Obama Speech on the Economy: Transcript (4-14-09)

This was an excellent speech from a politician who has a clue. Read the full transcript. Excerpt below:

You know, it's been 12 weeks now since my administration began. And I think that even our critics would agree that at the very least, we've been busy. (Laughter.) In just under three months, we've responded to an extraordinary set of economic challenges with extraordinary action -- action that's been unprecedented both in terms of its scale and its speed.


And I know that some have accused us of taking on too much at once. Others believe we haven't done enough. And many Americans are simply wondering how all of our different programs and policies fit together in a single, overarching strategy that will move this economy from recession to recovery and ultimately to prosperity.


So today, I want to step back for a moment and explain our strategy as clearly as I can. This is going to be prose, and not poetry. I want to talk about what we've done, why we've done it, and what we have left to do. I want to update you on the progress we've made, but I also want to be honest about the pitfalls that may still lie ahead.


Most of all, I want every American to know that each action we take and each policy we pursue is driven by a larger vision of America's future -- a future where sustained economic growth creates good jobs and rising incomes; a future where prosperity is fueled not by excessive debt, or reckless speculation, or fleeting profits, but is instead built by skilled, productive workers, by sound investments that will spread opportunity at home and allow this nation to lead the world in the technologies and the innovation and discoveries that will shape the 21st century. That's the America I see. That's the America that Georgetown is preparing so many of you for. That is the future that I know that we can have.


Now, to understand how we get there, we first need to understand how we got here.


Recessions are not uncommon. Markets and economies naturally ebb and flow, as we've seen many times in our history. But this recession is different. This recession was not caused by a normal downturn in the business cycle. It was caused by a perfect storm of irresponsibility and poor decision-making that stretched from Wall Street to Washington to Main Street.


As has been widely reported, it started in the housing market. During the course of the decade, the formula for buying a house changed: Instead of saving their pennies to buy their dream house, many Americans found that suddenly they could take out loans that by traditional standards their incomes just could not support. Others were tricked into signing these subprime loans by lenders who were trying to make a quick profit. The reason these loans were so readily available was that Wall Street saw big profits to be made. Investment banks would buy and package together these questionable mortgages into securities, arguing that by pooling the mortgages the risks had somehow been reduced. And credit agencies that are supposed to help investors determine the soundness of various investments stamped the securities with their safest rating when they should have been labeled "Buyer Beware."


No one really knew what the actual value of these securities were, no one fully understood what the risks were. But since the housing market was booming and prices were rising, banks and investors just kept buying and selling them, always passing off the risk to someone else for a greater profit without having to take any of the ultimate responsibility. Banks took on more debt than they could handle.


The government-chartered companies Fannie Mae and Freddie Mac, whose traditional mandate was to help support traditional mortgages, decided to get in on the action by buying and holding billions of dollars of these securities. AIG, the biggest insurer in the world that had a very traditional insurance business that was very profitable, decided to make profits suddenly by selling billions of dollars of complicated financial instruments that supposedly insured these securities. Everybody was making record profits -- except the wealth created was real only on paper. And as the bubble grew, there was almost no accountability or oversight from anyone in Washington.