Barack Obama

“ Once we deal with the immediate crisis in housing and strengthen the regulatory system governing our financial markets, our final task is to restore a sense of opportunity for all Americans.
The bedrock of our economic success is the American Dream. It’s a dream shared in big cities and small towns; across races, regions and religions – that if you work hard, you can support a family; that if you get sick, there will be health care you can afford; that you can retire with the dignity and security and respect that you have earned ”

“ It’s a market that has created a prosperity that is the envy of the world, and opportunity for generations of Americans. A market that has provided great rewards to the innovators and risk-takers who have made America a beacon for science, and technology, and discovery.
But the American experiment has worked in large part because we have guided the market’s invisible hand with a higher principle. Our free market was never meant to be a free license to take whatever you can get, however you can get it. ”

“ In the more than two centuries since then, we have struggled to balance the same forces that confronted Hamilton and Jefferson – self-interest and community; markets and democracy; the concentration of wealth and power, and the necessity of transparency and opportunity for each and every citizen. Throughout this saga, Americans have pursued their dreams within a free market that has been the engine of America’s progress. ”

“ If we fail to overcome our divisions and continue to let special interest set the agenda, then America will fall behind. Short-term gains will continue to yield long-term costs. Opportunity will slip away on Main Street and prosperity will suffer here on Wall Street. But if we unite this country around a common purpose, if we act on the responsibilities that we have to each other and to our country, then we can launch a new era of opportunity and prosperity. ”

“ That is why the principle that I spoke about at NASDAQ is even more urgently true today: in our 21st century economy, there is no dividing line between Main Street and Wall Street. The decisions made in New York’s high-rises have consequences for Americans across the country. And whether those Americans can make their house payments; whether they keep their jobs; or spend confidently without falling into debt – that has consequences for the entire market. The future cannot be shaped by the best-connected lobbyists with the best record of raising money for campaigns. ”

“ That’s why our economy hasn’t just been the world’s greatest wealth creator – it’s bound America together, it’s created jobs, and it’s made the dream of opportunity a reality for generations of Americans. ”

“ Financial institutions must do a better job at managing risks. There is something wrong when boards of directors or senior managers don’t understand the implications of the risks assumed by their own institutions. It’s time to realign incentives and compensation packages, so that both high level executives and employees better serve the interests of shareholders. And it’s time to confront the risks that come with excessive complexity. Even the best government regulation cannot fully substitute for internal risk management.
For supervisory agencies, oversight must keep pace with innovation. ”

“ Over the last few years, commercial banks and thrift institutions were subject to guidelines on subprime mortgages that did not apply to mortgage brokers and companies. It makes no sense for the Fed to tighten mortgage guidelines for banks when two-thirds of subprime mortgages don’t originate from banks. This regulatory framework has failed to protect homeowners, and it is now clear that it made no sense for our financial system. When it comes to protecting the American people, it should make no difference what kind of institution they are dealing with. ”

“ That is why we have put in place rules of the road to make competition fair, and open, and honest. We have done this not to stifle – but rather to advance prosperity and liberty. As I said at NASDAQ last September: the core of our economic success is the fundamental truth that each American does better when all Americans do better; that the well being of American business, its capital markets, and the American people are aligned. ”

“ But the Dodd-Frank package is not a bailout for lenders or investors who gambled recklessly, as they will take losses. It is not a windfall for borrowers, as they will have to share any capital gain. Instead, it offers a responsible and fair way to help bring an end to the foreclosure crisis. It asks both sides to sacrifice, while preventing a long-term collapse that could have enormous ramifications for the most responsible lenders and borrowers, as well as the American people as a whole. ”

“ We have as our inheritance the greatest economy the world has ever known. We have the responsibility to continue the work that began on that spring day over two centuries ago right here in Manhattan – to renew our common purpose for a new century, and to write the next chapter in the story of America’s success. ”

“ As we reform our regulatory system at home, we must work with international arrangements like the Basel Committee on Banking Supervision, the International Accounting Standards Board, and the Financial Stability Forum to address the same problems abroad. The goal must be ensuring that financial institutions around the world are subject to similar rules of the road – both to make the system stable, and to keep our financial institutions competitive. ”

“ To put more Americans to work, we’ll create millions of new Green Jobs and invest in rebuilding our nation’s infrastructure. To extend opportunity, we’ll invest in our schools and our teachers, and make college affordable for every American. ”

“ As the subprime crisis unfolded, tough questions about new and complex financial instruments were not asked. As a result, the public interest was not protected. We do American business – and the American people – no favors when we turn a blind eye to excessive leverage and dangerous risks.
Finally, the American people must be able to trust that their government is looking out for all of us – not just those who donate to political campaigns. ”

“ I seem them in towns across America, where a credit crisis threatens the ability of students to get loans, and states can’t finance infrastructure projects. I see them here in Manhattan, where one of our biggest investment banks had to be bailed out, and the Fed opened its discount window to a host of new institutions with unprecedented implications we have yet to appreciate. When all is said and done, losses will be in the many hundreds of billions. ”

“ When subprime mortgage lending took a reckless and unsustainable turn, a patchwork of regulators were unable or unwilling to protect the American people.
The policies of the Bush Administration threw the economy further out of balance. Tax cuts without end for the wealthiest Americans. A trillion dollar war in Iraq that didn’t need to be fought, paid for with deficit spending and borrowing from foreign creditors like China. ”

“ At a time when Washington is divided in old ideological battles, he shows us what can be achieved when we bring people together to seek pragmatic solutions. Not only has he been a remarkable leader for New York - he has established himself as a major voice in our national debate on issues like renewing our economy, educating our children, and seeking energy independence. Mr. Mayor, I share your determination to bring this country together to finally make progress for the American people. ”

“ Time and again, we’ve recognized that common stake that we have in each other’s success. That’s how people as different as Hamilton and Jefferson came together to launch the world’s greatest experiment in democracy. ”

“ Over two million households are at risk of foreclosure and millions more have seen their home values plunge. Many Americans are walking away from their homes, which hurts property values for entire neighborhoods and aggravates the credit crisis. To stabilize the housing market and help bring the foreclosure crisis to an end, I have sponsored Senator Chris Dodd’s legislation creating a new FHA Housing Security Program, which will provide meaningful incentives for lenders to buy or refinance existing mortgages. ”

“ Reshuffling bureaucracies should not be an end in itself. But the large, complex institutions that dominate the financial landscape do not fit into categories created decades ago. Different institutions compete in multiple markets – our regulatory system should not pretend otherwise. A streamlined system will provide better oversight, and be less costly for regulated institutions. ”

“ But for many American families, the economy has effectively been in recession for the past seven years. We have just come through the first sustained period of economic growth since World War II that was not accompanied by a growth in incomes for typical families. Americans are working harder for less. ”

“ With all the history that has passed through the narrow canyons of lower Manhattan, it is worth taking a moment to reflect on the role that the market has played in the development of the American story. ”

“ Companies like Enron and WorldCom took advantage of the new regulatory environment to push the envelope, pump up earnings, disguise losses and otherwise engage in accounting fraud to make their profits look better – a practice that led investors to question the balance sheet of all companies, and severely damaged public trust in capital markets. ”

“ I will not pretend that this will come without cost, though I have presented ways we can achieve these changes in a fiscally responsible way. I know that we’ll have to overcome our doubts and divisions and the determined opposition of powerful special interests before we can truly advance opportunity and prosperity for all Americans. ”

“ To reward work and make retirement secure, we’ll provide an income tax cut of up to $1000 for a working family, and eliminate income taxes altogether for any retiree making less than $50,000 per year. To make health care affordable for all Americans, we’ll cut costs and provide coverage to all who need it. ”

“ A decade later, we have deregulated the financial services sector, and we face another crisis. A regulatory structure set up for banks in the 1930s needed to change because the nature of business has changed. ”

“ And to ensure that America stays on the cutting edge, we’ll expand broadband access, expand funding for basic scientific research, and pass comprehensive immigration reform so that we continue to attract the best and the brightest to our shores. ”

“ And he encouraged manufacturing and infrastructure, so products could be moved to market.
Hamilton met fierce opposition from Thomas Jefferson, who worried that this brand of capitalism would favor the interests of the few over the many. Jefferson preferred an agrarian economy because he believed that it would give individual landowners freedom, and that this freedom would nurture our democratic institutions. But despite their differences, there was one thing that Jefferson and Hamilton agreed on – that economic growth depended upon the talent and ingenuity of the American people ”

“ It’s a dream shared in big cities and small towns; ”

“ We must develop and rigorously manage liquidity risk. We must investigate rating agencies and potential conflicts of interest with the people they are rating. And transparency requirements must demand full disclosure by financial institutions to shareholders and counterparties. ”