Read the entire interview transcript:
BRIAN WILLIAMS: I asked this at the last democratic debate. Are-- are hedge funds good or bad for America? Is it right for these hedge funds making billions and billions of dollars along with the hedge fund managers?
BARACK OBAMA: Well, I don't think that hedge funds are bad per se. I think they're just one more financial tool. And in that sense, they're useful. But I think that what we've seen are a number of rules that skew in the favor of folks on Wall Street. Private equity funds and hedge fund managers who are paying a lower tax rate than their secretaries.
There are some failures in the regulatory regimes that have been set up. For example, I talked today-- that there may be an incestuous relationship between ratings agencies that are determining the quality of investments and the people that they're rating.
So, what we need is stronger market transparency and accountability. That's good for everybody and the marketplace. We have to think about how are we investing to make sure that everybody can compete in this global economy? And that means investing in education and it means investing in things like energy independence. And we've got to rebuild our social safety net, particularly on health care and retirement security, where a lot of ordinary Americans are seeing that security slip away. When that security slips away, they are more likely to turn to things like protectionism that, over time, may constrict economic growth overall.
BRIAN WILLIAMS: Who or what do you think is to blame for this current mortgage and credit crisis? Who do we see about that?
BARACK OBAMA: Well, I think there are a lot of folks who ought to take some responsibility. The original idea was a good one, which was that let's see if we can distribute this more broadly and make it easier to provide loans to people who otherwise might be-- not be able to get a mortgage loan.
Over time, what ended up happening was that the appraisers started loosening their standards. The mortgage brokers started playing around with their standards. Then, the people who were buying these securities weren't really checking very carefully to see whether the underlying mortgage could support the loans that were made.
And so, over time, you had everybody I think conspiring to just do what felt good and what was making a lot of money. The problem was that a lot of homeowners were induced to take out loans that they could afford only if home prices continued to go up.