Obama Says Economy, Iraq Are Top Issues

Energy And Health Care Follow Ending The War And Dealing With The Wall St. Meltdown As Key Priorities

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A year ago, Barack Obama was an even longer shot to win his party's nomination than John McCain. Against improbable odds, the first-term senator from Illinois defeated Hillary Clinton with a message of change and is trying to convince the country that he is ready to lead, running against the record of one of the most unpopular administrations in American history.

Steve Kroft: This is the biggest financial crisis this country has had, a lot of people say, since the Great Depression.

Sen. Barack Obama: Right.

Kroft: What caused it? Who's to blame?

Obama: Hey, look, there were a lot of factors involved. But I think there is no doubt that if we had had a regulatory system that had kept pace with the changes in the financial system, that would have had an enormous impact in containing some of the problems that are out there. I mean, you've got greedy CEOs and investors who are taking too much risk. But that's why we set up rules of the road, to prevent that from spreading into the system as a whole. And, unfortunately, we had a lot of deregulation. And instead of modifying the rules for this new economy, we just eliminated them. So we've got to change our regulatory system. But, Steve, there's a bigger problem. And that is that the economy has not been working for ordinary Americans.

Kroft: Senator McCain made some of the same noises this week, blaming Wall Street greed, promising reform and oversight, and new regulations to protect investors. What's the difference between the two of you?

Obama: Well, the difference is, I think, that I've got a track record of actually believing in this stuff. And, you know, Senator McCain, fairly recently, said, "I'm a deregulator." It's one of his top chief economic advisors was Phil Gramm , who was one of the architects of deregulation in this sector. And he's always taken great pride in believing that we have to eliminate regulations.

Kroft: Really in some ways, this past week has been historic.

Obama: Absolutely.

Kroft: Do you think that Secretary of Treasury Paulson has done the right thing?

Obama: I think by the time Secretary Paulson and Federal Reserve Chairman Bernanke were looking at these problems, they had no good options left.

Kroft: Should the government be bailing out all of these banks and insurance companies? We're talking about hundreds and hundreds of billions of dollars.

Obama: I think that our basic principle has to be that you don't bail out shareholders. You don't bail out CEOs who are getting golden parachutes and $100 million bonuses. That you are doing everything you can to protect taxpayers, making sure that people are able to stay in their homes, and that their mortgages don't go overboard because of bad decisions that other people make.

Kroft: You think we're in a recession?

Obama: Oh, I think there's no doubt that we're gonna see, when the numbers come out, that we are officially in recession. I think, for a lot of people, they've been feeling like we've been in a recession for years now. When their wages and incomes don't go up, and the cost of gas and groceries and home heating oil and prescription drugs are all going up, that feels awfully like a recession to them.

Kroft: Do you think the worst is over?

Obama: It's hard to say.