

    We need to get the auto makers to build what we want by voting with our dollars, not forcing them to build a Pelosi mobile.

    I am very skeptical and believe me, I hope I’m wrong!

  • danielk

    I say let them FALL! if you can inovate and adapt to the market you go out of business. This is basic capitalism. if your going to give money to anyone give it to the Co’s that inovate such as Phoenix, miles and tesla, let them be the next “big three”.

  • Messiah needs a reality check

    “After we complete the bailout, we’re going to have Nancy Pelosi and her club designing cars for us. Rest assured, they’ll tell the auto makers exactly what kind of car should be built and how to do it.”

    Riiiiiiiiiiiiiiiiiiiiiight …. I know that all they have said is that they want progression towards higher fuel efficiency and a solid plan to increase the profitability of US Auto manufacturing before they think about a bailout (why read, it’s so darn hard you betcha)….. I could see how you would take some of those comments and stretch them to Nancy Pelosi becoming the next automobile designer.

    Dude – the Joe the Plumber decoder ring was a joke – you aren’t supposed to use it for real.

  • bill cosworth

    Bailout is the only way to keep the USA manufacturing

    or the Chinese will by GM

    Toyota is evil horrible company.

    Its so funny people forget Toyota makes cars like the tundra to level Detroit cars.

    The tundra gets 12 mpg

    So Toyota makes the prius they are taking you to the bank with every other model. GM makes more models that get 30MPG or higher than Toyota.

    So GM is more green than Toyota by far.

    The Toyota Lexus hybrids totally suck they are 400 hp get 19 mpg worse then the GM SUV hybrids.

  • Shines

    I voted for Obama and I agree with his comments in the article above. Messiah, Thank you for your comments. I think your perspective is valid. I also see that Obama is one man and he does not run the government. I believe he will provide intelligent leadership. I hope he can communicate well enough to prevent congress from over regulating. Regardless, the challenge is huge.
    bill cosworth, saying it doesn’t make it so. People are buying the cars that provide the best value to them.
    I don’t have to mention any car manufacturers. People don’t want cars that get over 30 mpg if they start rattling at 12000 miles and knobs start coming loose or falling off, cup holders break, water pumps or brakes need replacing etc. within 3 years.
    Quality and reliability are more than the engine lasting 200000 miles or just getting 30 mpg…

  • Messiah

    People are comical ! Most of you are missing the point.
    Bailing out these car companies is just is killing the initiative in this country, and enforcing a poor business plan that has obviously failed. The capitalist foundation is what made this country strong, but we’re not nearly as strong as we used to be.

    On top of that, it appears the majority wanted CHANGE without taking into consideration that CHANGE could also be for the worse. If you don’t think that one person can turn things upside down, look at the Johnson administration. He could have possibly screwed this country for good.

    My final word, there was only one Democrat worth a shit was Harry Truman. He said “My choice early in life was either to be a piano player in a whorehouse or a politician.
    And to tell the truth, there’s hardly any difference.
    I, for one, believe the piano player job to be much more honorable than current politicians.” The Obama campaign is not much different than Microsoft. Spend millions of dollars on advertising to make everyone think your crappy product is something we need. And people bought into it.

  • Pablo

    Could their bosses resign and return their bonuses for the last 10 year due to lack of strategic thinking and lack of vision for the future and then the companies being bailed out.

    How to bail out the workers under new companies and new leaders?

    They are like my teenager who did not study mathematics because it does not bring instant gratification, not even near term gratification, and now in a long term he is going to regret.

  • McGarv

    The greatest generation was made great through tough time and a work ethic, not by a Socialist. Talking about revisionist history. FDR’s programs only made the Depression worse, and what ended the Depression was WWII. What started it was high taxes and high tariffs. And the government comes along instead of freeing private capital, it pumps money into public work projects. Nothing gets done well if controlled by the government!! So now we need the government to redistribute wealth, and tax a comodity that fuels our economy for good (or you think for bad). All parts of the economy were dying: truckers, food prices, etc. Everyone especially the poor suffered, so let us put additional cost on the consumer????? If we want to get towards alternative fuels let the market steer it. If you build a better mouse trap, the world will beat a path to your door. If you have a new hybrid engine, that works well, then the consumer will buy it. If the government wants to help then get out of the way. Reduce taxes on capital gain (will increase investments), reduce corporate and small business taxes, make it cheaper to compete and invest in the future. We need domestic sources of energy (including domestic oil). How can we sustain capitol for alternative energy supplies under an economic cloud????
    I don’t think for your information that GW Bush has acted much like a Republican lately (at least a conservative). The Democrats (again for your information) got us into the other problem with the economy (toxic mortgages). They did not back any oversite that even McCain called for in 2005.

  • Pablo

    “…If we want to get towards alternative fuels let the market steer it. “

    Dear McGarv,

    I agree with you.
    Let’s do it:

    1. Take the subsidies from Exxon Mobil;
    2. Take of the experiences for the “normal” military presence in the Persian Golf from the federal budget and add them to the crude oil;
    3. Do the same with the additional expenses for the war in Iraq;
    4. Put price on the air pollution and the associated health care cost and add it to the price of the cars and the fuel;
    I like to run – pay me personally for the bad air;
    5. Put price on the strategic risks and add it to the fuel.
    6. Do the same with the global warming.

    Now you have fare market prices – let the market work.

  • Pablo

    Please read “Persian Gulf” instead of ” Persian Golf” above.

  • Consummate Skeptic

    To Messiah:

    There is no point trying to convince many of the people who post comments in these forums of anything of a political nature. Instead of talking about electric cars and how things are progressing, they twist the argument to push for subsidies for vehicles that are not economically viable. Since logic does not work on many of these people, there is no point trying to refute their points logically. They will just shout you down. I have actually met people like this and discussed political ideas with them. I have found that when you nail them on a point they either respond by saying “Bush lied, people died” or by changing the subject.

    I suggest that we share information of companies or ideas that are succeeding and not argue politics here. Is is doubtful that anyone will be persuaded by a post in these forums to alter their political view of the world. I know that I should just swear off reading the comments that people post, but I keep hoping for additional information about electric vehicles, not political diatribes. Silly me!

  • Messiah

    You’re right Consummate Skeptic, I’m sorry.
    It’s just that when I first read the comments in here, I could almost hear the screaming and chanting for Obama. I had to rinse my mouth of the vomit.
    Just a bunch of naive blind followers !

  • AP

    So ….. socialism is good when we make other people buy the cars we want them to buy,


    it’s bad when we bail out companies, even if it’s for the greater good.

    These sound likes comments from REAL democrats.

  • Ross Nicholson

    Most people seem to think that American car companies have been badly led. This is simply not the case. These are some of the most successful companies in the history of the world. We need to keep in mind that the current general economic slump and recent gasoline price volatility were not of the car companies’ making, nor were these exaggerations reasonably foreseeable. Recent events have put the future of these companies in our good government’s hands. Having opposed, but also heard and listened to President-elect Obama over the course of the last two years, there is no reason to worry. I have every confidence that his will be the wisest path and that peace and prosperity will soon return to America. Our car companies, native born and foreign owned, will survive this turmoil without trouble. Recriminations and panic will recede. Oh yes. America will ride again!