What Obama Could Have Said by murphy on February 25, 2009

Members of Congress, Justices of the Supreme Court, and especially my sister and fellow Americans, Today I instructed my Treasury Secretary and the chairwoman of the FDIC to begin the process of taking temporary receivership of the 19 largest banks in this country. These banks are currently insolvent and no amount of government stimulus or bailout funds can make them whole again. Prolonging the anxiety of Main Street as well as Wall Street by proposing short-term fixes to a systemic crisis has not worked and we will not continue the failed policy of quick-fix bandaid solutions that aim to reassure short-term investors by offering them short-lived confidence instead of the long-term security our economy and our citizens deserve.

We saw what happened when Lehman Brothers was allowed to crash land into bankruptcy and we will NOT let that happen again to our economy.

The FDIC has a long and stellar record of walking failed banks through receivership so that deposits are safe, assets are protected, and careful, necessary lending can resume. In fact, at this very moment Chairwoman Bair and the regional FDIC’s are resuscitating no fewer than 40 regional banks across the country.

Reckless deregulation, feckless lending, and a near-criminal lack of oversight by the supposed stewards of our financial system brought us to this point and those three causes also make the solution both obvious and necessary.

We must and we will:

  1. Rewrite iron-clad regulations on how banks operate.
  2. Reinstitute scrupulous lending standards.
  3. Reinvigorate our oversight bodies, especially the Securities and Exchange Commission and the board of banks overseers.

The traders, analysts, and investment experts who run Wall Street are some of the most brilliant people in the world. Smart, fearless, and intensely focused, they have created immense amounts of wealth for their investors, themselves, as well as for workers and regular Americans over the past 25 years. But they flew too close to the sun and the reckless exuberance of too many of them went unchecked. The disastrous results are there for anyone to see on the tickers and on the 24-hour cable news channels.

You may not WANT to face the fact of a decade of paper wealth up in smoke; I may not want to face that fact, but face it we must and face it we will.

There is no reason to worry that Wall Street won’t recover. As I said earlier, the men and women who make Wall Street tick are some of the smartest and fearless people on Earth. They WILL work in the new environment because flexibility, adaptive, creative thinking, and swift response to changing conditions is WHAT THEY EXCEL AT. It is why they are wealthy and why people with capital choose to hand it over to them to make it grow.

What’s hurting the financial markets most today is uncertainty about which direction the government plans to take. Tonight we put an end to that uncertainty, and tomorrow Wall Street will wake up and get back to work. They’re Americans and they are innovators — that’s what they DO.

For homeowners who are facing foreclosure, we will do what we can to help you and your families, but we cannot solve all of your problems. In areas hardest hit by the collapse of inflated home values, there will continue to be people who cannot afford their mortgage payments anymore and many of them will lose their homes to foreclosure. But we can, we must, and we will do everything we can to prevent this where we can and to soften the blow where we can’t.

To these ends, we will:

  • Institute an across the board freeze on foreclosures while the FDIC completes the transfer of operations from the CEO’s of the major banks. However, a freeze on foreclosures does not mean a moratorium on paying your mortgage. If you don’t continue to make monthly payments, you will be expected to pay the past due amounts eventually, and if you can’t you may lose your home.
  • Allow every American who currently has a mortgage and meets income requirements to refinance with a federally-backed, conforming loan at 5% interest.
  • Make it illegal for foreclosures to be recorded on consumer credit reports after five years.

These measures will relieve some of the anxiety that so many millions of Americans are feeling today. A universal and unpleasant sense of distrust has crept into all of our civic relationships. Neighbors are feeling stingy about “bailing out the other guy” while their own ship may be sinking. Distrust of financial leaders, politicians, and the media has never been higher, and this incipient suspicion can easily become a toxic agent that tears at the fabric of unity and common purpose which connects all Americans to each other. That social and civic fabric of national unity has rarely appeared more fragile and prone to rending than it does today, and continuing to wear and tear at the basic trust which is necessary to bind ALL Americans, rich or poor, struggling or secure, to each other is perilously reckless. It is an outcome to be dreaded and avoided at all costs.

Tonight I am asking ALL Americans, and especially YOU members of Congress here in this hall, to help us regain and rebuild our trust in one another so that we can work together again as citizens, public servants, elected officials, and industry leaders. Not with words and vows. This will never be accomplished with grand speeches or pretty promises of faith. Only actions will work.

Our work, ALL of our work, from the Senate chambers to the boardrooms to the Oval Office, must be done with integrity. It must be predicated by manifested principles of fairness, clean dealing, and transparency. Patience, planning, and perseverance are what is necessary for America today, and Americans — all of you and all of us — must start practicing them now. Anything less will shortly lead us to ruin, and we will have no one to blame but ourselves.

Thank you, good night and good blessings on America.

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One Response

  1. obama can’t help homeowners to stay in their homes – and he says we can’t solve all of your problems. I agree they can’t solve all problems, but they sure don’t have any problem throwing trillions of dollars to solve problems that were created by B of A, Citibank, AIG and Wells Fargo (to name a few). Do the stupid idiots that voted for Obama now see him for the tow faced, elitist, piece of shit opportunistic liar that he is? Geezuz people – wake up.

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