As turmoil on Wall Street comes to dominate the presidential campaign, Barack Obama has issued a statement that neither criticizes nor explicitly endorses the Federal Reserve's decision to bail out AIG.
"Sen. Obama is not going to be second-guessing the Federal Reserve at a time like this," Jason Furman, a senior economic adviser to the Illinois Democrat, told Renee Montagne.
"Our economic problems are very serious. Eight years of shredding regulations that protect consumers, lax oversight of banks, being behind the curve in dealing with this have put us in this position," Furman said. "What's important is what we do now."
Obama was aware of the nation's economic problems before they reached a crisis point, Furman said.
"He sent a letter to Bernanke and Paulson in March 2007, warning about the mounting foreclosure crisis and the consequences it would have for our economy," Furman said.
By suggesting a summit to deal with that issue and proposing new regulations, Furman said, Obama has urged changes in how the nation approaches the credit slump.
In addition to keeping a watchful eye on large and powerful institutions, "you also just need to enforce the rules on the books," Furman said. "Some of these tools were already there, and you've seen regulators in recent years look the other way."
Part of the problem, Furman said, is that the Securities and Exchange Commission lost some power during the Bush administration. Noting the need to end bailouts, Furman said, "We need to, for example, prop up our economy as a whole with a fiscal stimulus. We need far more ambitious measures to deal with the root of this problem, which is in the housing sector."
But the end goal of any plan, Furman said, is to protect American taxpayers.
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