Wall Street Corruption, Solyndra, and Fast & Furious: Today’s Q’s for O – 10/6/2011
TAPPER: Thank you, Mr. President. Just to follow up on Jackie’s question, one of the reasons why so many of the people at the Occupy Wall Street protests are so angry is because, as you say, so many people on Wall Street did not follow the rules.
But your administration hasn’t really been very aggressive in prosecuting. In fact, I don’t think any Wall Street executives have gone to jail despite the rampant corruption and malfeasance that did take place. So I was wondering if you’d comment on that.
And then, just as a separate question, as you’re watching the Solyndra and Fast and Furious controversies play out, I’m wondering if it gives you any pause about any of the decision-making going on in your administration, some of the emails the Democrats put out indicating that people at the Office of Management and Budget were concerned about the Department of Energy, some of the emails going on — and with the attorney general saying he didn’t know about the details of Fast and Furious. Are you worried at all about how this is — how your administration is running?
PRESIDENT OBAMA: Well, first, on the issue of — on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehman’s and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless. That’s exactly why we needed to pass Dodd-Frank, to prohibit some of these practices.
You know, the financial sector is very creative, and they are always looking for ways to make money. That’s their job. And if there are loopholes and rules that can be bent and arbitrage to be had, they will take advantage of it.
So you know, without commenting on particular prosecutions — obviously, that’s not my job; that’s the attorney general’s job – you know, I think part of people’s frustrations — part of my frustration was a lot of practices that should not have been allowed weren’t necessarily against the law, but they had a huge destructive impact. And that’s why it was important for us to put in place financial rules that protect the American people from reckless decision-making and irresponsible behavior.
Now, with respect to Solyndra and Fast and Furious, you know, I think — you know, I’ve been very clear that I have — I have complete confidence in Attorney General Holder in how he handles his office. He has been very aggressive in going after gun-running and cash transactions that are going to these transnational drug cartels in Mexico. There’s been a lot of cooperation between the United States and Mexico on this front. He’s indicated that he was not aware of what was happening in Fast and Furious. Certainly I was not, and I think both he and I would have been very unhappy if somebody had suggested that guns were allowed to pass through that could have been prevented by the United States of America.
He’s assigned an inspector general to look into how exactly this happened. And I have complete confidence in him, and I’ve got complete confidence in the process to figure out who, in fact, was responsible for that decision and how it got made. Solyndra — this is a loan guarantee program that predates me, that historically has had support from Democrats and Republicans as well. And the idea is pretty straightforward: If we are going to be able to compete in the 21st century, then we’ve got to dominate cutting-edge technologies, we’ve got to dominate cutting-edge manufacturing. Clean energy is part of that package of technologies of the future that have to be based here in the United States if we’re going to be able to succeed.
Now, the Loan Guarantee Program is designed to meet a particular need in the marketplace, which is — a lot of these small startups, they can get angel investors and they can get several million dollars to get a company going. But it’s very hard for them to then scale up, particularly if these are new cutting-edge technologies. It’s hard for them to find private investors. And part of what’s happening is China and Europe, other countries, are putting enormous subsidies into these companies, and giving them incentives to move offshore. Even if the technology was developed here in the United States, they end up going to China because the Chinese government will say: We’re going to help you get started; we’ll help you scale up; we’ll give you low-interest loans, or no-interest loans; we will give you siting; we will do whatever it takes for you to get started here.
And that’s part of the reason why a lot of technologies that developed here we’ve now lost the lead in: solar energy, wind energy. And so what the Loan Guarantee Program was designed to do was to close that gap and say: Let’s see if we can help some of those folks locate here and create jobs here in the United States.
Now, we knew from the start that the loan guarantee program was going to entail some risk, by definition. If it was a risk-free proposition, then we wouldn’t have to worry about it.
But the overall portfolio has been successful. It has allowed us to help companies, for example, start advanced battery manufacturing here in the United States. It’s helped to create jobs. They were going to be some companies that did not work out. Solyndra was one of them.
But the process by which the decision was made was on the merits. It was straightforward. And of course there were going to be debates internally, you know, when you’re dealing with something as complicated as this. But I have confidence that the decisions were made based on what would be good for the American economy and the American people and putting people back to work.
And by the way, let me make one last point about this. You know, I heard there was a Republican member of Congress who’s engaging in oversight on this. And despite the fact that all of them in the past have been supportive of this loan guarantee program, he concluded, you know what, we can’t compete against China when it comes to solar energy.
Well, you know what? I don’t buy that. I’m not going to surrender to other countries’ technological leads that could end up determining whether or not we’re building a strong middle class in this country. And so, you know, we’re going to have to keep on pushing hard to make sure that manufacturing’s located here, new businesses are located here and new technologies are developed here. And there are going to be times where it doesn’t work out. But I’m not going to cave to the competition when they are heavily subsidizing all these industries.
TAPPER: Are you satisfied with how aggressive your administration has been when it comes to prosecuting this? I know a lot of it was legal, but a lot of it was not -
PRESIDENT OBAMA: Right, and — well, let me say this. The president can’t go around saying prosecute somebody. But as a general principle, if somebody is engaged in fraudulent actions, they need to be prosecuted. If they’ve violated laws on the books, they need to be prosecuted. And that’s the attorney general’s job. And I know that Attorney General Holder, U.S. attorneys all across the country — they take that job very seriously.