Obama in Command: The Rolling Stone Interview
In an Oval Office interview, the president discusses the Tea Party, the war, the economy and what’s at stake this November
By Jann S. Wenner
Sep 28, 2010
The following is an article from the October 15, 2010 issue of Rolling Stone.
We arrived at the southwest gate of the white house a little after one o'clock on the afternoon of September 17th. It was a warm fall day, but the capital felt quiet and half-empty, as it does on Fridays at the end of summer, with Congress still in recess. Rolling Stone had interviewed Barack Obama twice before, both times aboard his campaign plane — first in June 2008, a few days after he won the Democratic nomination, and again that October, a month before his election. This time executive editor Eric Bates and I sat down with the president in the Oval Office, flanked by busts of Abraham Lincoln and Martin Luther King Jr. The conversation stretched on for nearly an hour and a quarter. The president began by complimenting my multi-colored striped socks. "If I wasn't president," he laughed, "I could wear socks like that."
When you came into office, you felt you would be able to work with the other side. When did you realize that the Republicans had abandoned any real effort to work with you and create bipartisan policy?
Well, I'll tell you that given the state of the economy during my transition, between my election and being sworn in, our working assumption was that everybody was going to want to pull together, because there was a sizable chance that we could have a financial meltdown and the entire country could plunge into a depression. So we had to work very rapidly to try to create a combination of measures that would stop the free-fall and cauterize the job loss.
The recovery package we shaped was put together on the theory that we shouldn't exclude any ideas on the basis of ideological predispositions, and so a third of the Recovery Act were tax cuts. Now, they happened to be the most progressive tax cuts in history, very much geared toward middle-class families. There was not only a fairness rationale to that, but also an economic rationale — those were the folks who were most likely to spend the money and, hence, prop up demand at a time when the economy was really freezing up.
I still remember going over to the Republican caucus to meet with them and present our ideas, and to solicit ideas from them before we presented the final package. And on the way over, the caucus essentially released a statement that said, "We're going to all vote 'No' as a caucus." And this was before we'd even had the conversation. At that point, we realized that we weren't going to get the kind of cooperation we'd anticipated. The strategy the Republicans were going to pursue was one of sitting on the sidelines, trying to gum up the works, based on the assumption that given the scope and size of the recovery, the economy probably wouldn't be very good, even in 2010, and that they were better off being able to assign the blame to us than work with us to try to solve the problem.
How do you feel about the fact that day after day, there's this really destructive attack on whatever you propose? Does that bother you? Has it shocked you?
I don't think it's a shock. I had served in the United States Senate; I had seen how the filibuster had become a routine tool to slow things down, as opposed to what it used to be, which was a selective tool — although often a very destructive one, because it was typically targeted at civil rights and the aspirations of African-Americans who were trying to be freed up from Jim Crow. But I'd been in the Senate long enough to know that the machinery there was breaking down.
What I was surprised somewhat by, and disappointed by, although I've got to give some grudging admiration for just how effective it's been, was the degree to which [Senate Minority Leader] Mitch McConnell was able to keep his caucus together on a lot of issues. Eventually, we were able to wear them down, so that we were able to finally get really important laws passed, some of which haven't gotten a lot of attention — the credit-card reform bill, or the anti-tobacco legislation, or preventing housing and mortgage fraud. We'd be able to pick off two or three Republicans who wanted to do the right thing.
But the delays, the cloture votes, the unprecedented obstruction that has taken place in the Senate took its toll. Even if you eventually got something done, it would take so long and it would be so contentious, that it sent a message to the public that "Gosh, Obama said he was going to come in and change Washington, and it's exactly the same, it's more contentious than ever." Everything just seems to drag on — even what should be routine activities, like appointments, aren't happening. So it created an atmosphere in which a public that is already very skeptical of government, but was maybe feeling hopeful right after my election, felt deflated and sort of felt, "We're just seeing more of the same."
What do you think the Republican Party stands for today?
Well, on the economic front, their only agenda seems to be tax cuts for the wealthiest Americans. If you ask their leadership what their agenda will be going into next year to bring about growth and improve the job numbers out there, what they will say is, "We just want these tax cuts for the wealthiest Americans, which will cost us $700 billion and which we're not going to pay for."
Now what they'll also say is, "We're going to control spending." But of course, when you say you're going to borrow $700 billion to give an average $100,000-a-year tax break to people making a million dollars a year, or more, and you're not going to pay for it; when Mitch McConnell's overall tax package that he just announced recently was priced at about $4 trillion; when you, as a caucus, reject a bipartisan idea for a fiscal commission that originated from Judd Gregg, Republican budget chair, and Kent Conrad, Democratic budget chair, so that I had to end up putting the thing together administratively because we couldn't get any support — you don't get a sense that they're actually serious on the deficit side.
What do you think of the Tea Party and the people behind it?
I think the Tea Party is an amalgam, a mixed bag of a lot of different strains in American politics that have been there for a long time. There are some strong and sincere libertarians who are in the Tea Party who generally don't believe in government intervention in the market or socially. There are some social conservatives in the Tea Party who are rejecting me the same way they rejected Bill Clinton, the same way they would reject any Democratic president as being too liberal or too progressive. There are strains in the Tea Party that are troubled by what they saw as a series of instances in which the middle-class and working-class people have been abused or hurt by special interests and Washington, but their anger is misdirected.
And then there are probably some aspects of the Tea Party that are a little darker, that have to do with anti-immigrant sentiment or are troubled by what I represent as the president. So I think it's hard to characterize the Tea Party as a whole, and I think it's still defining itself.
Do you think that it's being manipulated?
There's no doubt that the infrastructure and the financing of the Tea Party come from some very traditional, very powerful, special-interest lobbies. I don't think this is a secret. Dick Armey and FreedomWorks, which was one of the first organizational mechanisms to bring Tea Party folks together, are financed by very conservative industries and forces that are opposed to enforcement of environmental laws, that are opposed to an energy policy that would be different than the fossil-fuel-based approach we've been taking, that don't believe in regulations that protect workers from safety violations in the workplace, that want to make sure that we are not regulating the financial industries in ways that we have.
There's no doubt that there is genuine anger, frustration and anxiety in the public at large about the worst financial crisis we've experienced since the Great Depression. Part of what we have to keep in mind here is this recession is worse than the Ronald Reagan recession of the Eighties, the 1990-91 recession, and the 2001 recession combined. The depths of it have been profound. This body politic took a big hit in the gut, and that always roils up our politics, and can make people angry. But because of the ability of a lot of very well-funded groups to point that anger — I think misdirect that anger — it is translating into a relevant political force in this election.
What do you think of Fox News? Do you think it's a good institution for America and for democracy?
[Laughs] Look, as president, I swore to uphold the Constitution, and part of that Constitution is a free press. We've got a tradition in this country of a press that oftentimes is opinionated. The golden age of an objective press was a pretty narrow span of time in our history. Before that, you had folks like Hearst who used their newspapers very intentionally to promote their viewpoints. I think Fox is part of that tradition — it is part of the tradition that has a very clear, undeniable point of view. It's a point of view that I disagree with. It's a point of view that I think is ultimately destructive for the long-term growth of a country that has a vibrant middle class and is competitive in the world. But as an economic enterprise, it's been wildly successful. And I suspect that if you ask Mr. Murdoch what his number-one concern is, it's that Fox is very successful.
You've passed more progressive legislation than any president since Lyndon Johnson. Yet your base does not seem nearly as fired up as the opposition, and you don't seem to be getting the credit for those legislative victories. There was talk that you were going to mobilize your grass-roots volunteers and use them to pressure Congress, but you decided for whatever reason not to involve the public directly and not to force a filibuster on issues like health care. What do you say to those people who have developed a sense of frustration — your base — who feel that you need to fight harder?
That's a bunch of different questions, so let me see if I can kind of knock them out one by one.
One of the healthy things about the Democratic Party is that it is diverse and opinionated. We have big arguments within the party because we got a big tent, and that tent grew during my election and in the midterm election previously. So making everybody happy within the Democratic Party is always going to be tough.
Some of it, also, has to do with — and I joke about it — that there's a turn of mind among Democrats and progressives where a lot of times we see the glass as half-empty. It's like, "Well, gosh, we've got this historic health care legislation that we've been trying to get for 100 years, but it didn't have every bell and whistle that we wanted right now, so let's focus on what we didn't get instead of what we got." That self-critical element of the progressive mind is probably a healthy thing, but it can also be debilitating.
When I talk to Democrats around the country, I tell them, "Guys, wake up here. We have accomplished an incredible amount in the most adverse circumstances imaginable." I came in and had to prevent a Great Depression, restore the financial system so that it functions, and manage two wars. In the midst of all that, I ended one of those wars, at least in terms of combat operations. We passed historic health care legislation, historic financial regulatory reform and a huge number of legislative victories that people don't even notice. We wrestled away billions of dollars of profit that were going to the banks and middlemen through the student-loan program, and now we have tens of billions of dollars that are going directly to students to help them pay for college. We expanded national service more than we ever have before.
The Recovery Act alone represented the largest investment in research and development in our history, the largest investment in infrastructure since Dwight Eisenhower, the largest investment in education — and that was combined, by the way, with the kind of education reform that we hadn't seen in this country in 30 years — and the largest investment in clean energy in our history.
You look at all this, and you say, "Folks, that's what you elected me to do." I keep in my pocket a checklist of the promises I made during the campaign, and here I am, halfway through my first term, and we've probably accomplished 70 percent of the things that we said we were going to do — and by the way, I've got two years left to finish the rest of the list, at minimum. So I think that it is very important for Democrats to take pride in what we've accomplished.
All that has taken place against a backdrop in which, because of the financial crisis, we've seen an increase in poverty, and an increase in unemployment, and people's wages and incomes have stagnated. So it's not surprising that a lot of folks out there don't feel like these victories have had an impact. What is also true is our two biggest pieces of legislation, health care and financial regulatory reform, won't take effect right away, so ordinary folks won't see the impact of a lot of these things for another couple of years. It is very important for progressives to understand that just on the domestic side, we've accomplished a huge amount.
When you look at what we've been able to do internationally — resetting our relations with Russia and potentially having a new START treaty by the end of the year, reinvigorating the Middle East peace talks, ending the combat mission in Iraq, promoting a G-20 structure that has drained away a lot of the sense of north versus south, east versus west, so that now the whole world looks to America for leadership, and changing world opinion in terms of how we operate on issues like human rights and torture around the world — all those things have had an impact as well.
What is true, and this is part of what can frustrate folks, is that over the past 20 months, we made a series of decisions that were focused on governance, and sometimes there was a conflict between governance and politics. So there were some areas where we could have picked a fight with Republicans that might have gotten our base feeling good, but would have resulted in us not getting legislation done.
I could have had a knock-down, drag-out fight on the public option that might have energized you and The Huffington Post, and we would not have health care legislation now. I could have taken certain positions on aspects of the financial regulatory bill, where we got 90 percent of what we set out to get, and I could have held out for that last 10 percent, and we wouldn't have a bill. You've got to make a set of decisions in terms of "What are we trying to do here? Are we trying to just keep everybody ginned up for the next election, or at some point do you try to win elections because you're actually trying to govern?" I made a decision early on in my presidency that if I had an opportunity to do things that would make a difference for years to come, I'm going to go ahead and take it.
I just made the announcement about Elizabeth Warren setting up our Consumer Finance Protection Bureau out in the Rose Garden, right before you came in. Here's an agency that has the potential to save consumers billions of dollars over the next 20 to 30 years — simple stuff like making sure that folks don't jack up your credit cards without you knowing about it, making sure that mortgage companies don't steer you to higher-rate mortgages because they're getting a kickback, making sure that payday loans aren't preying on poor people in ways that these folks don't understand. And you know what? That's what we say we stand for as progressives. If we can't take pleasure and satisfaction in concretely helping middle-class families and working-class families save money, get a college education, get health care — if that's not what we're about, then we shouldn't be in the business of politics. Then we're no better than the other side, because all we're thinking about is whether or not we're in power.
Let me ask you about financial reform. Despite all the things like consumer protection that you did get accomplished, the regulation of Wall Street — especially the closing down of all the derivatives trading that was really at the heart of the financial meltdown — seems to have been eviscerated.
I've got to disagree with that. If you take a look at it, what we've essentially said is that the vast majority of derivatives are now going to be sold through a clearinghouse. And if you ask the experts what was the best way to make sure the derivative markets didn't bring down the economy again, it's transparency, so that everybody understands who the counterparties are, everybody understands what the deal is, what the risks are — it's all aboveboard, it's all in the light of day.
People have legitimate concerns that if the rules drafted by all these various agencies in charge of implementing financial reform wind up with exceptions that are so big you can drive a truck through them, and suddenly you can have these specially tailored derivatives that are sold outside of the clearinghouse, then you could end up with an inadequate regulatory structure.
But if the rules are written properly — and I have confidence that the people I appointed to these agencies intend to apply them properly — it’s going to make a difference. Is it going to solve every potential problem in Wall Street in a multi-trillion-dollar, worldwide, capital market? Probably not. There could end up being new schemes, new loopholes that folks are going to try to exploit. The special interests are already ginning up to try to influence the rulemaking process in all these issues, so we have to remain vigilant. But to say that we did not significantly improve oversight of the derivatives market, it just isn’t true.
There’s also a concern when it comes to financial reform that your economic team is closely identified with Wall Street and the deregulation that caused the collapse. These are the folks who were supposed to have had oversight of Wall Street, and many of them worked for or were close to banks like Goldman Sachs.
Let me first of all say this. . . .
You used to work for Goldman Sachs!
[Laughs] Exactly. I read some of the articles that Tim Dickinson and others have produced in Rolling Stone. I understand the point of view that they're bringing. But look: Tim Geithner never worked for Goldman; Larry Summers didn't work for Goldman. There is no doubt that I brought in a bunch of folks who understand the financial markets, the same way, by the way, that FDR brought in a lot of folks who understood the financial markets after the crash, including Joe Kennedy, because my number-one job at that point was making sure that we did not have a full-fledged financial meltdown.
The reason that was so important was not because I was concerned about making sure that the folks who had been making hundreds of millions of dollars were keeping their bonuses for the next year. The reason was because we were seeing 750,000 jobs a month being lost when I was sworn in. The consequence to Main Street, to ordinary folks, was catastrophic, and we had to make sure that we stopped the bleeding. We managed to stabilize the financial markets at a cost that is much less to taxpayers than anybody had anticipated. The truth of the matter is that TARP will end up costing probably less than $100 billion, when all is said and done. Which I promise you, two years ago, you could have asked any economist and any financial expert out there, and they would have said, "We'll take that deal."
Continued at: http://www.rollingstone.com/politics/news/17390/209395?RS_show_page=2
In an Oval Office interview, the president discusses the Tea Party, the war, the economy and what’s at stake this November
By Jann S. Wenner
Sep 28, 2010
The following is an article from the October 15, 2010 issue of Rolling Stone.
We arrived at the southwest gate of the white house a little after one o'clock on the afternoon of September 17th. It was a warm fall day, but the capital felt quiet and half-empty, as it does on Fridays at the end of summer, with Congress still in recess. Rolling Stone had interviewed Barack Obama twice before, both times aboard his campaign plane — first in June 2008, a few days after he won the Democratic nomination, and again that October, a month before his election. This time executive editor Eric Bates and I sat down with the president in the Oval Office, flanked by busts of Abraham Lincoln and Martin Luther King Jr. The conversation stretched on for nearly an hour and a quarter. The president began by complimenting my multi-colored striped socks. "If I wasn't president," he laughed, "I could wear socks like that."
When you came into office, you felt you would be able to work with the other side. When did you realize that the Republicans had abandoned any real effort to work with you and create bipartisan policy?
Well, I'll tell you that given the state of the economy during my transition, between my election and being sworn in, our working assumption was that everybody was going to want to pull together, because there was a sizable chance that we could have a financial meltdown and the entire country could plunge into a depression. So we had to work very rapidly to try to create a combination of measures that would stop the free-fall and cauterize the job loss.
The recovery package we shaped was put together on the theory that we shouldn't exclude any ideas on the basis of ideological predispositions, and so a third of the Recovery Act were tax cuts. Now, they happened to be the most progressive tax cuts in history, very much geared toward middle-class families. There was not only a fairness rationale to that, but also an economic rationale — those were the folks who were most likely to spend the money and, hence, prop up demand at a time when the economy was really freezing up.
I still remember going over to the Republican caucus to meet with them and present our ideas, and to solicit ideas from them before we presented the final package. And on the way over, the caucus essentially released a statement that said, "We're going to all vote 'No' as a caucus." And this was before we'd even had the conversation. At that point, we realized that we weren't going to get the kind of cooperation we'd anticipated. The strategy the Republicans were going to pursue was one of sitting on the sidelines, trying to gum up the works, based on the assumption that given the scope and size of the recovery, the economy probably wouldn't be very good, even in 2010, and that they were better off being able to assign the blame to us than work with us to try to solve the problem.
How do you feel about the fact that day after day, there's this really destructive attack on whatever you propose? Does that bother you? Has it shocked you?
I don't think it's a shock. I had served in the United States Senate; I had seen how the filibuster had become a routine tool to slow things down, as opposed to what it used to be, which was a selective tool — although often a very destructive one, because it was typically targeted at civil rights and the aspirations of African-Americans who were trying to be freed up from Jim Crow. But I'd been in the Senate long enough to know that the machinery there was breaking down.
What I was surprised somewhat by, and disappointed by, although I've got to give some grudging admiration for just how effective it's been, was the degree to which [Senate Minority Leader] Mitch McConnell was able to keep his caucus together on a lot of issues. Eventually, we were able to wear them down, so that we were able to finally get really important laws passed, some of which haven't gotten a lot of attention — the credit-card reform bill, or the anti-tobacco legislation, or preventing housing and mortgage fraud. We'd be able to pick off two or three Republicans who wanted to do the right thing.
But the delays, the cloture votes, the unprecedented obstruction that has taken place in the Senate took its toll. Even if you eventually got something done, it would take so long and it would be so contentious, that it sent a message to the public that "Gosh, Obama said he was going to come in and change Washington, and it's exactly the same, it's more contentious than ever." Everything just seems to drag on — even what should be routine activities, like appointments, aren't happening. So it created an atmosphere in which a public that is already very skeptical of government, but was maybe feeling hopeful right after my election, felt deflated and sort of felt, "We're just seeing more of the same."
What do you think the Republican Party stands for today?
Well, on the economic front, their only agenda seems to be tax cuts for the wealthiest Americans. If you ask their leadership what their agenda will be going into next year to bring about growth and improve the job numbers out there, what they will say is, "We just want these tax cuts for the wealthiest Americans, which will cost us $700 billion and which we're not going to pay for."
Now what they'll also say is, "We're going to control spending." But of course, when you say you're going to borrow $700 billion to give an average $100,000-a-year tax break to people making a million dollars a year, or more, and you're not going to pay for it; when Mitch McConnell's overall tax package that he just announced recently was priced at about $4 trillion; when you, as a caucus, reject a bipartisan idea for a fiscal commission that originated from Judd Gregg, Republican budget chair, and Kent Conrad, Democratic budget chair, so that I had to end up putting the thing together administratively because we couldn't get any support — you don't get a sense that they're actually serious on the deficit side.
What do you think of the Tea Party and the people behind it?
I think the Tea Party is an amalgam, a mixed bag of a lot of different strains in American politics that have been there for a long time. There are some strong and sincere libertarians who are in the Tea Party who generally don't believe in government intervention in the market or socially. There are some social conservatives in the Tea Party who are rejecting me the same way they rejected Bill Clinton, the same way they would reject any Democratic president as being too liberal or too progressive. There are strains in the Tea Party that are troubled by what they saw as a series of instances in which the middle-class and working-class people have been abused or hurt by special interests and Washington, but their anger is misdirected.
And then there are probably some aspects of the Tea Party that are a little darker, that have to do with anti-immigrant sentiment or are troubled by what I represent as the president. So I think it's hard to characterize the Tea Party as a whole, and I think it's still defining itself.
Do you think that it's being manipulated?
There's no doubt that the infrastructure and the financing of the Tea Party come from some very traditional, very powerful, special-interest lobbies. I don't think this is a secret. Dick Armey and FreedomWorks, which was one of the first organizational mechanisms to bring Tea Party folks together, are financed by very conservative industries and forces that are opposed to enforcement of environmental laws, that are opposed to an energy policy that would be different than the fossil-fuel-based approach we've been taking, that don't believe in regulations that protect workers from safety violations in the workplace, that want to make sure that we are not regulating the financial industries in ways that we have.
There's no doubt that there is genuine anger, frustration and anxiety in the public at large about the worst financial crisis we've experienced since the Great Depression. Part of what we have to keep in mind here is this recession is worse than the Ronald Reagan recession of the Eighties, the 1990-91 recession, and the 2001 recession combined. The depths of it have been profound. This body politic took a big hit in the gut, and that always roils up our politics, and can make people angry. But because of the ability of a lot of very well-funded groups to point that anger — I think misdirect that anger — it is translating into a relevant political force in this election.
What do you think of Fox News? Do you think it's a good institution for America and for democracy?
[Laughs] Look, as president, I swore to uphold the Constitution, and part of that Constitution is a free press. We've got a tradition in this country of a press that oftentimes is opinionated. The golden age of an objective press was a pretty narrow span of time in our history. Before that, you had folks like Hearst who used their newspapers very intentionally to promote their viewpoints. I think Fox is part of that tradition — it is part of the tradition that has a very clear, undeniable point of view. It's a point of view that I disagree with. It's a point of view that I think is ultimately destructive for the long-term growth of a country that has a vibrant middle class and is competitive in the world. But as an economic enterprise, it's been wildly successful. And I suspect that if you ask Mr. Murdoch what his number-one concern is, it's that Fox is very successful.
You've passed more progressive legislation than any president since Lyndon Johnson. Yet your base does not seem nearly as fired up as the opposition, and you don't seem to be getting the credit for those legislative victories. There was talk that you were going to mobilize your grass-roots volunteers and use them to pressure Congress, but you decided for whatever reason not to involve the public directly and not to force a filibuster on issues like health care. What do you say to those people who have developed a sense of frustration — your base — who feel that you need to fight harder?
That's a bunch of different questions, so let me see if I can kind of knock them out one by one.
One of the healthy things about the Democratic Party is that it is diverse and opinionated. We have big arguments within the party because we got a big tent, and that tent grew during my election and in the midterm election previously. So making everybody happy within the Democratic Party is always going to be tough.
Some of it, also, has to do with — and I joke about it — that there's a turn of mind among Democrats and progressives where a lot of times we see the glass as half-empty. It's like, "Well, gosh, we've got this historic health care legislation that we've been trying to get for 100 years, but it didn't have every bell and whistle that we wanted right now, so let's focus on what we didn't get instead of what we got." That self-critical element of the progressive mind is probably a healthy thing, but it can also be debilitating.
When I talk to Democrats around the country, I tell them, "Guys, wake up here. We have accomplished an incredible amount in the most adverse circumstances imaginable." I came in and had to prevent a Great Depression, restore the financial system so that it functions, and manage two wars. In the midst of all that, I ended one of those wars, at least in terms of combat operations. We passed historic health care legislation, historic financial regulatory reform and a huge number of legislative victories that people don't even notice. We wrestled away billions of dollars of profit that were going to the banks and middlemen through the student-loan program, and now we have tens of billions of dollars that are going directly to students to help them pay for college. We expanded national service more than we ever have before.
The Recovery Act alone represented the largest investment in research and development in our history, the largest investment in infrastructure since Dwight Eisenhower, the largest investment in education — and that was combined, by the way, with the kind of education reform that we hadn't seen in this country in 30 years — and the largest investment in clean energy in our history.
You look at all this, and you say, "Folks, that's what you elected me to do." I keep in my pocket a checklist of the promises I made during the campaign, and here I am, halfway through my first term, and we've probably accomplished 70 percent of the things that we said we were going to do — and by the way, I've got two years left to finish the rest of the list, at minimum. So I think that it is very important for Democrats to take pride in what we've accomplished.
All that has taken place against a backdrop in which, because of the financial crisis, we've seen an increase in poverty, and an increase in unemployment, and people's wages and incomes have stagnated. So it's not surprising that a lot of folks out there don't feel like these victories have had an impact. What is also true is our two biggest pieces of legislation, health care and financial regulatory reform, won't take effect right away, so ordinary folks won't see the impact of a lot of these things for another couple of years. It is very important for progressives to understand that just on the domestic side, we've accomplished a huge amount.
When you look at what we've been able to do internationally — resetting our relations with Russia and potentially having a new START treaty by the end of the year, reinvigorating the Middle East peace talks, ending the combat mission in Iraq, promoting a G-20 structure that has drained away a lot of the sense of north versus south, east versus west, so that now the whole world looks to America for leadership, and changing world opinion in terms of how we operate on issues like human rights and torture around the world — all those things have had an impact as well.
What is true, and this is part of what can frustrate folks, is that over the past 20 months, we made a series of decisions that were focused on governance, and sometimes there was a conflict between governance and politics. So there were some areas where we could have picked a fight with Republicans that might have gotten our base feeling good, but would have resulted in us not getting legislation done.
I could have had a knock-down, drag-out fight on the public option that might have energized you and The Huffington Post, and we would not have health care legislation now. I could have taken certain positions on aspects of the financial regulatory bill, where we got 90 percent of what we set out to get, and I could have held out for that last 10 percent, and we wouldn't have a bill. You've got to make a set of decisions in terms of "What are we trying to do here? Are we trying to just keep everybody ginned up for the next election, or at some point do you try to win elections because you're actually trying to govern?" I made a decision early on in my presidency that if I had an opportunity to do things that would make a difference for years to come, I'm going to go ahead and take it.
I just made the announcement about Elizabeth Warren setting up our Consumer Finance Protection Bureau out in the Rose Garden, right before you came in. Here's an agency that has the potential to save consumers billions of dollars over the next 20 to 30 years — simple stuff like making sure that folks don't jack up your credit cards without you knowing about it, making sure that mortgage companies don't steer you to higher-rate mortgages because they're getting a kickback, making sure that payday loans aren't preying on poor people in ways that these folks don't understand. And you know what? That's what we say we stand for as progressives. If we can't take pleasure and satisfaction in concretely helping middle-class families and working-class families save money, get a college education, get health care — if that's not what we're about, then we shouldn't be in the business of politics. Then we're no better than the other side, because all we're thinking about is whether or not we're in power.
Let me ask you about financial reform. Despite all the things like consumer protection that you did get accomplished, the regulation of Wall Street — especially the closing down of all the derivatives trading that was really at the heart of the financial meltdown — seems to have been eviscerated.
I've got to disagree with that. If you take a look at it, what we've essentially said is that the vast majority of derivatives are now going to be sold through a clearinghouse. And if you ask the experts what was the best way to make sure the derivative markets didn't bring down the economy again, it's transparency, so that everybody understands who the counterparties are, everybody understands what the deal is, what the risks are — it's all aboveboard, it's all in the light of day.
People have legitimate concerns that if the rules drafted by all these various agencies in charge of implementing financial reform wind up with exceptions that are so big you can drive a truck through them, and suddenly you can have these specially tailored derivatives that are sold outside of the clearinghouse, then you could end up with an inadequate regulatory structure.
But if the rules are written properly — and I have confidence that the people I appointed to these agencies intend to apply them properly — it’s going to make a difference. Is it going to solve every potential problem in Wall Street in a multi-trillion-dollar, worldwide, capital market? Probably not. There could end up being new schemes, new loopholes that folks are going to try to exploit. The special interests are already ginning up to try to influence the rulemaking process in all these issues, so we have to remain vigilant. But to say that we did not significantly improve oversight of the derivatives market, it just isn’t true.
There’s also a concern when it comes to financial reform that your economic team is closely identified with Wall Street and the deregulation that caused the collapse. These are the folks who were supposed to have had oversight of Wall Street, and many of them worked for or were close to banks like Goldman Sachs.
Let me first of all say this. . . .
You used to work for Goldman Sachs!
[Laughs] Exactly. I read some of the articles that Tim Dickinson and others have produced in Rolling Stone. I understand the point of view that they're bringing. But look: Tim Geithner never worked for Goldman; Larry Summers didn't work for Goldman. There is no doubt that I brought in a bunch of folks who understand the financial markets, the same way, by the way, that FDR brought in a lot of folks who understood the financial markets after the crash, including Joe Kennedy, because my number-one job at that point was making sure that we did not have a full-fledged financial meltdown.
The reason that was so important was not because I was concerned about making sure that the folks who had been making hundreds of millions of dollars were keeping their bonuses for the next year. The reason was because we were seeing 750,000 jobs a month being lost when I was sworn in. The consequence to Main Street, to ordinary folks, was catastrophic, and we had to make sure that we stopped the bleeding. We managed to stabilize the financial markets at a cost that is much less to taxpayers than anybody had anticipated. The truth of the matter is that TARP will end up costing probably less than $100 billion, when all is said and done. Which I promise you, two years ago, you could have asked any economist and any financial expert out there, and they would have said, "We'll take that deal."
Continued at: http://www.rollingstone.com/politics/news/17390/209395?RS_show_page=2
