Obama spoke at a White House news conference after thousands of anti-Wall Street demonstrators protested at New York’s financial district and in several U.S. cities this week over economic inequality and financial institutions’ power.
“I think people are frustrated and, you know, the protesters are giving voice to a more broad-based frustration about how our financial system works,” Obama told reporters.
The anti-Wall Street protests that have spread from New York City toSan Francisco are evidence of public frustration with the financial system.
He said the public is dissatisfied that “you’re still seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on abusive practices that got us into this problem in the first place.”
Still, Obama defended the government rescue ofU.S.banks, saying that “had we seen a financial collapse then, the damage to the American economy would have been even worse.” He said he has used “a lot of political capital” to keep banks afloat.
Obama, a Democrat who is pressing his case for re-election at a time when unemployment is stuck above 9 percent, said his Republican opponents’ primary plan to boost the economy involved rolling back financial reforms his administration fought to pass.
“What we’ve seen over the last year is not only did the financial sector with the Republican Party and Congress fight us every inch of the way, but now you’ve got these same folks suggesting that we should roll back all those reforms and go back to the way it was before the crisis,” president Obama said.
Obama said the Dodd-Frank financial reform law was designed to prevent Wall Street abuses, and his emphasis on the subject indicated he would use that theme heavily in the 2012 presidential race.
“For us to have a healthy financial system, that requires that banks and other financial institutions compete on the basis of the best service and the best products and the best price,” he said.
“It can’t be competing on the basis of hidden fees, deceptive practices or, you know, derivative cocktails that nobody understands and that exposed the entire economy to enormous risks.”
Obama said today the government doesn’t have a right to dictate how much profit a bank makes. Still, he said, the bank charges demonstrate the need to install his nominee to lead the financial watchdog agency.
“What the Consumer Finance Protection Bureau could do is to make sure that consumers understood exactly what they were getting, exactly what was happening,” the president said.
Obama, who is pressing Republican lawmakers to back his recent proposal to create jobs, said the opposing party’s presidential candidates were focusing their economic plans on repealing his Wall Street reforms.
“You’ve got Republican presidential candidates whose main economic policy proposals is, ‘We’ll get rid of the financial reforms that are designed to prevent the abuses that got us into this mess in the first place,”‘ he said.
House Speaker John Boehner, R-Ohio, said Obama had “given up on the country” to focus on his re-election rather than working with Republicans to boost the economy.
Some Democratic lawmakers are also not fans of the bill. In response, Senate Majority Leader Harry Reid said he would substitute a new millionaire’s tax for some of the tax hikes Obama had proposed in order to win more support.
Nevertheless, Republicans are still expected to block the measure in the Democratic-controlled Senate and it faces stiff opposition in the Republican-controlled House of Representatives. [via Reuters, Bloomberg and CNBC]