January 16th, 2010
08:00 AM ET
8 years ago

Obama: We won't let Wall Street 'take the money and run'

Full text of President Obama's weekly address, as released by the White House:

Remarks of President Barack Obama
As Prepared for Delivery
Weekly Address
January 16, 2010

Over the past two years, more than seven million Americans have lost their jobs. Countless businesses have been forced to shut their doors. Few families have escaped the pain of this terrible recession. Rarely does a day go by that I do not hear from folks who are hurting. That is why we have pushed so hard to rebuild this economy.

But even as we work tirelessly to dig our way out of this hole, it is important that we address what led us into such a deep mess in the first place. Much of the turmoil of this recession was caused by the irresponsibility of banks and financial institutions on Wall Street. These financial firms took huge, reckless risks in pursuit of short-term profits and soaring bonuses. They gambled with borrowed money, without enough oversight or regard for the consequences. And when they lost, they lost big. Little more than a year ago, many of the largest and oldest financial firms in the world teetered on the brink of collapse, overwhelmed by the consequences of their irresponsible decisions. This financial crisis nearly pulled the entire economy into a second Great Depression.

As a result, the American people – struggling in their own right – were placed in a deeply unfair and unsatisfying position. Even though these financial firms were largely facing a crisis of their own creation, their failure could have led to an even greater calamity for the country. That is why the previous administration started a program – the Troubled Asset Relief Program, or TARP – to provide these financial institutions with funds to survive the turmoil they helped unleash. It was a distasteful but necessary thing to do.

Many originally feared that most of the $700 billion in TARP money would be lost. But when my administration came into office, we put in place rigorous rules for accountability and transparency, which cut the cost of the bailout dramatically. We have now recovered most of the money we provided to the banks. That’s good news, but as far as I’m concerned, it’s not good enough. We want the taxpayers’ money back, and we’re going to collect every dime.

That is why, this week, I proposed a new fee on major financial firms to compensate the American people for the extraordinary assistance they provided to the financial industry. And the fee would be in place until the American taxpayer is made whole. Only the largest financial firms with more than $50 billion in assets will be affected, not community banks. And the bigger the firm – and the more debt it holds – the larger the fee. Because we are not only going to recover our money and help close our deficits; we are going to attack some of the banking practices that led to the crisis.

That’s important. The fact is, financial firms play an essential role in our economy. They provide capital and credit to families purchasing homes, students attending college, businesses looking to start up or expand. This is critical to our recovery. That is why our goal with this fee – and with the common-sense financial reforms we seek – is not to punish the financial industry. Our goal is to prevent the abuse and excess that nearly led to its collapse. Our goal is to promote fair dealings while punishing those who game the system; to encourage sustained growth while discouraging the speculative bubbles that inevitably burst. Ultimately, that is in the shared interest of the financial industry and the American people.

Of course, I would like the banks to embrace this sense of mutual responsibility. So far, though, they have ferociously fought financial reform. The industry has even joined forces with the opposition party to launch a massive lobbying campaign against common-sense rules to protect consumers and prevent another crisis.

Now, like clockwork, the banks and politicians who curry their favor are already trying to stop this fee from going into effect. The very same firms reaping billions of dollars in profits, and reportedly handing out more money in bonuses and compensation than ever before in history, are now pleading poverty. It’s a sight to see.

Those who oppose this fee say the banks can’t afford to pay back the American people without passing on the costs to their shareholders and customers. But that’s hard to believe when there are reports that Wall Street is going to hand out more money in bonuses and compensation just this year than the cost of this fee over the next ten years. If the big financial firms can afford massive bonuses, they can afford to pay back the American people.

Those who oppose this fee have also had the audacity to suggest that it is somehow unfair. That because these firms have already returned what they borrowed directly, their obligation is fulfilled. But this willfully ignores the fact that the entire industry benefited not only from the bailout, but from the assistance extended to AIG and homeowners, and from the many unprecedented emergency actions taken by the Federal Reserve, the FDIC, and others to prevent a financial collapse. And it ignores a far greater unfairness: sticking the American taxpayer with the bill.

That is unacceptable to me, and to the American people. We’re not going to let Wall Street take the money and run. We’re going to pass this fee into law. And I’m going to continue to work with Congress on common-sense financial reforms to protect people and the economy from the kind of costly and painful crisis we’ve just been through. Because after a very tough two years, after a crisis that has caused so much havoc, if there is one lesson that we can learn, it’s this: we cannot return to business as usual.

Thank you very much.

Filed under: President Obama
soundoff (58 Responses)
  1. tarheel

    What Obama is proposing to do to the Banking Industry could be applied to any industry in the country. Lawyers are a little hated so I could see a fee placed on their earnings. Basically, their answer to why they are applying this fee is simple "because we can". I just don't see how they can justify placing a fee on a bank that acted responsibly, played within the rules, and DID NOT accept tarp money. As far as them benefiting from the tarp money, you could say that about all the banks I guess. But then again, if these other banks had been allowed to fail, then the good banks would have gained financial share so TARP actually hurt them.

    January 16, 2010 10:42 am at 10:42 am |
  2. ann

    No ,but Obama will take the money and run!

    January 16, 2010 10:42 am at 10:42 am |
  3. marko

    It is very unfortunate and frightening what is Mr. Obama doing.

    Banks have mostly paid back all the borrowed money and with heavy interest. in addition to interest they also have to give some of their profits to government via special warrants so government can get some of their profits over 10 years. What Obama wants now is more money from these companies. he wants for those who responsibly paid back their dues (with huge interest and profit for government) to pay for those that did not in this case GM, Chrysler and others.

    Essentially Obama is lying when he says he wants banks to pay back every dime. Banks paid back not just every dime, but at top of that a huge interest . But Mr Obama is now saying: "BECAUSE YOU STILL WORK AND BECAUSE YOU HAVE MONEY, I WANT TO CONFISCATE MORE FROM YOU". And he wants to give that to those who don't work or don't have or even don't want to work hard enough. In this particular instance those are automakers that went down mostly because of unions and their own inability to be competitive in the market. So according to Mr. Obama, they dont have to pay back, he will just take from those who have.

    What is the next step for Mr. Obama ? Will you have to pay your neighbors mortgage tomorrow, just because you can still pay yours? Did you ever go to a store and see person in front of you buying better and more expensive food than you and paying it with food stamps? while you work 7 days a week and think that you still cant afford that?

    Will it be like in early communist states, where government officials could go into your home and confiscate property if you have too much and give it to their fellows on welfare. Because it was more convenient to confiscate than to earn it. how far will he go?

    January 16, 2010 10:43 am at 10:43 am |
  4. Fooled Again

    I thought he said he the bailouts were going to "create or save 2 million jobs". I guess he gave them the money because they helped get him in office, now it's too late, we'll be paying this back for 20 years.

    The new boss is the same as the old boss..........

    January 16, 2010 10:44 am at 10:44 am |
  5. Mike

    If nobama wants the taxpayers money back, make the banks that have not paid back the money produce some results. The idea to tax banks that do not owe tarp money and banks that never took taxpayer money must pay a tax is nothing more than STEALING from the banks. I hope alot of people file constitutional challenges to nobama and the demorat health care "theft" and the taxes they are going to try and install.

    January 16, 2010 10:45 am at 10:45 am |
  6. Nukeboy

    Obama's plan is to make banks that didn't take TARP money pay a tax. The plan also taxes banks that have paid back the TARP money that they got, with interest. I am wondering if the unions at GM and Chrysler are going to have to pay a tax, or even pay back the public funds that have gone into propping them up. Interestingly, Freddie Mac and Fannie Mae are exempted from this tax.

    This is just another violation of the Equal Protection clause of the US Constitution, in which we abuse some groups and not others.

    As for Mr. Obama's assertion that "Much of the turmoil of this recession was caused by the irresponsibility of banks and financial institutions on Wall Street", he has left out the fact that the "irresponsibility" was due to government policy. The government pushed the financial lending sector into providing financing for low income (high risk) customers. When a high percentage of those customers defaulted, it triggered the financial collapse that we have watched occur. George W. Bush warned Congress that this would happen. Most people have probably seen Senator Barney Franks response to Mr. Bush on You Tube in which he says that Mr. Bush "just hates poor people".

    January 16, 2010 10:50 am at 10:50 am |
  7. dave denver

    Unless they contribute to his future campaigns or are big time lobbyist (sorry, stakeholders).

    January 16, 2010 10:51 am at 10:51 am |
  8. liberal wingnut

    Excuse me? How much tax payer money has Obama spent??

    Not to mention not all those banks even wanted the tarp money.

    January 16, 2010 10:53 am at 10:53 am |
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