Sweden, on the other hand, had a problem like this. They took over the banks, nationalized them, got rid of the bad assets, resold the banks and, a couple years later, they were going again. So you'd think looking at it, Sweden looks like a good model. Here's the problem; Sweden had like five banks. [LAUGHS] We've got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense. And we also have different traditions in this country.
Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different. And we want to retain a strong sense of that private capital fulfilling the core -- core investment needs of this country.
And so, 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 ultimately that's going to be the key to getting credit flowing again.
MORAN: People are angry, there's so much taxpayer money going into the banks. Why shouldn't the government, why shouldn't you just fire the executives who wrecked these banks in the first place and tanked the world's financial system in the process?
OBAMA: Well, some of them are gone because their institutions have effectively collapsed. You know, keep in mind. though, there are a lot of banks that are actually pretty well managed; JP Morgan being a good example. Jamie Dimon, the CEO there; I don't think he should be punished for doing a pretty good job managing an enormous portfolio.
And so what we want to do is to say, if you're going to take money from the taxpayers, then you're going to be constrained in terms of how you give yourself compensation and shareholders are going to be empowered.
If you're not taking money, then we'll let shareholders and boards of directors handle things as they generally have handled them. I do hope that we're going to see a change in culture where everybody in the financial system starts recognizing that ... $100 million bonuses annually are not a birthright [LAUGHS] and that, you know, we've got to recognize that if you're going to reward people for success, you've also got to punish them for failure and that hasn't been happening.
MORAN: Take a step back, you've been sounding some very dire warnings about the economy in recent days. How close do you think the country is to a kind of economic catastrophe that you're warning them?
OBAMA: Well, you know, I'm constantly trying to thread the needle between sounding alarmist but also letting the American people know the circumstances that we're in. And the fact of the matter 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.
And so this was a big difficult situation. Now, I think we've got to keep perspective. We're not going through the Great Depression. I know there have been some analogies there but when FDR took over, unemployment at that time was 30 percent, as opposed to 7.5 or 7.6.