Won't the government need far more than the $350 billion that's remaining in the financial rescue funds to really solve the credit crisis?
OBAMA: Well, the credit crisis is real, and it's not over. We averted catastrophe by passing the TARP legislation. But, as I said before, because of a lack of clarity and consistency in how it was applied, a lack of oversight in — in how the money went out, we didn't get as big of a bang for the buck as we should have.
My immediate task is making sure that the second half of that money, $350 billion, is spent properly. That's my first job. Before I even think about what else I've got to do, my first task is to make sure that my secretary of the treasury, Tim Geithner, working with Larry Summers, my national economic adviser, and others are coming up with the best possible plan to use this money wisely in a way that's transparent, in a way that provides clear oversight, that we are conditioning any money that we give to banks on them reducing executive compensation to reasonable levels and to make sure that they're not wasting that money.
We are going to have to work with the banks in an effective way to clean up their balance sheets so that some trust is restored within the marketplace, because right now part of the problem is that nobody really knows what's on the bank's books. Any given bank, they're not sure what kinds of losses are there. We've got to open things up and restore some trust.
We also have to deal with the housing issue in a clear and consistent way.
I don't want to pre-empt my secretary of the treasury. He's going to be laying out these principles in great detail tomorrow.
OBAMA: But my instruction to him has been: Let's get this right. Let's create a template in which we're restoring market confidence.
And the reason that's so important is because we don't know yet whether we're going to need additional money or how much additional money we'll need until we've seen how successful we are at restoring a sense of confidence in the marketplace that the federal government and the Federal Reserve Bank and the FDIC, working in concert, know what they're doing.
That can make a big difference in terms of whether or not we attract private capital back into the marketplace. And ultimately the government cannot substitute for all the private capital that has been withdrawn from the system. We've got to restore confidence so that private capital goes back in.
QUESTION: Thank you, Mr. President. My question follows Julianna's in — in content. The American people have seen hundreds of billions of dollars spent already, and still the economy continues to freefall.
Beyond avoiding the national catastrophe that you've warned about, once all the legs of your stool are in place...
QUESTION: ... how can the American people gauge whether or not your programs are working? Can they — should they be looking at the metric of the stock market, home foreclosures, unemployment? What metric should they use when and how will they know if it's working or whether or not we need to go to a Plan B?
OBAMA: I think my initial measure of success is creating or saving 4 million jobs. That's bottom line number one, because, if people are working, then they've got enough confidence to make purchases, to make investments. Businesses start seeing that consumers are out there with a little more confidence, and they start making investments, which means they start hiring workers. So step number one: job creation.
Step number two: Are we seeing the credit markets operate effectively? You know, I can't tell you how many businesses that I talk to that are successful businesses but just can't get credit.
Part of the problem in Elkhart that I heard about today was the fact that — this is the R.V. capital of America. You've got a bunch of R.V. companies that have customers who want to purchase R.V.s, but even though their credit is good, they can't get the loan.
Now, the businesses also can't get loans to make payments to their suppliers. But when they have consumers, consumers can't get the loans that they need. So normalizing the credit markets is, I think, step number two.