- The Washington Times - Thursday, April 22, 2010

President Obama took his push for a regulatory overhaul of Wall Street to New York City Thursday, saying he believes in the nation’s free-market system but that new curbs are needed to prevent another financial collapse.

Speaking to a mixed audience that included bank executives, union leaders and government officials gathered in the heart of the nation’s financial sector, Mr. Obama argued that tougher rules would actually help the financial industry and the larger economy, not hurt them.

“I believe in a strong financial sector that helps people to raise capital and get loans and invest their savings,” Mr. Obama said in the speech, which took place at Cooper Union college in Manhattan. “But a free market was never meant to be a free license to take whatever you can get, however you can get it.”

Mr. Obama’s remarks were not as sharp as they have been in the past — such as when he referred to bankers as “fat cats” — but he still chided Wall Street for forgetting that “behind every dollar traded or leveraged, there is a family looking to buy a house, pay for an education, open a business or save for retirement.”

Hitting back against Republican criticisms of Democrats’ financial overhaul bill moving through the Senate, Mr. Obama painted the legislation as a series of common-sense safeguards to prevent another crisis. He addressed head-on the idea that the proposal would perpetuate bailouts, saying the argument makes for a good sound bite but is “not factually accurate.”

The Senate bill, though it does not go as far as a House bill that passed last year, would generally give the government more power to break up troubled firms and create a new consumer protection entity. The White House and Senate Democrats have been eying potential Republican backers of the bill, though none have officially signed on. Because Democrats have 59 votes in the chamber, they need at least one member of the GOP to support the measure to overcome procedural roadblocks.

Speaking directly to the bankers in an audience that included executives from Goldman Sachs, Bank of America and JP Morgan Chase, Mr. Obama said, “We will not always see eye to eye,” but argued that choosing between the two extremes of unfettered markets and unlimited government intervention is a “false choice.”

“Our markets are only free when there are basic safeguards that prevent abuse, that check excesses, that ensure that it is more profitable to play by the rules than to game the system,” Mr. Obama said.

The White House recently came under fire from critics who suggested a Securities and Exchange Commission investigation into Goldman Sachs’ role in the mortgage meltdown was purposefully timed to coincide with the push for financial reform, an accusation the administration has adamantly denied.

Separately, the administration took heat this week after former White House lawyer Gregory Craig, now in private practice in Washington, was retained by the Wall Street titan. The White House said it was not consulted about the move, which some say raises ethics concerns due to the administration’s two-year ban on lobbying.

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