TAPPER: Just to follow on Dan’s question on JPMorgan Chase, I guess I’m not really understanding what either the president said yesterday or what he’s saying now. Are you crediting the Wall Street reform bill with the fact that JPMorgan Chase didn’t have to be bailed out? Or are you saying — is there some direct correlation between what happened or what didn’t happen and the law that passed?
CARNEY: Well, again, I can’t get into the details of the specific transactions here because they’re under investigation. What I can say is that Wall Street reform insists — the Wall Street reform bill, among many other components of it, insisted that financial institutions be better capitalized, that they have the resources — you know, greater resources to deal with and handle losses. That was a major component of Wall Street reform.
And what the president was saying yesterday is that if we have a situation where even a well-run bank or one that’s recognized as being well-run can make a bad decision like this that results in significant losses, it’s a — it’s a — it’s a — it’s an excellent illustration of why we need to have the kind of Wall Street reform that the president put into place, so that the taxpayer’s held harmless when financial institutions that maybe are less well-run make bad decisions and incur losses, perhaps even losses that threaten a financial institution’s existence; we can’t have a situation where the taxpayer then has to come in to the rescue again, but that there must be a way for those banks to be unwound, where the — only the bank and its — and its investors are — bear the burden of the bad decision-making and not taxpayers.
So again, I’m not going to — I can’t — because of the fact that the — this particular series of transactions is under investigation — and I can’t make a point-to-point correlation between Wall Street reform and this, but I can say that the — you know, the overall idea here was to ensure that the American taxpayer is insulated from the kind of decision-making that can take place on Wall Street that can result in losses. I mean, it is a nature of this — you know, we can’t prevent bad decisions from being made. What we can do is take steps to ensure that average working-class and middle-class Americans don’t get stuck with the bill for bad decisions that are made.
TAPPER: Does the president favor any further steps that might be taken on Wall Street when it comes to regulation? Are there other measures he thinks –
CARNEY: Well, as you know, their — implementation of Wall Street reform is still under way. There is a rulemaking process that’s still under way, and the president insists that at — as he insisted, for example, that the Volcker rule be part of Wall Street reform, he insists that the Volcker rule be implemented in a way that makes sure it’s very strong. But that process is — or that’s certainly his view. Obviously, there are independent agencies involved in the rulemaking. But he believes firmly that we need to make sure that Wall Street reform is implemented in a way that is true to the intent and spirit of the legislation.
As you know, millions and millions of dollars have been spent since the passage of Wall Street reform to try to subvert the intent and spirit of the law. And a lot of money is being spent to elect to office those who would repeal Wall Street reform.
And the president simply believes — that’s why he fought so hard for it — that that’s not just, you know, bad for Wall Street, because a functioning system that includes rules of the road that everybody follows and includes a transparent system is vital for the success and growth of the financial sector, but it’s bad for the whole economy and it’s bad for the middle class. So he’ll argue strenuously — and I’m sure we’ll have this debate in the months coming forward — that it is in the interest of all Americans, on Main Street and Wall Street, that we have effective rules in place that make sure we can — we do not have a repeat of what we saw in 2007 and 2008.
TAPPER: The president has been making a very strong case against Mitt Romney’s form of capitalism as he practiced it at Bain Capital. Does the president believe that Bain Capital and the private equity measures that were taken there are significantly different from the ones taken by the Blackstone Group?
CARNEY: I will — I — comparative is not the point here. The issue is, first of all, when you’re talking about campaign ads and stuff, would refer you to the campaign. What the president believes is that the — there is absolutely a place for a vibrant and successful financial sector, financial industry that includes private equity.
The point is, what vision would you bring to the job, what policies would you implement based on that vision, and the policy that leads to the creation of massive amounts of debt, to the withdrawal of profits and in the failure of a company or a state or a — you know, a sector is not an approach that he believes — (chuckles) — would be healthy to replicate for the United States.
TAPPER: I get that. It’s just that the campaign has been very critical of some members of the Blackstone Group for, quote, “betting against America,” being, quote, “less than reputable,” and also obviously against Bain Capital. But the president — correct me if I’m wrong — went to a fundraiser last night at the home of the president of the Blackstone Group, Hamilton “Tony” James. And I guess my question is, just as a — as a — as an American, I’m saying that I don’t understand which ones you’re criticizing and which ones you’re not, because it seems like the ones you’re criticizing are the ones that belong to people supporting Mitt Romney or affiliated with Mitt Romney, but the same exact types of organizations — in the case of Blackstone, the same exact organization — if they support President Obama, then they’re totally kosher.
CARNEY: I think the distinction that you’re failing to see, Jake, is one that I’m — the campaign, I’m sure, will be happy to spell out for you in more detail. But the issue is not whether businesses acting lawfully should maximize profits or pursue business appropriately. That — the president thinks that’s fine and is a good thing and is healthy for our financial sector and our broader economy, broadly speaking. The issue is what vision do you bring to the office, what policies would you implement, and are those policies informed by the vision and by your experience.
TAPPER: So it’s just Tony James shouldn’t run for office?
CARNEY: The — and as for — as for — as for — well, any — I mean, I think we have to — anybody who runs for office puts forward his or her ideas about what they would do in office. And I think that anyone who runs for office who says, you know, not only do I want to — as the Republicans in Congress say and others say, not only do we think that the prescription for our economic challenges is to reintroduce all the policies that contributed mightily to the mess that we’re — we got into in 2008, 2007, but to double down on those policies, to not just extend massive unpaid tax cuts principally benefiting the wealthy, but maybe give — oh, well, actually, definitely give the most well-off Americans significantly more tax cuts that are basically unpaid for or how they’re paid for is unspecified, an approach that says, you know, I was for those two wars and the fact that they were unpaid for under the previous administration, and this president is wrong for ending one of those wars and wrong for having a strategy to end the second war – you know, that’s a debate that we’ll have.
But that vision is not the vision that this president believes is the right one for the country going forward. Let me move around a little bit.