In an interview that will air on ABC’s Nightline tonight, President Barack Obama said that despite Wall Street’s desire for government to solve their problems with a big pile of money, there will be no easy way out for them.
“Well, you know, Wall Street, I think, is hoping for an easy out on this thing and there is no easy out. Essentially, what you’ve got are a set a banks that have not been as transparent as we need to be in terms of what their books look like. And we’re going to have to hold out the Band-Aid a little bit and go ahead and just be clear about some of the losses that have been made because until we do that, we’re not going to be able to attract private capital into the marketplace.
The president continued, ” And so, you know, I think that you have two choices in this situation: You can prolong the agony and shareholders will be happy until they’re not happy, and that could be a year from now or two years from now, or, in the case of Japan, eight years later. Or you can just go ahead and acknowledge that, yeah, there’s a lot of work that has to be done to put these banks back on a firmer footing. ”
The reality is that Wall Street is going to continue to cry and pout until the government gives them more taxpayer money. It must be stated again that these are the same people whose greed and mismanagement almost caused the entire financial system to collapse. The worst thing the government could do is buy back all the bad assets with no strings attached. The question still remains from the original TARP debate. Why would the government buy assets that have limited or no value right now?
Treasury Secretary Tim Geithner said that it will cost $2 trillion to clean up the mess in the banking system. His plan includes a combination of private and public funds. The government already tried dumping money into the system with the TARP, and while it prevented an immediate crisis, it did not solve the systemic problem. The bottom line is that there is going to be no more free lunch for Wall St. Things are going to change. Regulation is coming back, and Wall Street can cry and sell off all that they want, but they will be facing consequences for their actions.
Mr. Easley is the managing editor. He is also a White House Press Pool and a Congressional correspondent for PoliticusUSA. Jason has a Bachelor’s Degree in Political Science. His graduate work focused on public policy, with a specialization in social reform movements.
Awards and Professional Memberships
Member of the Society of Professional Journalists and The American Political Science Association