February 24th, 2009
09:30 PM ET
9 years ago

Obama: Economy is a 'reckoning' for past poor decisions

WASHINGTON (CNN) - President Barack Obama on Tuesday described the nation's financial woes as a "reckoning" for poor decisions made by both government and individuals.

"A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future," Obama said in his first speech to a joint session of Congress. "Regulations were gutted for the sake of a quick profit at the expense of a healthy market.

"People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day."

Watch: "We will recover," Obama says

He said his economic agenda - which includes money to jumpstart job-creation and invest in green energy, health care and education - is a first step to turn things around.

"Now is the time to act boldly and wisely - to not only revive this economy, but to build a new foundation for lasting prosperity," Obama said.

Filed under: Obama address
soundoff (15 Responses)
  1. jonny

    i heart obama

    February 24, 2009 09:32 pm at 9:32 pm |
  2. ChrisP!

    I pray we can put our differences aside and work together for the well-being of us all. The UNITED States of America!!! I'm willing to do my part ... are you?

    February 24, 2009 09:40 pm at 9:40 pm |
  3. Ula Nejad Sacramento, Ca

    Does he know the difference betweeen quitters and suckers.? He is a corrupt president. Full stop.

    February 24, 2009 09:44 pm at 9:44 pm |
  4. Chuck

    What is that burlap bag Pelosi is wearing?

    February 24, 2009 09:53 pm at 9:53 pm |
  5. Salas

    Yes i agree we got here through poor decisions thanks mr bush,but now lets face the future since the past is gone.He has to double his effort to succeed,we deserve no less mr president obama.

    February 24, 2009 10:03 pm at 10:03 pm |
  6. Helen

    The Republicans are spending a lot of time telling everyone that Obama's stimulus won't work. Are they afraid it may work? They need to just shut up and support what the country wants. The last 8 years they managed to put the economy in the toilet. Where were their good ideas then? I am willing to give the issue a new approach. We need to try something new if we are going to get any improvement, because what we have done the past 8 years has not helped and had made things a lot worse for many Americans.

    February 24, 2009 10:14 pm at 10:14 pm |
  7. Jan Illinois

    These Republicans that stand up in congress and the house act as though THEY were no where to be found when Bush was in office reeking havok on America and leaving us broke, economically and mentally. We will all remember that this president Inherited this mess. If Jindal is what the republicans are going to offer, we will win again, it's the equivalency of putting Richard Simmons in the ring with Tyson.

    February 24, 2009 10:53 pm at 10:53 pm |
  8. Typical White Person

    He conveniently forgot to mention that it was the Democrats who forced banks to even START making loans to people who could not afford them. Barney Frank was front and center on that decision and defended it and Fannie Mae/Freddie Mac degeneration to the very end and beyond since he is STILL defending them.

    February 24, 2009 10:54 pm at 10:54 pm |
  9. Indy

    And who's the problem? The Democrats, who have had a controlling majority in Congress for thirty four of the last forty years.

    February 25, 2009 12:39 am at 12:39 am |
  10. Danielle

    As our new president, Obama is really making every effort he can to improve the American economy. He really has the top priorities on his check list like; job-creation, invests in the green movement, health care and education. There are the first steps in fixing all the important problems economical issues. By evaluating them and going through each of his ideas will hopefully help better American terrible economy crisis.

    February 25, 2009 12:42 am at 12:42 am |
  11. J.P.

    "People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway."

    Hey numbnutz... banks don't like risk. Banks don't like to lend to people they think won't pay them back. Those people are called "bad credit risks" for a reason.

    Now, why would banks EVER loan to people they KNOW to be bad credit risks? It's not in their self interest to do so (again, go back to basic human motivation). Further, banks don't codify financially-risky ideas into industry-wide lending standards... that is, they don't do these things unless they're being forced to do so at legal gunpoint by legislators high on the fumes of social-reengineering gas.

    So-called "fair lending and affordable housing" and the socialist legislative push to put every Harry-Hard-Luck and Sally-Sob-Story into a home complete with a media room and granite counters, regardless of ability to pay is EXACTLY what has led to the economic slowdown... further exacerbated by more threats of government intrusion into the market. Home ownership is not guaranteed in the Constitution, nor is it a right. If you can't afford to purchase a home through conventional means (financially-conservative conventional lending practices, not "mortgage yoga"), then maybe renting is a good idea for you.

    You want to restore the markets? Send Congress on a two-year paid vacation to Hawaii, anyplace, anything, just stay the hell away and shut up and let the market settle down. Congressmen, STOP ADDING INSTABILITY!

    February 25, 2009 01:23 am at 1:23 am |
  12. Watching

    The AP Fact Check gave a good take on this

    OBAMA: "Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day."

    THE FACTS: This may be so, but it isn't only Republicans who pushed for deregulation of the financial industries. The Clinton administration championed an easing of banking regulations, including legislation that ended the barrier between regular banks and Wall Street banks. That led to a deregulation that kept regular banks under tight federal regulation but extended lax regulation of Wall Street banks. Clinton Treasury Secretary Robert Rubin, later an economic adviser to candidate Obama, was in the forefront in pushing for this deregulation.

    February 25, 2009 01:23 am at 1:23 am |
  13. Ivan

    Obama hit the nail on the with this one. Reagan cut taxes, Bush the son cut taxes, and at the end of both Presidency the country ended up with record deficits and debt.
    The audacity of the Republicians saying they know best how to revive the economy, while hoping we won't remember that they're the ones that got into this abyss.
    Fool me once shame on you, fool me twice shame on me.

    February 25, 2009 01:34 am at 1:34 am |
  14. Steve in Las Vegas,NV

    I see more needed regulations coming. Too many businesses complained that they were too restrictive, costly or harmful to their busineses so BUSHCO and their friends gutted them and now we are paying the price.

    Regulations in the financial world led to the excesses, such a gigantic paychecks and huge bonuses were the order of the day and yet the arrogance of these same people who plundered the commpanies that they ran into the ground still persists. These execs still feel a sense of entitlement, because they feel no shame for their bad decisions.

    February 25, 2009 02:37 am at 2:37 am |
  15. Leah from FL

    JP – you need a little professional therapy to deal with your misplaced anger!! Please get help. You don't even mention that the investors and speculators drove up housing prices in the first place. Then the Mortgage Brokers (who only make $$ selling loans) actually told clients to fluff up their numbers to look good for a bigger mortgage (remember the no doc loans too??) so the mortgage companies would ok the loan because that is how they make money. It's all about the money and the do anything theory investors have to get it. I actually had a mortgage broker tell me to fluff up numbers or do a true no doc loan to get a house in 2007. I was told that if I needed to sell later, I would make $$ due to the wonderful housing market we were in then, and that as the broker put it "housing prices only go up!" That same story was told to millions others – now we have the problem to deal with while the brokers & investors have already their $$. Investors with money to spend now are again snapping up bargain priced houses that the foreclosed upon can not get at the new lower price. Again the richer among us lie, cheat and steal and still come out better than Joe & Jane Average American. Now that the housing market is bust thanks to the investors, the investors tried to do the same thing to the gasoline industry – remember the $4.00+ gallon prices recently?

    February 25, 2009 10:33 am at 10:33 am |