Obama On Economic Crisis, Transition
Since Barack Obama was elected the 44th president of the United States 12 days ago, he has largely remained out of sight, getting high-level government briefings and conferring with his transition team. But he surfaced on Friday afternoon in Chicago, alongside his wife Michelle to give 60 Minutes his first post-election interview.
It covers a wide range of subjects including the economy, the ailing automobile industry, the government's $700 billion bailout program, their visit to the White House, the emotions of election night and the quest for a family dog. You'll hear all of it. But we begin with the president-elect and his thoughts about the new job.
Steve Kroft: So here we are.
President-elect Barack Obama: Here we are.
Kroft: How's your life changed in the last ten days?
Mr. Obama: Well, I tell you what, there seem to be more people hovering around me. That's for sure. And, on the other hand, I'm sleeping in my own bed over the last ten days, which is quite a treat. Michelle always wakes up earlier than I do. So listen to her roaming around and having the girls come in and, you know, jump in your bed. It's a great feeling. Yeah.
Kroft: Has this been easier than the campaign trail?
Mr. Obama: Well, it's different. I think that during the campaign it is just a constant frenetic, forward momentum. Here, I'm stationary. But the issues come to you. And we've got a lot of work to do. We've got a lot of problems, a lot of big challenges.
Kroft: Have there been moments when you've said, 'What did I get myself into?'
Mr. Obama: Surprisingly enough, I feel right now that I'm doing what I should be doing. That gives me a certain sense of calm. I will say that the challenges that we're confronting are enormous. And they're multiple. And so there are times during the course of a given a day where you think, 'Where do I start?'
Kroft: What have you been concentrating on this week?
Mr. Obama: Couple of things. Number one, I think it's important to get a national security team in place because transition periods are potentially times of vulnerability to a terrorist attack. We wanna make sure that there is as seamless a transition on national security as possible. Obviously the economy. Talking to top economic advisors about how we're gonna create jobs, how we get the economy back on track and what do we do in terms of some long-term issues like energy and healthcare. And how do we sequence those things in a way that we can actually get things through Congress?
=4607908> The Obamas On Their Personal Transition
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Kroft: Are you in sync with Secretary Paulson in terms of how the $700 billion is being used?
Mr. Obama: Well, look, Hank Paulson has worked tirelessly under some very difficult circumstances. We've got an unprecedented crisis, or at least something that we have not seen since the Great Depression. And I think Hank would be the first one to acknowledge that probably not everything that's been done has worked the way he had hoped it would work. But I'm less interested in looking backwards than I am in looking forwards.
Kroft: The government has spent almost $300 billion out of the TARP program.
Mr. Obama: Right.
Kroft: Money that was set aside to help the financial industry. And nothing much has changed if you look at it. Nothing much has changed. It's $300 billion. Why is that?
Mr. Obama: I think the part of the way to think about it is things could be worse. I mean, we could have seen a lot more bank failures over the last several months. We could have seen an even more rapid deterioration of the economy, even a bigger drop in the stock market. So part of what we have to measure against is what didn't happen and not just what has happened.
Having said that, there's no doubt that we have not been able yet to reset the confidence in the financial markets and in the consumer markets and among businesses that allow the economy to move forward in a strong way. And my job as president is gonna be to make sure that we restore that confidence.
Mr. Obama: Well, you know I think we still have to see how this thing unfolds over the next couple of months. One area that I'm concerned about, and I've said this publicly, is we have not focused on foreclosures and what's happening to homeowners as much as I would like. We have the tools to do it. We've gotta set up a negotiation between banks and borrowers so that people can stay in their homes. That is gonna have an impact on the economy as a whole. And, you know, one thing I'm determined is that if we don't have a clear focused program for homeowners by the time I take office, we will after I take office.
Kroft: Are you being consulted by Secretary Paulson?
Is he telling you what's going on?
Mr. Obama: You know what we've done is we've assigned somebody on my transition team who interacts with him on a daily basis. And, you know, we are getting the information that's required to and we're making suggestions in some circumstances about how we think they might approach some of these problems.
Kroft: Are they listening?
Mr. Obama: Well, you know, that we'll find out.
Kroft: People are comparing this to 1932.
Mr. Obama: Right.
Kroft:Is that a valid comparison, do you think?
Mr. Obama: Well, keep in mind that 1932, 1933 the unemployment rate was 25 percent, inching up to 30 percent. You had a third of the country that was ill housed, ill clothed, unemployed. We're not going through something comparable to that. But I would say that this is as bad as we've seen since then. And if we don't take some significant steps then it could get worse.
Kroft: You have a situation right now where you have General Motors, which is in dire straits.
Mr. Obama: Yeah.
Kroft: May run out of cash by the end of the year, maybe by the end of certainly, if we believe what we read in the papers, by the time you take office.
Mr. Obama: Yeah. Well, let's see how this thing plays itself out. For the auto industry to completely collapse would be a disaster in this kind of environment, not just for individual families but the repercussions across the economy would be dire. So it's my belief that we need to provide assistance to the auto industry. But I think that it can't be a blank check.
So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all the stakeholders coming together with a plan what does a sustainable U.S. auto industry look like? So that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere. And that's, I think, what you haven't yet seen. That's something that I think we're gonna have to come up with.
Kroft: Are there a lot of people that think that the country would probably be better off and General Motors might be better off if it was allowed to go into bankruptcy?
Mr. Obama: Well, you know, under normal circumstances that might be the case in the sense that you'd go to a restructuring like the airlines had to do in some cases. And then they come out and they're still a viable operation. And they're operating even during the course of bankruptcy. In this situation, you could see the spigot completely shut off so that it would not potentially permit GM to get back on its feet. And I think that what we have to do is to recognize that these are extraordinary circumstances. Banks aren't lending as it is. They're not even lending to businesses that are doing well, much less businesses that are doing poorly. And in that circumstance, the usual options may not be available.
Mr. Obama: Right.
Kroft: Does doing something about energy is it less important now than...
<Mr. Obama: It's more important. It may be a little harder politically, but it's more important.
Kroft: Why?
Mr. Obama: Well, because this has been our pattern. We go from shock to trance. You know, oil prices go up, gas prices at the pump go up, everybody goes into a flurry of activity. And then the prices go back down and suddenly we act like it's not important, and we start, you know filling up our SUVs again.
And, as a consequence, we never make any progress. It's part of the addiction, all right. That has to be broken. Now is the time to break it.
Kroft: Where is all the money going to come from to do all of these things? And is there a point where just going to the Treasury Department and printing more of it ceases to be an option?
Mr. Obama: Well, look, I think what's interesting about the time that we're in right now is that you actually have a consensus among conservative Republican-leaning economists and liberal left-leaning economists. And the consensus is this: that we have to do whatever it takes to get this economy moving again, that we're gonna have to spend money now to stimulate the economy.
And that we shouldn't worry about the deficit next year or even the year after. That short term, the most important thing is that we avoid a deepening recession.
Kroft: How high a priority are you placing on re-regulation of the financial markets?
Mr. Obama: I think it's a top priority. I think that we have to restore a sense of trust, transparency, openness in our financial system. And keep in mind that the deregulation process, it wasn't just one party. I think there's a lot of blame to spread around.
But, hopefully, everybody's learned their lesson. And the answer is not heavy-handed regulations that crush the entrepreneurial spirit and risk taking of American capitalism. That's what's made our economy great. But it is to restore a sense of balance.
His first legislative goal will be to get Congress to pass an economic stimulus package that he hopes will create jobs and put money in the pockets of ordinary citizens, construction programs to shore up the nation's creaky infrastructure, a tax cut for the middle class and his first initiatives on health care. But some things he can do with the stroke of a pen.
Kroft: There are a number of different things that you could do early pertaining to executive orders. One of them is to shutdown Guantanamo Bay. Another is to change interrogation methods that are used by U.S. troops. Are those things that you plan to take early action on?
Mr. Obama: Yes. I have said repeatedly that I intend to close Guantanamo, and I will follow through on that. I have said repeatedly that America doesn't torture. And I'm gonna make sure that we don't torture. Those are part and parcel of an effort to regain America's moral stature in the world.
Mr. Obama: Well, I've said during the campaign, and I've stuck to this commitment, that as soon as I take office, I will call in the Joint Chiefs of Staff, my national security apparatus, and we will start executing a plan that draws down our troops. Particularly in light of the problems that we're having in Afghanistan, which has continued to worsen. We've got to shore up those efforts.
Kroft: Where does capturing or killing Osama bin Laden fall?
Mr. Obama: I think it is a top priority for us to stamp out al Qaeda once and for all. And I think capturing or killing bin Laden is a critical aspect of stamping out al Qaeda. He is not just a symbol, he's also the operational leader of an organization that is planning attacks against US targets.
Kroft: How close are you to settling on a cabinet?
Mr. Obama: Well, I think that I've got a pretty good idea of what I'd like to see. But it takes some time to work those things through.
Kroft: When are you gonna make your first announcement?
Mr. Obama: Soon.
Kroft: Next week?
Mr. Obama: Soon.
Kroft: You met with Senator Clinton this week.
Mr. Obama: I did.
Kroft: Is she on the short list for a cabinet position?
Mr. Obama: You know, she is somebody who I needed advice and counsel from. She is one of the most thoughtful public officials that we have. Beyond that, you're not getting anything out of me Steve.
Kroft: Will there be Republicans in the cabinet?
Mr. Obama: Yes.
Kroft: More than one?
Mr. Obama: You're not getting more out of me.
Kroft: You've spoken to some former presidents.
Mr. Obama: I have.
Kroft: Any advice, any good advice they gave you?
Mr. Obama: You know, they were all incredibly gracious. But I think that all of them recognized that there's a certain loneliness to the job. That, you know, you'll get advice, and you'll get counsel. Ultimately, you're the person who's gonna be making decisions.
And I think that even now, you know, I - you can already feel that fact.
Kroft: What are you reading right now? I mean, have...
Mr. Obama: A lot of briefing papers.
Kroft: A lot of briefing papers?
Mr. Obama: Yeah. I've been spending a lot of time reading Lincoln. There is a wisdom there and a humility about his approach to government, even before he was president, that I just find very helpful.
Kroft: Put a lot of his political enemies in his cabinet.
Mr. Obama: He did.
Kroft: Is that something you're considering?
Mr. Obama: Well, I tell you what, I find him a very wise man.
Mr. Obama: You know, I have actually. There's a new book out about FDR's first 100 days and what you see in FDR that I hope my team can-- emulate, is not always getting it right, but projecting a sense of confidence, and a willingness to try things. And experiment in order to get people working again.
And I think that's what the American people expect. You know, they're not expecting miracles. I think if you talk to the average person right now that they would say, 'Well, look, you know well, we're having a tough time right now. We've had tough times before.' 'And you know, we don't expect a new president can snap his fingers and suddenly everything is gonna be okay. But what we do expect is that the guy is gonna be straight with us. We do expect that he's gonna be working really hard for us.'
'We do expect that he's gonna be thinking about ordinary Americans and not just the wealthy and the powerful. And we do expect that. if something doesn't work that they're gonna try something else until they find something that does.' And, you know, that's the kind of common sense approach that I want to take when I take office.
Kroft: There's been talk on Capitol Hill and a number of Democratic congressmen have proposed programs that are part of sort of a new New Deal. The possibility of reviving agencies like the Home Ownership Loan Corporation.
Mr. Obama: Two points I'd make on this. Number one, although there are some parallels to the problems that we're seeing now and what we say back in the '30s, no period is exactly the same. For us to simply recreate what existed back in the '30s in the 21st century, I think would be missing the boat. We've gotta come up with solutions that are true to our times and true to this moment. And that's gonna be our job. I think the basic principle that government has a role to play in kick starting an economy that has ground to a halt is sound.
I think our basic principle that this is a free market system and that that has worked for us, that it creates innovation and risk taking, I think that's a principle that we've gotta hold to as well. But what I don't wanna do is get bottled up in a lot of ideology and is this conservative or liberal. My interest is finding something that works.
And whether it's coming from FDR or it's coming from Ronald Reagan, if the idea is right for the times then we're gonna apply it. And things that don't work we're gonna get rid of.
Kroft: Are you gonna make a lot of speeches? Are you gonna talk a lot to the American people on television and radio?
Mr. Obama: You know, I'm not sure that the American people are looking for a lot of speeches. I think what they're looking for is action. But one of the things that I do think is important is to be able to explain to the American people what you're doing, and why you're doing it. That is something that I think every great president has been able to do. From FDR to Lincoln to John Kennedy to Eisenhower. I mean, I think that they were people who were able to say 'Here's the direction we're going. Here's why I think it's important. Here are the possible dangers or challenges. But ultimately, you know, this is gonna lead us to a better America.' And I want to make sure that I can recreate a bond of trust between the presidency and the public that I think has been lost.
The President-elect and Mrs. Obama have already been on a tour of their new home. In the
Produced by L. Franklin Devine, Michael Radutzky and Andy Court