Obama: Wall Street Owes A Debt To American People
President Obama's "major speech" in New York this afternoon was less about unveiling new policies as is was about urging the financial sector to, one year after the collapse of Lehman Brothers, act responsibly to avoid future crises.
"The reforms I've laid out will pass and these changes will become law. But one of the most important ways to rebuild the system stronger than before is to rebuild trust stronger than before -- and you do not have to wait for a new law to do that," Obama said, speaking at Federal Hall in the heart of New York's financial district.
He said the economic crisis came about because of "a collective failure of responsibility in Washington, on Wall Street, and across America." But Wall Street owes a particular "debt" to the American people, the president argued, as some firms begin to show profits again.
"Though they were not the cause of the crisis, American taxpayers through their government took extraordinary action to stabilize the financial industry," he said. "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."
Speaking about the state of the economy, Obama said that there is a "return to normalcy" occurring as a result of the government's intervention. "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," he said.
But "normalcy cannot lead to complacency," he added, and he criticized those who he said are "misreading this moment" and have returned to the "reckless behavior and unchecked excess" that spurred the crisis. "I am convinced they do so not just at their own peril, but at our nation's," he said.
Obama urged Wall Street to work with Washington as they work on financial reforms, to "join us in a constructive effort to update the rules and regulatory structure to meet the challenges of this new century."
On hand for the speech were Treasury Secretary Tim Geithner, White House Council of Economic Advisers chair Christina Romer, members of the president's Economic Recovery Advisory Board, and some of those members of Congress who will handle the reform effort.
More intriguing is a meeting likely occurring as we write: lunch, between Obama and former President Clinton. The two appear to be developing a relationship (we hazard to say "close relationship" yet) after what was a tense campaign.