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Costa Mesa Town Hall, Orange Country, CA
It’s always good to get out of Washington for a little while and come to places like Costa Mesa — because the climate’s a lot nicer and so is the conversation. So I’m looking forward to taking your questions in a few minutes and talking with you about your concerns.
Before I do, I want to say a few words about the AIG bonuses you’ve been hearing about. I know a lot of you are outraged about this. I’m outraged, too. It’s hard to understand that a company that is relying on extraordinary assistance from taxpayers to keep its doors open would be paying anyone lavish bonuses. It goes against our most basic sense of what is fair and what is right. It offends our values.
But these bonuses, outrageous as they are, are a symptom of a much larger problem. And that is the system and culture that made them possible — a culture where people made enormous sums for taking irresponsible risks that have now put the whole economy at risk. So we are going to do everything we can to deal with these specific bonuses. But what’s just as important is that we make sure we don’t find ourselves in this situation again, where taxpayers are on the hook for losses in bad times and all the wealth generated in good times goes to those at the very top.
That is the kind of ethic we’ve had for too long. That is the kind of approach that led us into this mess. And that is something we have to change if we’re truly going to turn our economy around and move this country forward.
So I am absolutely committed to ensuring that we have the tools we need to prevent the kinds of abuses that sent AIG spiraling. And I am also committed to ensuring that if we ever do have to intervene again to prevent a bankruptcy that could be catastrophic for the whole financial system, we will have some of the tools that a bankruptcy judge has to help renegotiate contracts; to sell off insolvent parts of an institution and protect healthy parts; and to protect depositors, creditors, and other consumers.
We also want to do this because it serves the most important goal we have today, which is to rebuild our economy in a way that is consistent with our values — an economy that rewards hard work and responsibility, not high-flying finance schemes; an economy that is built on a strong foundation, but not one that’s propelled by overheated housing markets and maxed-out credit cards. In other words, we want to build an economy that offers prosperity for the long-run, not the bubble-and-burst economy we’ve experienced in recent years, where a relative few do spectacularly well while the middle class loses ground.
You know what I’m talking about. I don’t need to tell you these are challenging times. I don’t need to tell you this because you’re living it every day. One