Obama lashes out at banks in radio address for selfishness

By Michael D. Shear
Sunday, January 17, 2010

In his weekly radio address Saturday, President Obama unleashed a verbal barrage against the nation's largest banks, accusing them of wanton selfishness by refusing to accept new regulations he and his party are proposing, and for fighting a new tax that Obama wants to impose.

"Now, like clockwork, the banks -- and politicians who curry their favor -- are already trying to stop this fee from going into effect," he said in the address. "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."

The Financial Crisis Responsibility Fee would raise $90 billion over 10 years, an amount equivalent to the eventual cost of the bank bailout, according to administration officials. The tax would be leveled against the 50 companies that Obama called responsible for pushing the nation into economic crisis. By paying the tax, the nation's largest banks would settle their debt to taxpayers.

Banks argue that the tax is unfair because many of them have already paid the government back the money they borrowed, with interest. They also say the tax would sap money that could otherwise be lent to customers.

Obama has no patience with those explanations, calling them excuses that do not fly with Americans. He takes particular umbrage at the billions of dollars in bonuses that those banks will hand out to executives starting this week.

"If the big financial firms can afford massive bonuses, they can afford to pay back the American people," he said in the address.

He added: "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."

The president's increasingly tough rhetoric makes clear that he's not afraid to take on one of the wealthiest and most powerful industries -- at least verbally.

But the Obama administration has been measured in the actions it has taken. Worried that being too aggressive might, in fact, slow the recovery, the administration has opposed some proposals from members of Congress, such as those seeking to stop or severely reduce bank bonuses.

In the radio address, Obama closed with language that suggests he will continue to try to walk a fine line.

"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," he said. "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."


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