President Barack Obama on Wednesday expressed confidence in Treasury Secretary Timothy Geithner, saying Geithner was doing well under difficult circumstances. “I have complete confidence in Tim Geithner and my entire economic team,— Obama said during an appearance at the White House.
Obama argued that, “having been played a bad hand,— Geithner “is making all the right moves— and has had to deal with more simultaneous crises than perhaps any Treasury secretary since Alexander Hamilton.
Geithner has come under criticism because of his failure to immediately inform the president about huge bonuses being paid out by AIG even as the insurer receives massive funding from the federal government. Some lawmakers and foreign leaders have also been critical that Geithner has not been more detailed about how he plans to loosen up credit markets, and there is concern that several top Treasury posts remain unfilled. Rep. Connie Mack IV (R-Fla.) on Wednesday became the first lawmaker to call for Geithner to resign.
Obama added that he ultimately bears responsibility for any mistakes. “The buck stops with me,— Obama said.
Obama spoke during a scheduled appearance — which turned into a mini-news conference — on the South Lawn before departing on a trip to Southern California. The president, who said he had just spoken to House Financial Services Chairman Barney Frank (D-Mass.), called for new regulations that would prevent a repeat of the “mess— created by AIG.
Obama was not specific about what he wants to do, but he said it would include a “resolution authority— that would have similar powers to those the FDIC has over banks. “My economic team’s going to be consulting with the Hill, we’re gong to be moving that on a fast track,— he said.
Obama also slammed the “culture— that led to the AIG meltdown, hinting at more reforms of the system than merely establishing a new regulatory body. He said “excess— greed, compensation and risk taking had left the country vulnerable.
“I hope that Wall Street and the marketplace don’t think that we can return to business as usual,— Obama said. “The business models that created a lot of paper wealth but not real wealth in this country and have now resulted in crisis can’t be the model for economic growth going forward.—
Obama said the country would have to end the “constant bubble-bust mentality— and that “shareholders and boards of directors have to hold executives more accountable for their compensation scales,— suggesting the AIG executives were making too much money.
Obama added that “we believe in capitalism,— asserting that better regulation would help markets.
The president accused some of “feigning outrage— about AIG, saying these were the same people who in the past have counseled against meddling in markets.