The Real Economy

On bailouts, from Greece to Michigan

Jeremy Hobson Feb 21, 2012

Jeremy Hobson: Greece will get the money it needs to avoid a messy default next month. After marathon negotiations, European Countries and the International Monetary Fund have agreed to give Greece a fresh $170 billion. In exchange, Greece will make deep budget cuts and the holders of Greek bonds will accept significant losses on their investments.

Here’s the head of the IMF, Christine Lagarde, speaking today:

Christine Lagarde: We started the day at 2:30 with the debt-to-GDP ratio of nearly 129; we begin the day today at the debt-to-GDP ratio of 120.5. So significant progress has been made overnight.

And Greek Economist Michael Arghyrou of Cardiff Business School spoke to the BBC this morning.

Michael Arghyrou: If this program represents the kick-start of shifting or balancing toward more productive private enterprise, then it is a very, very likely that this will be the turning point where Greece will move away from an economy, 1970s style, into a modern, 21st century economy.

Now, I’ll bet you ten euros that the talk at Sweetwater’s Café here in Ann Arbor is not the Greek bailout — it’s more likely to be the auto industry bailout, which has become a major issue in the presidential campaign. Of course, we’re just a week away from the Michigan primary.

All four Republican candidates have said the automakers should not have been bailed out. Well, to begin our special coverage from Michigan of The Real Economy: What matters most in this election, we criss-crossed the state to ask voters what they think.

Matt Thaylen: I would say Michigan may not have survived without the auto bailout, and I think without it, the recession we had would have been even deeper. I think unemployment might have gone up to levels I don’t think anybody would have really realized were possible.

Claire Corr: You’re bailing out car companies when you got people that need jobs. You can open up other companies; help people that got small businesses, you know, do better and try to progress. Because a car company — they said it themselves, people aren’t going to stop buying cars. So I think that kind of was a waste.

Alex Aprile: Being from Michigan, I don’t want to see the car companies fail, but I don’t like that the government also got involved with helping a failed business. I mean, you wouldn’t expect that for your small corner shop, that the government should come in and pay for them to stay afloat.

Erica Gaskin: I think that was probably one of the best things that ever happened. President Obama, I commend him for stepping up to the plate and if that did not happen, there would have been thousands and thousands of people out of work — and then what would they have done?

That was Matt Thaylen and Claire Corr in Lansing, Erica Gaskin in Detroit, and Alex Aprile in East Lansing.

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