WASHINGTON (AFP) Ã¢â‚¬â€œ President Barack Obama said Thursday that the United States was doomed to repeat its economic crisis if his financial reform bid failed, warning a free market was not a license for unfettered corporate greed.
The president, in advance excerpts of a speech he was due to give later in New York, the epicenter of US high finance, sent a tough message to Wall Street financial barons, American voters and Republicans who oppose his plans.
He recalled how he had visited the historic college at Cooper Union, where he will speak on Thursday, during his 2008 election campaign to warn of the dangers of corporate excess.
“I take no satisfaction in noting that my comments have largely been borne out by the events that followed,” Obama said.
“But I repeat what I said then, because it is essential that we learn the lessons of this crisis, so we don?t doom ourselves to repeat it,” Obama said in remarks provided by the White House.
“And make no mistake, that is exactly what will happen if we allow this moment to pass.”
The president assured investors that he believed in the “power of the free market” and a “strong financial sector that helps people to raise capital and get loans and invest their savings.”
“But a free market was never meant to be a free license to take whatever you can get, however you can get it.
“Some on Wall Street forgot that behind every dollar traded or leveraged, there is family looking to buy a house, pay for an education, open a business, or save for retirement.
“What happens here has real consequences across our country.”
As Democrats and Republicans in Congress spar over the final shape of the financial regulatory legislation, Obama argued that the draft law contained ideas from both parties.
And he addressed Wall Street bosses directly, urging them to call off armies of lobbyists the White House says are being paid millions of dollars by the industry to thwart reform.
“I am here today, because I want to urge you to join us, instead of fighting us in this effort.”
Obama is promising the most sweeping regulatory reform drive since the 1930s Great Depression.
Aides said the plan included protections for taxpayers should one financial institution pose a systemic risk to the whole economy if it failed, and limits on the size of corporate entities.
Obama will also call for reforms that restore transparency to many markets and bring risky financial instruments such as derivatives out into the open.
He will also advocate stronger consumer financial protections, aides said.
His efforts got a boost on Wednesday, when a Senate panel approved new restrictions on derivatives, a complex financial instrument blamed for partially igniting the financial meltdown from which America is just emerging.
The Senate Agriculture Committee voted 13-8 to impose new rules on trading in the assets, with just one Republican joining Democrats.
Obama’s Democratic party also needs to peel away at least one vote from Republicans in a final vote in the full Senate which could come within weeks.
Republican leaders have so far united in opposition to the bill.
They say Obama’s reforms would introduce the heavy hand of government deeper into the US free enterprise system and lead to a culture of financial bailouts, an accusation Democrats say is completely false.
Both sides of the political aisle, in the bitterness of a mid-term election year, have accused the other of scuppering efforts to frame a bipartisan bill.
Republicans face the tricky political task of opposing this next chunk of Obama’s domestic reform drive while avoiding being portrayed by Democrats as in the pocket of Wall Street finance barons blamed for sparking the crisis.
Polls show Americans, though highly suspicious of government, support efforts to rein in Wall Street, which is blamed for igniting the crisis, then piling up huge profits while the rest of the country suffers.
Obama’s financial reform effort is reaching a climax after federal regulators slapped civil fraud charges on finance titan Goldman Sachs.
The president on Wednesday “categorically” rejected claims that the White House had prior knowledge of the Securities and Exchange Commission charges.