Obama defends Geithner, criticizes AIG and Wall Street

"People are right to be angry" over bonuses the company paid recently, the president said, adding that he's angry as well.

Published March 18, 2009 5:40PM (EDT)

President Obama took to the White House lawn on Wednesday in what Greg Sargent is billing, probably correctly, as "a major bid to take control of [the AIG bonuses] story." In wide-ranging remarks to reporters about the controversy, Obama spoke of his anger about the situation, laid the blame on himself, defended his treasury secretary and discussed a larger issue at play, saying, "I hope that Wall Street and the marketplace don't think that we can return to business as usual."

While he did say that "people are right to be angry" over the $165 million in bonuses AIG paid out recently, and added that he shares that anger, Obama sought in part to shift the conversation to the bigger picture.

"People are rightly outraged about these particular bonuses, but just as outrageous is the culture that these bonuses are a symptom of ... excess greed, excess compensation, excess risk taking have all made us vulnerable and left us holding the bag," the president said. "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 ... The financial regulatory package that we're designing as well as the economic policies that we want to put in place are going to put an end to that culture."

Obama deflected a question about whether he believes his administration can recoup the bonus money, focusing instead on setting up a system so this kind of situation -- in which the government is left with few viable options -- doesn't occur again. And, without naming names, he lashed out at Republican opponents who've been criticizing him over bonuses, saying, "I think it's very important to remind ourselves that there are a whole bunch of folks now who are feigning outrage about these bonuses that a year ago or two years ago or three years ago said, 'Well, we should never meddle in these compensation plans.'"

Perhaps most important, though, the president spoke out in defense of his treasury secretary, Tim Geithner. One member of Congress, Rep. Connie Mack, R-Fla., said Wednesday that Geithner should resign or be fired. But Obama stuck by him.

"There has never been a secretary of the treasury, except maybe Alexander Hamilton, right after the Revolutionary War, who's had to deal with the multiplicity of issues that Secretary Geithner is having to deal with all at the same time," Obama said. "And, you know, he is doing so with intelligence and diligence. Nobody's working harder than this guy. He is making all the right moves in terms of playing a bad hand. And what we need to be doing is making sure that we are providing him the support that he needs."

By Alex Koppelman

Alex Koppelman is a staff writer for Salon.

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