by Mark Silva
When
President Barack Obama chuckled at his own acknowledgement of how
unpopular the federal government's bailout of the automobile
industry is, his interviewer asked the president if he is "punch
drunk.''
"I
just wanna say that the only thing less popular than putting money
into banks is putting money into the auto industry," Obama
conceded. As CBS News' Steve Kroft noted in a
60 Minutes talk
with Obama last night that just 18 percent of those surveyed
support it, Obama said with a laugh: "It's not a high
number.''
"You're sitting here. And you are laughing,'' Kroft said. "You
are laughing about some of these problems. Are people gonna look at
this and say, 'I mean, he's sitting there just making jokes about
money.' How do you deal with, I mean, explain the...mood and your
laughter... Are you punch drunk?"
"No, no. There's gotta be a little gallows humor to get you
through the day," the president explained. "You know, sometimes my
team talks about the fact that if you had said to us a year ago
that the least of my problems would be Iraq, which is still a
pretty serious problem, I don't think anybody would have believed
it. But we've got a lot on our plate. And a lot of difficult
decisions that we're gonna have to make."
Obama allowed that he was surprised by the depth of recession
underway when he took office in January.
"I
don't think that we anticipated how steep the decline would be,
particularly in employment,'' the president said in the interview
aired by 60
Minutes. "I mean if you look at just,
you know, hundreds of thousands - now millions - of jobs being shed
over the course of two months or three months, that slope is a lot
steeper than anything that we've said we've seen before.
"Now, there's a potential silver lining, which may be that
things are so accelerated now, the modern economy is so intertwined
and wired, that things happen really fast for ill, but things may
recover faster than they have in the past," he said.
His
administration predicts a turnaround by year's end, with his lead
economic adviser saying over the weekend that the
economy should "bottom out'' sometime this
year.
"We're already starting to see flickers of hope
out there,''Obama said. "Refinancings have significantly increased.
Interest rates have never been lower. That promises the possibility
at least of the housing market bottoming out and stabilizing. It's
not going to happen equally in every part of the
country.''
The president was asked if he was surprised by
the intensity of the hostility over the nearly $200 million in
bonuses paid by the bailed-out American International Group to
executives after collecting nearly $200 billion in federal
assistance.
"I wasn't surprised by it,'' Obama said. "Our
team wasn't surprised by it. The one thing that I've tried to
emphasize, though, throughout this week, and will continue to try
to emphasize during the course of the next several months as we dig
ourselves out of this economic hole that we're in, we can't govern
outta anger.
"We've got to try to make good decisions based
on the facts in order to put people back to work, to get credit
flowing again,'' he said. "And I'm not gonna be distracted by
what's happening day to day. I've gotta stay focused on making sure
that we're getting this economy moving again.''
However, the president distanced himself from
the 90 percent tax on those bonuses that the House has approved in
retribution - with the Senate slated to address its own approach
this week.
"I think that as a general proposition, you
don't wanna be passing laws that are just targeting a handful of
individuals,'' said Obama, whose credentials as a constitutional
law professor in Chicago were noted in the question by CBS News'
Steve Kroft.
"You wanna pass laws that have some broad
applicability,'' the president said. "And as a general proposition,
I think you certainly don't wanna use the tax code to punish
people.
"I think that you've got a pretty egregious
situation here that people are understandably upset about,'' he
said. "And so let's see if there are ways of doing this that are
both legal, that are constitutional, that upholds our basic
principles of fairness, but don't hamper us from getting the
banking system back on track...
"We're gonna have to take a look at this
legislation carefully,'' he said,. "Clearly, the AIG folks gettin'
those bonuses didn't make sense. And one of the things that I have
to do is to communicate to Wall Street that, given the current
crisis that we're in, they can't expect help from taxpayers but
they enjoy all the benefits that they enjoyed before the crisis
happened.
"You get a sense that, in some institutions, that has not sunk
in; that you can't go back to the old way of doing business,
certainly not on the taxpayers' dime," Obama said. "Now the flip
side is that Main Street has to understand, unless we get these
banks moving again, then we can't get this economy to recover. And
we don't wanna cut off our nose to spite our face.''
The
president defended Treasury Secretary Tim Geithner, and maintained
that there has been no discussion within the White House about
replacing him in the midst of growing criticism.
"No, and shouldn't (resign),'' Obama said. "And if he were to
come to me, I'd say, 'Sorry, Buddy. You've still got the job.' But
look, he's got a lot of stuff on his plate. And he is doing a
terrific job. And I take responsibility for not, I think, having
given him as much help as he needs."
The
critics include Warren Buffett, the billionaire investor who has
supported Obama but questions his Treasury strategy.
"And Warren still does support me,'' Obama said. "But I think
that understand Warren's also a big player in the financial markets
who's a major owner of Wells Fargo. And so he's got a perspective
from the perspective of somebody who is part-owner of a bank.
You've got members of Congress who've got a different perspective.
Which is, 'We don't wanna spend any more taxpayer money.' You've
got a whole host of players, all of whom may have a completely
different solution. Right?"
"And you know, one of the challenges that Tim Geithner has had
is the same challenge that anybody would have in this situation.
People want a lot of contradictory things. You know, the banks
would love a lot of taxpayer money with no strings attached. Folks
in Congress, as well as the American people, would love to fix the
banks without spending any money. And so at a certain point, you
know, you've got just a very difficult line to walk...
"Part of my job is to communicate to (the
financial community). "Look, I believe in the market. I believe in
financial innovation. And I believe in success. I want them to do
well. But what I also know is that the financial sector was out of
balance. You look at how finance used to operate just 20 years ago,
or 25 years ago. People, if you went into investment banking, you
were making 20 times what a teacher made. You weren't making 200
times what a teacher made...
"I've told them directly, 'cause I've heard some of this,'' the
president said. "They need to spend a little time outside of New
York. Because you know, if you go to North Dakota, or you go to
Iowa, or you go to Arkansas, where folks would be thrilled to be
making $75,000 a year without a bonus, then I think they'd get a
sense of why people are frustrated.
""I think we have to understand the severity of
the crisis that we're in right now. The fact is that, because of
bad bets made on Wall Street, there have been enormous losses. I
mean there were a whole bunch of folks who, on paper, if you looked
at quarterly reports, were wildly successful, selling derivatives
that turned out to be...completely worthless.... And they were
insuring them.
""Now you know, gosh, I don't think it's me being anti-Wall
Street just to point out that the best and the brightest didn't do
too well on that front, and that you know, maybe the incentive
structures that have been set up have not produced the kinds of
long term growth that I think everybody's looking for...
"If
we don't get a handle on this, and also start looking at our
long-term deficit projections, at a certain point people will stop
buying those Treasury Bills," Obama
said.