Reflecting on his economic legacy, President Barack Obama disputes the conclusion in “The Big Short” movie that nothing changed on Wall Street after the 2008 economic meltdown, and maintains that his policies have helped stabilize the financial sector.
In a wide-ranging interview with the New York Times published on Thursday, Obama bemoaned his fractious relationship with Wall Street, said finance is absorbing more science and engineering talent than it should, and speculated he might have gone into business if not politics. But he has little patience for criticism from business leaders.
“One of the constants that I’ve had to deal with over the last few years is folks on Wall Street complaining, even as the stock market went from in the 6,000s to 16,000 or 17,000,” he said, referring to the rise in the Dow Jones Industrial Average during his administration. “They’d be constantly complaining about our economic policies. That’s not rooted in anything they’re experiencing; it has to do with ideology and their aggravations about higher taxes.”
In the Dodd-Frank legislation to overhaul the financial system, Obama sees a major shift in how Wall Street is regulated. He takes issue with Hollywood’s version, reflected in the 2015 film “The Big Short,” which suggested that little has changed on Wall Street. The movie was based on the 2010 best-seller of the same name by Michael Lewis.
Obama on Sanders
“There is no doubt that the financial system is substantially more stable,” Obama said, adding, “It is true that we have not dismantled the financial system, and in that sense, Bernie Sanders’s critique is correct.”
Obama’s statement put further distance between himself and the Vermont senator whose bid to succeed him in the Oval Office has attracted large rallies and featured repeated calls to break up America’s biggest banks. Obama said such a drastic change in the financial system could have unintended consequences.
“One of the things that I’ve consistently tried to remind myself during the course of my presidency is that the economy is not an abstraction,” Obama said. “It’s not something that you can just redesign and break up and put back together again without consequences.”
Obama saved his harshest criticism for Republicans running in the 2016 race, calling their economic plans “fantasy.”
“If you look at the platforms, the economic platforms of the current Republican candidates for president, they don’t simply defy logic and any known economic theories. They are fantasy,” Obama said.
“Slashing taxes, particularly for those at the very top, dismantling regulatory regimes that protect our air and our environment, and then projecting that this is going to lead to 5 percent or 7 percent growth, and claiming that they’ll do all this while balancing the budget,” he said. “Nobody would even, with the most rudimentary knowledge of economics, think that any of those things are plausible.”
The president also said the financial industry was a magnet for talented young people who could be working in engineering or science fields.
“I would like folks who are really good at math to be going into engineering and the sciences more than they’re going into trying to build algorithms to beat the market and to work arbitrage,” Obama said.
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