Obama on the Record: News Conference on the Economy

Q Why should the public trust the government to handle that authority well?

THE PRESIDENT: Well, as I said before, if you look at how the FDIC has handled a situation like Indy Bank, for example, it actually does these kinds of resolutions effectively when it’s got the tools to do it. We don’t have the tools right now.

Okay, Chuck Todd.

Q Thank you, Mr. President. Some have compared this financial crisis to a war, and in times of war past Presidents have called for some form of sacrifice. Some of your programs, whether for Main Street or Wall Street, have actually cushioned the blow for those that were irresponsible during this — during this economic period of prosperity, or supposed prosperity that you were talking about. Why, given this new era of responsibility that you’re asking for, why haven’t you asked for something specific that the public should be sacrificing to participate in this economic recovery?

THE PRESIDENT: Well, let me — let me take that question in a couple of phases. First of all, it’s not true that we have not asked sacrifice from people who are getting taxpayer money. We have imposed some very stiff conditions. The only problem that we’ve had so far are contracts that were put in place before we took over. But moving forward, anybody — any bank, for example, that is receiving capital from the taxpayers is going to have to have some very strict conditions in terms of how it pays out its executives, how it pays out dividends, how it’s reporting its lending practices. So we want to make sure that there’s some stiff conditions in place.

With respect to the American people, I think folks are sacrificing left and right. You’ve got a lot of parents who are cutting back on everything to make sure that their kids can still go to college. You’ve got workers who are deciding to cut an entire day — and entire day’s worth of pay — so that their fellow coworkers aren’t laid off. I think that across the board people are making adjustments, large and small, to accommodate the fact that we’re in very difficult times right now.

What I’ve said here in Washington is that we’ve got to make some tough choices. We got to make some tough budgetary choices. What we can’t do, though, is sacrifice long-term growth, investments that are critical to the future. And that’s why my budget focuses on health care, energy, education — the kinds of things that can build a foundation for long-term economic growth, as opposed to the fleeting prosperity that we’ve seen over the last several years.

I mean, when you have an economy in which the majority of growth is coming from the financial sector, when AIG selling a derivative is counted as an increase in the Gross Domestic Product, then that’s not a model for sustainable economic growth. And what we have to do is invest in those things that will allow the American people’s capacity for ingenuity and innovation, their ability to take risks but make sure that those risks are grounded in good products and good services that they believe they can market to the rest of the country — that those models of economic growth are what we’re promoting. And that’s what I think our budget does.

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