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President Barack Obama urged Wall Street Thursday to accept proposed regulatory reforms, cautioning bankers that another near breakdown of the nation’s financial industry is unacceptable.
“It is essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it. And make no mistake, that is exactly what will happen if we allow this moment to pass — an outcome that is unacceptable to me and to the American people,” Obama said in remarks delivered at New York’s Cooper Union. This was the president’s second appearance in Cooper Union’s Great Hall, which has served as a platform for generations of leaders and ordinary citizens to engage in spirited discussion and debate.
Speaking to an audience of approximately 700 people, Obama criticized the “battalions” of financial industry lobbyists who, he said, are working “furiously” to influence the legislation’s outcome. Lawmakers have produced “a commonsense, reasonable, non-ideological” proposal to target the problems that led to the financial crisis, Obama said, urging bankers to join rather than fight efforts to reform the system.
The Rev. Al Sharpton, who attended the speech, said he wants the president to “rein in” the deregulated banks and businesses and make them responsible for what they do. The president “must send a clear message,” that there needs to more accountability, he said.
Despite widespread doubt hovering over the Capitol earlier this week, passage of a financial regulatory reform bill is all but assured. Republican opposition to the proposed overhaul is easing and the final vote might actually be a bipartisan one. It would be foolhardy, however, to take anything for granted, so the White House spent much of Thursday making closing arguments to a variety of audiences based on the key points in Obama’s speech.
The president outlined the legislation’s major goals, which included ending “too big to fail” and bank bailouts; providing strong consumer protection; making sure that derivatives come out of the shadows; giving shareholders a say in executive compensation; and implementing what he called the “Volker Rule,” which would limit the banks’ size and risky behaviors.
Former New York City Councilwoman Una Clarke was pleased with the president’s speech. “He offered up a balance between Wall Street and Main Street,” and making sure Main Street had better access to capital.
“Wall Street and bankers must cooperate for the next generation and not make the same mistake of the last generation,” said Clarke of the need for bankers to increase transparency and access to funding.
But Republican critics say that the bill will ensure taxpayer bailouts for generations to come.
“The Democrats’ plan should really be known as the Bailout Protection Act. It gives unelected bureaucrats enormous latitude to cover the debt of private companies and step in with bailouts for just about any reason at all,” said Republican Study Committee Chairman Tom Price (R-Georgia). “The bailout rules will allow unions and politically favored creditors to get a better deal than regular folks who invested their hard-earned money. It’s the perfect recipe for a destructive political economy.”