On the same day his Treasury secretary detailed a $2 trillion plan to stabilize the U.S. banking systems and the Senate narrowly passed an $838 billion economic stimulus bill, President Barack Obama said, "we are in a perfect storm of financial problems."
The Dow Jones industrial average dropped 382 points following today's news, and Obama said it's important to recognize that "there is no easy out" when it comes to the current economic crisis.
"Wall Street, I think, is hoping for an easy out on this thing, and there is no easy out," Obama told "Nightline" co-anchor Terry Moran in an exclusive interview in Fort Meyers, Fla. "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, there's a lot of work that has to be done to put these banks back on a firmer footing."
Earlier today, the president held a town hall meeting in Fort Meyers, an area hit hard by foreclosures and unemployment.
After a rough week of criticism over his handling of several cabinet nominations and the stimulus package, Obama was clearly happy to be back on the road and energized by the almost 2,000 person crowd. During the town hall meeting he made several jokes, and took questions in "boy, girl, boy, girl" order.
Obama said he tries to be realistic but not alarmist when addressing the American people about the economy.
I'm constantly trying to thread the needle between sounding alarmist, but also letting the American people know the circumstances that we're in," he said. "And the fact of the matter is, is that we are in not just an ordinary recession, we are in a perfect storm of financial problems and now, a decline in worldwide demand that is resulting in huge numbers of jobs being shed, the lowest consumer confidence we've seen, credit locked up."
Obama stressed the value of the country's assets, work force, universities, companies and infrastructure, but said that while he believes the economy will turn around, "we're not going to get there by pretending that we don't have some very big problems, and I think the American people understand that."
"We've got to keep perspective. We're not going through the Great Depression."
Obama admitted it would be difficult to estimate how much the plan to assist the banking system, announced today by Treasury Secretary Timothy Geithner, would cost the American taxpayer.
"I can't say the ballpark figure," he said. "What happens is going to depend on how the markets respond over the long term, not today or the next day but a month from now or two months from now -- how effective we are in actually cleaning out some of these bad assets out of these banks."
The new plan replaces the Troubled Asset Relief Program, known as TARP, and the president echoed his Treasury chief's promise of transparency and accountability.
"What we've tried to do is to apply some of the tough love that's going to be necessary, but do it in a way that's also recognizing we've got big private capital markets and, and ultimately that's going to be the key to getting credit flowing again."
Obama also said that bank executives receiving taxpayer funds should "be constrained in terms of how you give yourself compensation."