President Obama said Wednesday that no one in his administration had been responsible for supervising ailing insurance giant AIG but that ultimately, the buck stops with him.
“Nobody here drafted those contracts; nobody here was responsible for supervising AIG and allowing themselves to put the economy at risk by some of the outrageous behavior that they were engaged in,” he said outside the White House. “[But] we are responsible, though. The buck stops with me.” Obama, in a defiant tone, once again lashed out at the controversial bonuses given to executives at AIG, which received $173 billion in government bailouts over the past six months. “People are right to be angry. I am angry. … People are rightly outraged about these particular bonuses,” he said. “But just as outrageous is the culture that these bonuses are a symptom of that have existed for far too long, a situation where excess greed, excess compensation, excess risk-taking have all made us vulnerable and left us holding the bag.” Watch Obama blast AIG bonuses » Obama said he held discussions with his economic team and with Rep. Barney Frank, D-Massachusetts, chairman of the House Financial Services Committee. Frank presided over hearings Wednesday on the AIG bonus controversy. On Wednesday afternoon, AIG chief executive Edward Liddy told Congress that he has asked employees of the bailed-out insurer who took home more than $100,000 in bonuses to return at least half. Watch the AIG CEO ask executives to pay back some of the bonuses » Liddy, saying he knew that the public’s patience is “wearing thin,” said some employees have decided on their own to return their entire bonuses to the company.
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But shortly before Liddy testified, Obama delivered a harsh message to companies like AIG and, in general, Wall Street: Don’t plan on returning to business as usual. “The business models that created a lot of paper wealth but not real wealth in the country and have now resulted in crisis can’t be the model for economic growth going forward,” he said. But the president said that rather than continuing to argue about AIG, anger must be channeled in a constructive way. “We’re trying to do is get ourselves in a position where we make sure that, going forward, we’re not held hostage to all these bad decisions that were made by these huge institutions in the past and that we create a system where they can’t make all these bad bets,” he said. Watch Obama talk about moving forward to clean up the AIG mess » “And I am confident that we can strike the right balance that allows our financial system to stabilize, allows people to innovate in the financial markets, but don’t allow them to put everybody else’s savings, everybody else’s well-being, other people’s jobs, other people’s homes at risk.”
Obama also defended his criticized Treasury secretary, Tim Geithner, saying he “is making all the right moves in terms of playing a bad hand.” “There has never been a secretary of the Treasury, except maybe Alexander Hamilton, right after the Revolutionary War, who has had to deal with the multiplicity of issues that Secretary Geithner’s having to deal with,” he said.
