What it says is, is that if you get shareholders involved and those shareholders are given a set of principles and best practices by which they can judge executive compensation, then you can still have outsized rewards and success for successful business people, but it will be based on not short-term performance, not three-month performance, not your ability to flip quick profits off products like derivatives that don’t turn out to be particularly productive to the company, but based on sustained, effective growth. And that’s what’s embodied in these documents, and I think that you’re going to see a lot of countries try to encourage that kind of transparency and accountability.
It doesn’t mean the state micromanaging — ( sneezes) — excuse me — I’ve been fighting this all week — it doesn’t mean that we want the state dictating salaries; we don’t. We — I strongly believe in a free-market system, and as I — as I think people understand in America, at least, people don’t resent the rich; they want to be rich. And that’s good. But we want to make sure that there’s mechanisms in place that holds people accountable and produces results. Okay?
Got to go back to my crew. Jake Tapper.
Q Thank you, Mr. President. Two questions. One, can you say with confidence that the steps the G20 nations are taking today — committing to today will help the world, or will prevent the world to avoid a depression or a deeper recession?
And two, your friend and ally, Prime Minister Brown, said that “The old Washington consensus is over; today we have reached a new consensus.” Is he right? And what do you think he meant by that?
PRESIDENT OBAMA: In life there are no guarantees; in economics there are no guarantees. The people who thought they could provide guarantees, many of them worked at AIG and it didn’t work out so well. So there are always risks involved.
I have no doubt, though, that the steps that have been taken are critical to preventing us sliding into a depression. They are bolder and more rapid than any international response that we’ve seen to a financial crisis in memory. And I think that they will have a concrete effect in our ability, individually, in each nation, to create jobs, save jobs that exist, grow the economy, loosen up credit, restore trust and confidence in the financial markets.
So these steps — another way of putting it is I think the steps in the communiqué were necessary. Whether they’re sufficient, we’ve got to — we’ve got to wait and see. I’m actually confident, though, that given the common commitment in the United States and in the other G20 countries to act rapidly and boldly, that if we see other inklings of panic in the marketplace, or things unwinding, that this group, once again, will respond as needed.