December 13th, 2009
11:06 AM ET
9 years ago

Obama adviser slams Wall Street

[cnn-photo-caption image= caption="Larry Summers took issue Sunday with complaints from Wall Street about Democratic plans for more financial regulation."]
Washington (CNN) – A top economic adviser to President Obama said Sunday that Wall Street should not be resisting Democratic efforts to impose new financial regulations in the wake of last year’s financial crisis.

“It was irresponsible risk-taking that brought the economy to the brink of collapse,” Lawrence Summers, the Director of Obama’s National Economic Council, said about Wall Street Sunday on CNN’s State of the Union. “It was their irresponsiblilty in many cases that brought the economy to collapse. And, frankly ... it wasn’t the first time.

Watch: Summers slams Wall Street

“And they don’t get, in some cases, that they wouldn’t be where they are today - and they certainly wouldn’t be paying the bonuses they’re paying today - if their government hadn’t taken extraordinary actions. Extraordinary actions, not frankly with the motivation of helping them, but with the motivation of helping the economy but of which they were nonetheless the beneficiary.”

Summers also told CNN Chief National Correspondent John King that it was “wrong” for Wall Street to be “complaining about serious regulation directed at making sure this never happens again.”

“For firms that have benefited from taxpayer support to be complaining about the government burdening them is, frankly, a bit rich,” Summers also said Sunday.

After receiving so much help from the public in the form of support from the federal government in the past year, Summers said “now the financial community’s got to think about its obligations to the country.”

Summers identified preventing another near-collapse of the entire financial system, improving the flow of credit, preventing foreclosures, and improving lending to small businesses as areas the president might discuss with the heads of some of the nation’s largest banks in a meeting set for Monday.

“The president is going to focus on what the bankers can do for their country, what obligations they should feel,” Summers told King.

soundoff (58 Responses)
  1. sniffit

    Are you insane?

    December 13, 2009 11:13 am at 11:13 am |
  2. Claudia, Houston, Tx

    Wall Street must have imposed regulations because they always find loop holes to cheat and steal while we pay. The only thing I hope is that the regulations are stiff and have significant consequences for these thieves.

    December 13, 2009 11:23 am at 11:23 am |
  3. JS

    My mom used to solve problems like this with a wooden spoon. In third grade it was detention. It would be interesting to see if this spoiled brat behavior would improve if they all had to stand in a corner and get a good paddling.

    December 13, 2009 11:23 am at 11:23 am |
  4. joe smith

    for once, the truth about a select group of greedy money hungry dual citizenship economy busting wags.

    December 13, 2009 11:24 am at 11:24 am |
  5. Henry Miller, Libertarian

    The problem is that those of us on the bottom of the economic food chain–ordinary people–don't get much of a choice. We either get screwed by wildly irresponsible Big Business or wildly profligate Big Government. In the first case, we get screwed by rip-off prices, artificial shortages, and so on. In the second case, we get screwed by outrageous taxes, imbecilic laws, and idiot bureaucrats always leaning over our shoulders.

    No matter what, We the People always come up losers.

    December 13, 2009 11:30 am at 11:30 am |
  6. Monster Zero

    If the "Government" had taken the time to properly incumber the loan funds allocated to Wall Street with actual specific and restrictive conditions of use, such as penalties and payback requirements forcing Wall Street to use the money in the way the Government wished, then we may not have found ourselves in the position of being subject to the Wolves of Wall Street. Wall Street is in the business of making money, remember the old saying " A fool and his money are soon parted", well the inexperience and lack of fundamental common business sense by our elected officials has parted the taxpayer from their money. Please do not worry though, as Wall Street is in the business of making money, Washington seems to be in the business of printing and spending money! Regulate the regulators with some common sense! Free men for a Free Market!

    December 13, 2009 11:30 am at 11:30 am |
  7. Jim

    And guess which party is gearing up to try to resist all reform efforst? Hint: John Boehner met will all the top financial industry lobbyists last week to enlist their support to resist reforms.

    December 13, 2009 11:32 am at 11:32 am |
  8. Politicians caused the crash

    Yes, Wall Street is driven by the lust for money, but so are politicians. It was politcians like Cris Dodd, Brank Franks and others that forced the banking community to make sub-prime loans that caused the crash. Their special interests groups pushed for housing loans for people who could never afford to pay their mortagages in the first place. Now we the tax payers are having to bell out those loans.

    To have a free market, politicians need to stop micromanaging the markets.

    We can not afford more of this big government spending.

    December 13, 2009 11:35 am at 11:35 am |
  9. Mike1952

    What was done was perfectly legal at the time. There was no stealing as that would imply illegality. This whole mess stems from the mortgage debacle encouraged by the government (both democrat and republican). Spreading risk is a wise thing to do and the instruments that evolved were designed to accomplish that. The caution now is to refrain from overeaction that would constrain financial markets too much. Government regulation to a degree is acceptable in a capitalist economy. But when it hinders completely the free exercise of free markets it is unacceptable.

    December 13, 2009 11:36 am at 11:36 am |
  10. Annie, Atlanta

    Just like insurance companies should not be fighting against the fact that they have a stranglehold on us, deciding who lives and who dies. Wonder who will win? Here's a clue: those with the most money. Congress is bought and paid for and we the people lose.

    December 13, 2009 11:36 am at 11:36 am |
  11. Jimmy James

    Financial regulations are like gun law. The government wants to add more but doesn't enforce what they have. Crooks always find a way to screw the system. Doesn't matter if it's big business or government. I find it troubling that we are asking the fox to watch the hen house.

    December 13, 2009 11:39 am at 11:39 am |
  12. Florence

    Larry Summers call out John King for misrepresenting number of jobs the recovery job saved or created. King ideology shows every time he interviews a democrat or administration official. With Summers he didn't put all the information on his board; CBO statements on jobs created or that the recovery was a 2 year projection. But Summers caught King in his deceit and misrepresentation to CNN viewers. And King always interrupting democrats with "let me jump in for a second" before anyone can make their point. Watch he never does this the republican guests. John King is a tool and is part of the problem with media misleading the public with junk instead telling it like it is. We need more cronckites in the media not journalists using their platform to build ideological audiences.

    December 13, 2009 11:40 am at 11:40 am |
  13. MARK

    I'm so sick of Wall Street....all they've accomplished is paying BIG bonuses to themselves. They've raped and re-raped the American people.

    December 13, 2009 11:41 am at 11:41 am |
  14. Nate

    Wall Street was "well protected" by President Bush and his Republican thugs.......Republicans love lobbyists!!

    December 13, 2009 11:43 am at 11:43 am |
  15. indiana voter

    What about those irresponsible politicians that played a huge part in the collapse as well, such as Chris Dodd, Barney Frank, Chuck Schumer, and the Democrat controlled congress? I know liberals don't like to hear this, but the economy didn't start collapsing until the Democrats took back the congress in 2006. It seems to me, we need to be telling Congress that they are a big part of the reason why the economy collapsed, on both sides of the aisle.

    December 13, 2009 11:43 am at 11:43 am |
  16. Allison

    Republicans are already lining up to resist efforts to impose new federal regulations.....they've lined their pockets with gold thanks to Wall Street. . . .Republicans are gluttons for big bucks!!

    December 13, 2009 11:46 am at 11:46 am |
  17. Monster Zero

    Hey, didn't Jimmy Carter and Bill Clinton deregulate the banks? Wasn't it the Republicans in 06' howling for regulation of Fannie Mae and Freddie Mac with Franklin (the $90 million dollar Man Obama campaign finance manager) Raines state in those Senate hearing that the real estate investment of tax dollars was solid as it never went down? Yeah, we need more Government in our lives.....

    December 13, 2009 11:47 am at 11:47 am |
  18. Susan

    Republicans don't want anything regulated that's why we're in such a mess across the board. Eight years of George W. almost did us reality, it did.

    December 13, 2009 11:47 am at 11:47 am |
  19. len

    CNN, you are so very unfair and balanced in your reporting.
    America is watching your team of analyst try to pick apart
    the Obama White House. John King, Bill Bennett, Dana Dash,
    Ed Henry, Gloria, – all Against Donna Brazil???? Is This
    an even playing field? No matter how you try to spin it – America
    is not stupid – we see what you are doing. We would like you
    to report fair and balanced.

    December 13, 2009 11:48 am at 11:48 am |
  20. Halls

    America has become a snake pit of scams. All this, due in part to no regulations on anything. Insurance, healthcare, banking...the list goes on and on. The American people are scamed from every direction. Shameful.

    December 13, 2009 11:49 am at 11:49 am |
  21. Jimmy

    Wall Street and Republicans are driven by a huge lust for money.......Republicans will come out screaming against regulation, their livlihood will be strained. Enough said.

    December 13, 2009 11:50 am at 11:50 am |
  22. They call me "tater salad"

    Regulations don't amount to squat if there's no ENFORCEMENT to go along with it........That's the problem!!!!

    December 13, 2009 11:51 am at 11:51 am |
  23. Walter J Smith

    Well, the top most irresponsible risk takers are those of us who put Obama into office; second tier: Obama putting Summers & Geithner into office; the industrial financiers, bankers & insurers are predictable thugs.

    But Summers inadvertently revealed he is aware of one horrible truth: it is "their government" that gave those thugs all that money.

    The question is why we keep paying taxes to their government.

    Stop voting; it only encourages the bastards.

    December 13, 2009 11:56 am at 11:56 am |
  24. fred

    Democrats just hate people who make money so much. If it was up to dems, we'd all be on welfare, and Obama would be our mother.

    December 13, 2009 11:57 am at 11:57 am |
  25. Reaganomics Leads To Feudalism

    These filthy rich, grossly overpaid executives need to count their blessings. What they DESERVE is to be taken out, lined up against a wall, and SHOT!

    December 13, 2009 11:59 am at 11:59 am |
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