CNBC "CNBC Reports" Part II - Transcript

Interview

MS. BURNETT: John Harwood, as promised, with much more of his exclusive interview with the vice president.

John, I know you talked to him about, well, corporate jets and cars and China and a whole lot more, so take it away.

MR. HARWOOD: Trade, industrial policy, the whole ball of wax, Erin, and we started off the chunk that we're going to see right now. When I asked about the comments that Treasury Secretary Geithner made in testimony before his confirmation and I asked Joe Biden, is China a currency manipulator?

VICE PRESIDENT BIDEN: The policy of this administration is going to be to say to China, which occasionally the last administration was reluctant to do, you're a major player on the world scene economically and you've got to play by the rules that everybody else plays by, not more stringent. We're not going to impose on you or attempt to impose on you restraints that benefit our economy inconsistent with trade, international trade agreements that exist.

The term that got everybody upset was manipulation. There's been no judgment based in the administration that there has been a manipulation because as you know that word triggers within trade agreements certain responses, but it is clear, it is clear that there has been a policy on the part of the Chinese government that I would argue is inconsistent with their long-term economic well being, of having a total export economy here and doing things that guarantee that that promote that. Understand their problem. They've got to create 20 million new jobs a year to keep from falling behind, but it's not sound world economic policy and so we're going to be, in that sense, blunter with the Chinese about -- you're in the deal, you play by the rules.

MR. HARWOOD: What about consequences of the kind the past administration didn't support that your old colleagues Lindsey Graham and Chuck Schumer have talked about?

VICE PRESIDENT BIDEN: Well, that requires a determination that there is, quote, "manipulation." We've not gotten there yet.

MR. HARWOOD: Is a so-called bad bank to pull up bad assets on the books of many financial institutions, is that a good idea?

VICE PRESIDENT BIDEN: Look, the president, and to some extent, I, we put ourselves on the line to get another $350 billion for an acronym that no one in the public understands, the TARP, meaning that money to infuse into our banking system to get credit flowing. An economist that works for me, Jared Bernstein said, you know, it's kind of like if you think of an artery, you have all this plaque build up in the artery because the diet has been really bad and you've not been taking care of yourself and that constricts the flow of the blood. Well, that's what's happening now. There is a constriction of flow of credit to normal people, normal credit, people being to able to go, you know, a small businessman keeping their inventory, being able to borrow money to send your kid back to college, being able to borrow money to buy a car or if you're in a position to buy a home in this economy.

And so we want to get that flowing. We have to, in order to do that, spend this $350 billion much more wisely. It's got to be transparent. It's got to be accountable. Once we do that and see whether or not we can get this system kick started, the credit system flowing more, that's when we'll make the judgment whether or not anything else is necessary.

Now, I would be lying to you if I didn't tell you, Secretary Geithner, who is one of the most respected guys in the country, not just because he's Secretary of Treasury, he is, I'm sure, I hope, he is considering all alternatives, what happens if this works and it unclogs the artery more quickly than we think, what happens if it doesn't work? Those decisions have not been made; we're going to wait to hear first expend it more wisely and prudently and transparently, and look, the other thing that happened, I promise you, there aren't going to be many $40 million jets being bought. There's not going to be expenditures of bonuses going, I mean, they've spent outrageous, I mean, it's just --

MR. HARWOOD: Fact of rehabilitations --

VICE PRESIDENT BIDEN: Yeah, I mean, it just offends the sensibilities, I mean, I'd like to throw these guys in the brig, I mean, it's just -- I do know what they're thinking and they're thinking the same old thing that got us here, greed. They're thinking take care of me.

MR. HARWOOD: And so, Erin, there's going to be a lot more of this interview tonight at 8 o'clock on CNBC Reports and among the other things that Joe Biden was saying, he's a strong advocate of the Pittsburgh Steelers in the Super Bowl and those comments he made about the outrageous -- he perceives in the expenditure of that TARP money, right now, Robert Gibbs, the White House Press Secretary, is echoing those same comments from the podium of the press briefing saying, President Obama considers those expenditures outrageous.

MS. BURNETT: Yes, some of those headlines from Mr. Gibbs are crossing right now. All right. Well, thank you very much to John Harwood, and as John indicated, there is a lot more of that interview to see and you can see all of it tonight on CNBC Reports between 7 and 9 o'clock Eastern Standard Time.

END.

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