The pivot

THE PIVOT…. Marc Ambinder had an interesting item today noting, among other things, that the White House has to choose between rolling back on its heels or using the controversy surrounding AIG as “an example to catalyze public support for significant regulatory reform.”

It looks like the president has made his choice.

President Barack Obama says he wants Congress to pass legislation giving the government greater regulatory authority over financial institutions like American International Group.

Standing on the White House lawn as he prepared to go to California, Obama again assailed the company for its business practices and the executive bonuses that it has authorized.

Obama said, “The buck stops with me.” And he disclosed that he and members of his economic council have commenced discussions with leading congressional players on legislation that would create another regulatory entity — along the lines of the Federal Deposit Insurance Corporation — to give the government more authority over financial institutions like AIG.

After noting the nation’s disgust, the president added, “I don’t want to quell that anger — people are right to be angry, I’m angry. I want to channel our anger in a constructive way. The most important thing is to stabilize the financial system, get credit flowing again, and make sure we change how these businesses operate so they don’t put us in situation where when things go bad, tax payers fit the bill.”

In describing his vision of “a broader package of regulatory steps,” Obama also said today that outrageous bonuses are part of a “culture” in which “excess greed, excess compensation, excess risk-taking have all made us vulnerable and left us holding the bag.” He concluded, “I hope that Wall Street and the marketplace don’t think that we can return to business as usual. The business models that created a lot of paper wealth but not real wealth in the country and have now resulted in crisis can’t be the model for economic growth going forward.”