The President's Chief of Staff talks about the prospects for financial reform and middle-class anger in an edited version of an Apr. 19 TV interview
Will you get Republican votes for financial reform?
Yes. I think it will be bipartisan because people realize we have a financial system that over the last 20 years has raced ahead of the regulatory system. We have a multi-trillion-dollar section of the financial marketplace without an agency that oversees it. I mean, Warren Buffett...has talked about derivatives as the equivalent of a nuclear bomb in the financial sector. Take a look at how derivatives have exploded in scope, scale, and size. And yet nobody knows what's going on. They happen in the shadows of the financial industry. It is unhealthy to not bring in some standardization and transparency. Even people in the industry believe that should happen.
Does the SEC complaint against Goldman Sachs (GS) make the case for reform easier?
Look, the same forces that were opposed to [reform] are still opposed to it. They are the same forces that have been hiring people to try to prevent the legislation or weaken parts of it—and they're still going to do that.
How would you describe President Obama's philosophy about the role of government?
Well, he is a pragmatist. He has adopted ideas and policies from Republicans and Democrats. He is not wedded to a philosophy or ideology. He sees government mainly for setting rules and then letting the private sector operate within those rules.
How deep is the anger in America?
I think it's deep, [but] there are a lot of factors that go into that, principally economic anxiety. We're in the middle of a severe economic transition.
Can Obama turn around the anger of people who think they haven't been heard?
There are legitimate reasons for the anger out there. The middle class has seen their incomes lost and cost of living go up while those at the top acted with a sense of irresponsibility that led to the economic crisis. Now the hard-working middle class is bailing out [the economy]. Anybody who thinks the anger is just being pumped up, doesn't get it.
You've got to listen to the people.
Yeah. Representative democracy [means those who are angry] have to be heard, too. When you have a leadership role, you have a responsibility...to let disagreements flourish without letting those disagreements touch something on the darker side. Everybody is accountable, including the media.
Are you angry about the media?
No. But sometimes the media doesn't act with the full responsibility that comes with its position. They play a role in exacerbating the sense that America's pulled apart, and it's not as pulled apart as is being reported.
Are Rush Limbaugh and Glenn Beck pulling America apart?
I wouldn't limit it to them, but I think they...do play a role in exacerbating tensions. And that could be also said about some on the left.
Would we be better off today, with lower unemployment, if the Administration had just focused on the economy?
I don't think the recovery would be in a stronger position. [The President said] we can go from every bubble you want to every bust you want, or we can lay a new [economic] foundation.
Is the Democratic Party in trouble in the election coming up?
Yeah, it's got challenges.
With unemployment at 9.5% or 10%, will it lose the Congress?
Unemployment is important. But if people think the economy is getting better, and we make this a choice about what led us into the recession and the set of policy changes we made to help lead us out, I think we have a chance of turning this election around.
Is there any other job in government you'd like to have?
Let me say it this way: I hope Mayor [Richard] Daley seeks reelection. I will work and support him if he seeks reelection. But if he doesn't, one day I would like to run for mayor of Chicago. That's always been an aspiration of mine. What I miss is being in touch with people.
When might we have a Supreme Court nominee?
The President nominated Sonia Sotomayor at the end of May , and the Senate confirmed her the first week in August, so that's kind of your time frame.
Do you expect a confirmation battle in the Senate?
There will be a huge, huge battle.
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