President Barack Obama walks across the South Lawn after arriving on Marine One at the White House in Washington, D.C., March 29, 2016.
Photo by Saul Loeb/AFP/Getty

Obama: Sanders’ critique is ‘correct’ that big banks have not been dismantled

Updated

Pres. Barack Obama said in an interview about his economic policies with the New York Times Magazine that Sanders’ critique about big banks is “correct,” in so far as that they have not yet been broken up.

“But there is no doubt that the financial system is substantially more stable,” Obama told the Times. “It is true that we have not dismantled the financial system, and in that sense, Bernie Sanders’s critique is correct.”

However, Obama said that the proposal to expand on the Dodd-Frank Wall Street Reform and Consumer Protection Act by dismantling big banks such as JP Morgan Chase, Citi Bank or Bank of America is not as simple of a solution as it appears. Obama signed Dodd-Frank into law in 2010, which sought to monitor and prevent risks that could impact the entire finance industry. The law also created the Consumer Financial Protection Bureau to ease the the shutdown of banks without using bailouts at the cost of taxpayers.

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“But 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. It’s not something that you can just redesign and break up and put back together again without consequences,” he added. 

One policy on which Obama and Sanders diverge more substantially is healthcare. Sanders has proposed to supplant Obama’s Affordable Care Act with a single payer system. His Democratic opponent, front-runner Hillary Clinton, has used this split with the president against Sanders during debates, causing Sanders to defend himself by saying he does not want to dismantle the ACA.

Obama also took an implied jab at Republican front-runner Donald Trump’s immigration policies, such as his plan to build a wall on the US-Mexico border, during his Times interview, by critiquing the effects of false nostalgia and polarizing politics on attempts at economic reform.

“In some ways,” he said, “engaging in those hard changes that we need to make to create a more nimble, dynamic economy doesn’t yield immediate benefits and can seem like a distraction or an effort to undermine a bygone era that doesn’t exist. And that then feeds, both on the left and the right, a temptation to say, ‘If we could just go back to an era in which our borders were closed,’ or ‘If we could just go back to a time when everybody had a defined-benefit plan,’ or ‘We could just go back to a time when there wasn’t any immigrant that was taking my job, things would be OK.’ ”

Here are four other insights and takeaways from Obama’s interview with the Times:

Obama thinks we’re doing pretty good after the 2008 financial crisis, comparatively speaking.

“I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform,” Obama said. “By that measure, we probably managed this better than any large economy on Earth in modern history.”

Obama does have regrets.

Obama admits he could have done a few more “common-sense things” to improve the economy more, something he said occasionally haunts his conscience. “We could have brought down the unemployment rate lower, faster. We could have been lifting wages even faster than we did. And those things keep me up at night sometimes,” he said.

Meanwhile, Congress may have looked more blue after the mid-term election, Obama suggests, if he had done more to promote and show the economic accomplishments during his first term. “I mean, the truth of the matter is that if we had been able to more effectively communicate all the steps we had taken to the swing voter,” he said, “then we might have maintained a majority in the House or the Senate.”

Barack Obama, CEO?

Obama said he might have been interested in the business sector had his career taken another trajectory. “If I hadn’t gone into politics and public service, the challenges of creating a business and growing a business and making it work would probably be the thing that was most interesting to me,” he said.

The president considers the economic policy plans proposed by the Republican 2016 candidates ”fantasy.”

The economic proposals from Cruz, Kasich, and Trump, which vary in precise delineation, “defy logic,” 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. Nobody would even, with the most rudimentary knowledge of economics, think that any of those things are plausible,” Obama said.

This story has been updated to clarify the point on which Obama and Sanders agree — it is that the large financial institutions have not been broken up.

Barack Obama, Bernie Sanders, Dodd-Frank Act and Donald Trump

Obama: Sanders' critique is 'correct' that big banks have not been dismantled

Updated