President Obama traveled to lower Manhattan today a year after the collapse of Lehman Brothers to argue that the administration’s response to the financial crisis has been successful and to pitch his plan to change the regulatory system.
“Although I will never be satisfied while people are out of work and our financial system is weakened, we can be confident that the storms of the past two years are beginning to break,” said Obama, speaking in Federal Hall on Wall St. “The growing stability resulting from these interventions means we are beginning to return to normalcy. But what I want to emphasize is this: normalcy cannot lead to complacency,” he added. (Read his prepared remarks here.)
While Obama asserted the necessity for government intervention in the financial system is “waning,” it’s worth noting that a Treasury Department report out today says billions more in taxpayer money may be needed.
The report says:
We must temper our desire to terminate our extraordinary financial support with the recognition that there is still a risk of market disruption that would have a significant negative impact on American families, workers, and businesses.
Obama, for his part, delivered a strong pitch for regulatory legislation this year:
I have urged leaders in Congress to pass regulatory reform this year and both Congressman Frank and Senator Dodd, who are leading this effort, have made it clear that that’s what they intend to do. Now there will be those who defend the status quo. There will be those who argue we should do less or nothing at all. But to them I’d say only this: do you believe that the absence of sound regulation one year ago was good for the financial system? Do you believe the resulting decline in markets and wealth and employment was good for the economy? Or the American people?
And he hit on his favorite theme — responsibility — for the Wall St. audience:
The fact is, many of the firms that are now returning to prosperity owe a debt to the American people. Though they were not the cause of the crisis, American taxpayers through their government took extraordinary action to stabilize the financial industry. They shouldered the burden of the bailout and they are still bearing the burden of the fallout – in lost jobs, lost homes and lost opportunities. It is neither right nor responsible after you’ve recovered with the help of your government to shirk your obligation to the goal of wider recovery, a more stable system, and a more broadly shared prosperity.
Several members of Congress and administration officials, including Paul Volcker of the Economic Recovery Advisory Board, were in attendance.
