President Obama on the Economy: Middle-Class Issues Drive My Agenda
Marketplace host and senior editor Kai Ryssdal sat down for an Oval Office interview with President Barack Obama on July 2, 2014:
President Obama: . . . first of all, people took a really big hit in 2007, 2008, 2009. We had the worst recession since the Great Depression. In some ways the contraction was even sharper than what happened in the late 20s and 30s, so people have still been in recovery mode throughout this period. In some cases they've gotten back to square one, but that doesn't take away some of their long-term worries about retirement or saving for their kid's college education. The other thing that we've seen is that although the economy has been growing, wages and incomes continue to be relatively stagnant, and that's been a 20- to 30-year trend, and that involves some structural issues that we've really got to work on. But, having said all that, what is indisputable is that the economy is much better now than it was when I took office and than it was the last time we spoke, and that does make a difference. It makes a difference that we've created 9.4 million new jobs, it makes a difference that manufacturing continues to strengthen for the first since the 90s, it makes a difference that we've been able to slow the rise of healthcare costs, it makes a difference that we have seen housing recover in many communities so that people are finally getting their houses back above water. So all these things add to confidence, add some momentum to the economy, but that underlying trend for middle-class families -- that they don't feel like no matter how hard they work, they're able to get ahead in the same way that their parents were able to get ahead -- that's something that we continue to tackle and drives a lot of my agenda now.
President Obama: . . . there's some things we could be doing right now that would make a huge difference. When I was at that bridge in Georgetown, Washington, D.C., yesterday, we were talking about the fact that we've got $2 trillion of deferred maintenance: roads, bridges, an air-traffic control system that's creaky, an electrical grid that wastes too much energy and is highly inefficient, and we could be putting hundreds of thousands of folks back to work right now and not only put a big boost to the economy in the short term, but also lay the foundation for economic competitiveness in the long term. That creates a lot of middle-class jobs. The challenge we have is not that we don't know what to do. The problem is that we've got a Congress right now that's been saying no to proposals that would make a difference. And so, part of our task this year and perhaps next year, is to look at what can we do administratively, or by partnering with states and local governments or by partnering with the private sector to boost wages, to improve job training so that people have better skills, to make sure that we're matching up jobs that are out there with people who are looking for work. And a lot of those steps are ones that are reflected in my budget and my agenda.
President Obama: . . . keep in mind that the goal of Dodd-Frank was to prevent another catastrophic financial crisis. It wasn't expected that it was going to solve all the problems -- I mean, the fact of the matter is, for example, we have massively increased the capitalization requirements in banks, and what that means is that they've got more of a cushion. If they screw up and make a bad bet, they are less likely to need to be bailed out because they've got to have a certain amount of capital on hand. We have mandated that they all have what we call living wills, so that if they do screw up, there is an orderly process of winding them down, and their creditors and shareholders are taking hits, so that taxpayers don't have to do so. The consumer finance protection provisions in the law make a big difference in preventing ordinary families from being taken advantage of by predatory lenders of the sort that helped to cause the crisis in 2007, 2008. So, those aren't small steps, those are big steps, and relative to what's been done in other parts of the world, we are way ahead in terms of regulating the financial sector. Here's the problem, the problem is that for 60 years, we've seen the financial sector grow massively. Now, it's a great strength of our economies that we've got the deepest, strongest capital markets in the world, but what has also happened is that as the financial sector has grown, more and more of the revenue generated on Wall Street is based on arbitrage -- trading bets -- as opposed to investing in companies that actually make something and hire people. And so, what I've said to my economic team, is that we have to continue to see how can we rebalance the economy sensibly, so that we have a banking system that is doing what it is supposed to be doing to grow the real economy, but not a situation in which we continue to see a lot of these banks take big risks because the profit incentive and the bonus incentive is there for them. That is an unfinished piece of business, but that doesn't detract from the important stabilization functions that Dodd-Frank were designed to address.
President Obama: . . . Right now, if you are in one of the big banks, the profit center is the trading desk, and you can generate a huge amount of bonuses by making some big bets; you will be rewarded on the upside. If you make a really bad bet, a lot of times you've already banked all your bonuses. You might end up leaving the shop, but in the meantime everybody else is left holding the bag. Now what we've been able to do is to try to prevent taxpayers from being the folks who are left holding the bag. But it's still not a real efficient way for us to run a financial system. That's going to require some further reforms. That's going to require us looking at additional steps that we can take. But keep in mind that one of my key focuses over the last couple of years has just been to make sure that we've got a circuit breaker so that if certain banks are making bad decisions, they are less likely to bring down the entire system, which is what happened in 2007, 2008 . . .
read full transcript of interview: http://www.marketplace.org/topics/economy/obama-middle-class-issues-drive-my-agenda
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This is the inequality in the country (and it's arguably even worse now - these numbers are 7 years old at least):
removing folks like Arne Duncan who are only interested in privatizing. That is yet more money being driven into the market.
* post offices - we want them. we don't want to pay $25 to UPS everytime we need to mail a bill
* public schools - we want them. making Pearson LLP richer & richer via standardized testing has nothing to do with education children and needs to be taken off the priority list where it now
resides
* social security - we want it. we need it. we do not want yet more of our $$$ (the little we have left) given on a platter to wall street criminals to steal
* infrastructure - we need it. no more fancy complexes in Iraq while we go hungry here at home. bring the military home and fix up our own country
* single payer health care - the ACA has been an improvement for some but we need an overhaul that covers everyone and cuts the middle men (insurance companies) out of the process
* taxes on corporation - raise them. that's right - you heard me.
