Transcript: President Obama, Part 1
Obama Versus the "Fat Cats"
Obama: Gatecrashers Lapse "Won't Happen Again"
Obama: Senate Will Pass Health Bill by Christmas
Web Extra: Afghanistan and Pakistan
Web Extra: What Pakistan Must Do
Web Extra: Why This War?
Web Extra: His Biggest Frustration
Web Extra: Unfinished Business
Web Extra: The Party Crashers
KROFT: How many jobs do you think this new program will provide?
PRESIDENT OBAMA: Well, you know, I'm not gonna get into the prognostication business here. Here's what I know. That when I walked in to office, we had gone through a debilitating financial crisis. The banking system was close to meltdown. And in that first quarter, we lost over 3 million jobs. In December, we lost 681,000 jobs. That's before I was sworn in. January, 700,000 jobs. That was just about as I was being sworn in. The following month, before we had put any of our programs in place, we had lost another 681,000 jobs, and it just kept on going. So, I had two immediate tasks. The first was to stem the financial panic, and to stabilize the financial markets.
And although some of the decisions we made we knew were gonna be politically unattractive, they were the right things to do. And the fact is, the financial markets are stabilized. And by the way, they will have stabilized at much less cost than anybody had anticipated.
KROFT: They've stabilized to the point where three Wall Street investment banks are about to pay out $30, $40, $50 billion in bonuses this year.
PRESIDENT OBAMA: Yeah, and I'm not happy about that, so we're gonna get back to that point. Let me let me just walk this through. So, what you have is a situation in which the financial markets stabilized, the stock market stabilizes, a lot of ordinary Americans out there start with recovering what they had lost in their 401Ks and their retirement accounts. And lending starts loosening up for basic things. Buying a car student loans. Larger companies are able to get loans, and keep their businesses going.
The second problem we had was that we've all these jobs that were shed. And everybody in a panic and pulling back, business is not wanting to invest, consumers not wanting to spend. And trillions on paper at least having been lost.
Now, what we had to do was he had to make sure that there was some buoy, some stabilizer in the economy so that it didn't go into a Great Depression. And that's why we passed the Recovery Act. And for all the criticism that it received from the other side --and we got no help from any Republicans, other than a couple, in passing it -- what we now know and every economist who's looked at it will acknowledge this, is that it helped us [stem] the panic and get the economy growing again. And it probably saved somewhere between a million and a million and a half jobs. But in addition to that, what it also did was it made sure that everybody had enough confidence that you did not see a complete collapse.
All right, so financial market stabilized, economy growing again. The problem we now face is that in any recession, job growth is what's called a lagging indicator. Businesses don't start hiring again until they have some confidence out there that there's actually a market for additional goods and services. That's always true in any recession.
Usually, it's worse when you have a big financial crisis like this that prompts the recession. And this one's been exceptionally bad, partly because businesses were very spooked, and it was a global crisis. But partly because, frankly, businesses have figured out that maybe they can sustain themselves just with fewer employees producing the the same amount of goods and services.
And what's also happening is that the small businesses, and some medium-sized businesses are still having trouble . . . 'cause the banks are still pulling back and being pretty cautious in terms of their lending practices. So, what we want to do is this: How can we accelerate what we think will be additional hiring that eventually has to happen anyway. Sooner or later, these businesses are gonna say, you know what, there's a market out there, we could be making more products. We can't just keep on trying to double the hours of the workers we have. So, there's gonna be some hiring taking place.
Can we accelerate that so that you start getting a virtuous cycle, more people being hired, people then going out and shopping more, increasing consumer demand, which means more business and more hiring. Are there ways to accelerate that, number one.
Number two, are there ways to loosen up additional lending for small businesses because they are the major job producers out there. And number three, are there some particular targeted areas that could be engines for growth in the future. One of those being clean energy and you know, the whole green industry that should be developing.
So, rather than see this as a second stimulus -- we can't afford that right now -- what I'm interested in is a targeted jobs package that can help to boost what's already taking place. Companies are already starting to hire again. We've got good jobs numbers for the first time essentially. At least they're not firing anymore. And some companies are starting to inch back into the hiring of workers.
Is there a way to boost their confidence, and I think there are. Number one, by making sure that we are loosening up lending for small businesses, and building on some of the successes that we've already had. Number two providing some targeted tax breaks for companies if they are making new hires now as opposed to waiting and sitting on the sidelines. Number three -- are there some extensions of programs that were way oversubscribed around alternative energy as well as weatherization programs, where that whole sector can really take off. And we think we can do that in a package that is manageable and is not gonna solve our entire unemployment problem, but will make some significant progress.