Obama Says U.S. Can’t Afford ‘Bubble-and-Bust’ CyclesSubmitted by alwayssimon on Thu, 03/12/2009 - 20:00
March 12 (Bloomberg) -- President Barack Obama warned a group of chief executive officers that the U.S. can’t continue with “endless cycles of bubble and bust” and must build a new foundation for future economic growth.
The financial markets crisis is only part of the challenge to the U.S. economy, Obama told the Washington-based Business Roundtable today.
The current turmoil can’t be used “as an excuse to keep ignoring the long-term threats to our prosperity” from the rising costs of health care and energy and a faltering education system, Obama said to the group, which is made up of CEOs from U.S. companies including Citigroup Inc., Exxon Mobil Corp. and General Motors Corp.
Obama is campaigning to maintain public support for his economic strategy, which includes new government spending as part of a $787 billion stimulus plan and stabilizing the banking industry and housing, as well as tackling the health-care system, energy and education. He also is defending his plans against critics among congressional Republicans and some Democrats.
‘Fundamental’ to Growth
“I’m not choosing to address these additional challenges just because I feel like it, or because I’m a glutton for punishment,” Obama told the business leaders. “I’m doing so because they are fundamental to our economic growth and to ensuring that we don’t have more crises like this in the future.”
The industries represented at the meeting ranged from financial services to pharmaceuticals to oil companies and automakers. Among the executives in attendance were Anne Mulcahy, CEO of Xerox Corp., Sam Palmisano, CEO of International Business Machines Corp., and Ivan Seidenberg, CEO of Verizon Communications Inc.
The U.S. has lost 4.4 million jobs since the recession began in December 2007, according to Labor Department figures, and the unemployment rate jumped to 8.1 percent in February, the highest level in more than a quarter century. Meanwhile, household wealth in the U.S. fell by a record $5.1 trillion in the last quarter of 2008 as home values and stock prices plunged, according to the Federal Reserve.
Obama blamed the crisis on “reckless speculation and spending beyond our means; on bad credit and inflated home prices and overleveraged banks.”
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