President Obama took some questions from the press corps at the conclusion of the G-20 summit in London.
PRESIDENT OBAMA: Okay. Got to go back to — to my crew. Jake Tapper.
TAPPER: Thank you, Mr. President. Two questions. One, can you say with confidence that the steps the G-20 nations are taking today, committing to today, will help the world — or will prevent — the world to avoid a depression or a deeper recession?
And two, your friend and ally, Prime Minister Brown said that "the old Washington consensus is over; today we have reached a new consensus." Is he right? And what do you think he meant by that?
PRESIDENT OBAMA: In life, there are no guarantees, and in economics, there are no guarantees. The people who thought they could provide guarantees — many of them worked at AIG, and it didn’t work out so well. So — so there are always risks involved.
I have no doubt, though, that the steps that have been taken are critical to preventing us sliding into a depression. They are bolder and more rapid than any international response that we’ve seen to a financial crisis in memory. And I think that they will have a — a concrete effect in our ability, individually, in each nation, to create jobs, save jobs that exist, grow the economy, loosen up credit, restore trust and confidence in the financial markets.
So these steps — another way of putting it is I think the steps in the communique were necessary. Whether they’re sufficient, we’ve got to — we’ve got to wait and see. I’m actually confident, though, that given the common commitment in the United States and in the other G-20 countries to act rapidly and boldly, that if we see other inklings of panic in the marketplace or things unwinding, that this group once again will respond as needed.
So I guess, maybe, just to use an analogy that was used several times in this meeting — an analogy that I’ve used in the past — you’ve got a sick patient. I think we applied the right medicine. I think the patient is stabilized. There are still wounds that have to heal. And, you know, there are still — you know, there’s still emergencies that could arise. But I think that you’ve got some pretty good care being applied.
You had a second follow-up question?
TAPPER: The comments by Prime Minister Brown –
PRESIDENT OBAMA: Oh, the Washington consensus. Well, the Washington consensus, as I’m sure you’re aware, Jake, is sort of a term of art about a certain set of policies surrounding globalization and the application of a cookie-cutter model to economic growth, trade liberalization, deregulation that, you know, was popular and did help globalize and grow the economy and was led by some of our leading economists and policymakers in Washington.
I think that there’s always been a spectrum of opinion about how — how unfettered the free market is. And along that spectrum, I think there have been some who believe in very fierce regulation and are very suspicious of globalization and there are others who think that it’s always — that the market is always king.
And I think what we’ve learned here — but if anybody had been studying history, they — they would have understood earlier — is that the market is the most effective mechanism for creating wealth and distributing resources to produce goods and services that history has ever known, but that it goes off the rails sometimes, that if it’s completely unregulated, that if — if there are no thoughtful frameworks to channel the creative energy of — of the market, that it can end up in a very bad place.
And in — so in that sense, I think that we just went through a couple of decades where there was an artificial complacency about the dangers of markets going off the rails and — and to — the crisis — a crisis like this reminds us that we just have to put in some commonsense rules of the road without throwing out the enormous benefits that globalization has brought, in terms of improving living standards, reducing the cost of goods and bringing the world closer together.
NOTE: Jonathan Weisman of the Wall Street Journal also tried to get the president to directly comment on Prime Minister Brown’s remark that the era of "Washington consensus" was over. He had a touch more success; I will post that in a bit.