Thank you, Tim, for your hard work on this issue and on our economic recovery.
The economic crisis we face is unlike any we've seen in our lifetime.
It's a crisis of falling confidence and rising debt, of widely
distributed risk and narrowly concentrated reward; a crisis written in
the fine print of sub-prime mortgages, on the ledger lines of once
mighty financial institutions, and on the pink slips that have upended
the lives of so many people across this country and cost the economy 2.6
million jobs last year alone.
We know that even if we do everything that we should, this crisis was
years in the making, and it will take more than weeks or months to turn
things around.
But make no mistake: A failure to act, and act now, will turn crisis
into a catastrophe and guarantee a longer recession, a less robust
recovery, and a more uncertain future. Millions more jobs will be lost.
More businesses will be shuttered. More dreams will be deferred.
And that's why I feel such a sense of urgency about the economic
recovery and reinvestment plan that is before Congress today. With it,
we can save or create more than three million jobs, doing things that
will strengthen our country for years to come. It's not merely a
prescription for short-term spending -- it's a strategy for long-term
economic growth in areas like renewable energy and health care and
education.
Now, in the past few days I've heard criticisms that this plan is
somehow wanting, and these criticisms echo the very same failed economic
theories that led us into this crisis in the first place -- the notion
that tax cuts alone will solve all our problems; that we can ignore
fundamental challenges like energy independence and the high cost of
health care; that we can somehow deal with this in a piecemeal fashion
and still expect our economy and our country to thrive.
I reject those theories. And so did the American people when they went
to the polls in November and voted resoundingly for change. So I urge
members of Congress to act without delay. No plan is perfect, and we
should work to make it stronger. No one is more committed to making it
stronger than me. But let's not make the perfect the enemy of the
essential. Let's show people all over the country who are looking for
leadership in this difficult time that we are equal to the task.
At the same time, we know that this recovery and reinvestment plan is
only the first part of what we need to do to restore prosperity and
secure our future. We also need a strong and viable financial system to
keep credit flowing to businesses and families alike. And my
administration will do whatever it takes to restore our financial
system. Our recovery depends on it. And so in the next week, Secretary
Geithner will release a new strategy to get credit moving again -- a
strategy that will reflect some of the lessons of past mistakes while
laying the foundation of the future.
But in order to restore trust in our financial system, we're going to
have to do more than just put forward our plans. In order to restore
trust, we've got to make certain that taxpayer funds are not subsidizing
excessive compensation packages on Wall Street.
We all need to take responsibility. And this includes executives at
major financial firms who turned to the American people, hat in hand,
when they were in trouble, even as they paid themselves customary lavish
bonuses. As I said last week, this is the height of irresponsibility.
It's shameful. And that's exactly the kind of disregard of the costs and
consequences of their actions that brought about this crisis: a culture
of narrow self-interest and short-term gain at the expense of everything
else.
This is America. We don't disparage wealth. We don't begrudge anybody
for achieving success. And we certainly believe that success should be
rewarded. But what gets people upset -- and rightfully so -- are
executives being rewarded for failure, especially when those rewards are
subsidized by U.S. taxpayers, many of whom are having a tough time
themselves.
For top executives to award themselves these kinds of compensation
packages in the midst of this economic crisis isn't just bad taste --
it's bad strategy -- and I will not tolerate it as President. We're
going to be demanding some restraint in exchange for federal aid -- so
that when firms seek new federal dollars, we won't find them up to the
same old tricks.
As part of the reforms we're announcing today, top executives at firms
receiving extraordinary help from U.S. taxpayers will have their
compensation capped at 500,000 dollars -- a fraction of the salaries
that have been reported recently. And if these executives receive any
additional compensation, it will come in the form of stock that can't be
paid up until taxpayers are paid back for their assistance.
Companies receiving federal aid are going to have to disclose publicly
all the perks and luxuries bestowed upon senior executives, and provide
an explanation to the taxpayers and to shareholders as to why these
expenses are justified. And we're putting a stop to these kinds of
massive severance packages we've all read about with disgust; we're
taking the air out of golden parachutes.
We're asking these firms to take responsibility, to recognize the nature
of this crisis and their role in it. We believe that what we've laid out
should be viewed as fair and embraced as basic common sense.
And finally, these guidelines we're putting in place are only the
beginning of a long-term effort. We're going to examine the ways in
which the means and manner of executive compensation have contributed to
a reckless culture and a quarter-by-quarter mentality that in turn
helped to wrought havoc in our financial system. We're going to be
taking a look at broader reforms so that executives are compensated for
sound risk management, and rewarded for growth measured over years, not
just days or weeks.
We all have to pull together and take our share of responsibility.
That's true here in Washington. That's true on Wall Street. The American
people are carrying a huge burden as a result of this economic crisis:
bearing the brunt of its effects as well as the cost of extraordinary
measures we're taking to address them. The American people expect and
demand that we pursue policies that reflect the reality of this crisis
-- and that will prevent these kinds of crises from occurring again in
the future.
Thank you very much.
Book/CDs by Michael E. Eidenmuller, Published by
McGraw-Hill (2008)
Text, Audio, Image Source: WhiteHouse.gov
Video Note: Last few words clipped at source
Page Updated: 7/19/2018
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