Obama On Iraq, Economy, Clinton

Harry Smith interviews Democratic presidential candidate Barack Obama in New York City on Thursday, March 27, 2008. CBS

Harry Smith spoke to Democratic presidential hopeful Barack Obama about two of the biggest issues of the campaign and when it may be time for Hillary Clinton to call it quits.

Harry Smith: Can we get out of Iraq as destabilized a situation that still seems to exist?

Sen. Barack Obama: When the violence was high, John McCain and George Bush said, "We can't leave because the violence is high." When we reduced the violence, they said, "We can't leave because we've made progress." This is part of the problem, that we have a lot of tactics that have been effective by Gen. Petraeus, but no overarching strategy. There's no clear definition of success.

Smith: Let's talk about money. Bear Sterns has been helped out a lot by the Federal Reserve. Should the federal government be in the business of bailing out companies that were involved in the subprime mess?

Obama: Well, I, this was, I think, slightly different than a bailout. We had a situation here where a run on one of the investment banks in Wall Street could have created a domino effect that could have plunged this economy into an even more severe crisis than it's already in. So, I wasn't privy to Bear Sterns balance sheets. But I think the idea that the Federal Reserve has to step in in emergency situations-is something I wouldn't challenge.

Smith: Was the federal government too late on this?

Obama: You know, this is something that a lot of observers recognized. That this economy was overleveraged, that there were no serious guidelines governing these mortgage-backed securities. That mortgage brokers were initiating the kinds of loans that people would never have a chance to pay back, but everybody was lookin' the other way 'cause everybody was makin' money.

Smith: Several people have written that even in the best-case scenario, Hillary Clinton's chances of getting the nomination for the Democratic Party are about 5 percent. When is it time for her to leave?

Obama: Oh, I think that is something that she's gotta make a decision about. And, you know, I have always said that I'm prepared to, you know go and and contest every single state-

Smith: If you are the presumptive candidate here, isn't it time that you say with some severity that we can't go on like this?

Obama: Well, no.

Smith: at the cost of losing the general election?

Obama: I don't think so. I think that what's gonna happen is that as soon as the nominee is determined, whether that is two weeks from now or in early June, that there'll be some bruised feelings. People are going to have to patch things together. And we Democrats have to get our act together and win this election.
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