At G-20 summit, Obama to focus on reforms to aid US workers

By DAVE MURRAY

TOLEDO BLADE

WASHINGTON — The economic crisis that hit industrial states like Ohio has been building for years and will take many years to reverse, President Barack Obama told The Blade in a White House interview.

The sobering assessment of the condition of industrial America came as Obama prepares to host the G-20 summit of world finance and political leaders in Pittsburgh this week.

“If you think about what’s happening in Ohio and the manufacturing base that employed so many people, the decline in that sector of the economy took decades. It didn’t start last year, it’s been going on for two decades,” the president said. “And reversing that and rebuilding it is going to take two decades as well.”

But Obama was also hopeful.

“We’re now seeing Toledo start cornering a market on solar panels and high-tech glass,” he said.

Obama sat down with editors of The Blade and its sister paper, the Pittsburgh Post-Gazette, on Friday for a 25-minute Oval Office interview in advance of the G-20, a group established to bring industrialized and developing countries together to discuss global economic issues.

The G-20 meeting in Pittsburgh will be the group’s second gathering this year; it had a summit in London in April. The President is scheduled to be in Pittsburgh Thursday and Friday to meet with heads of state and finance ministers from 18 other nations and the European Union.

They will focus on recovery from the global recession, with Obama confirming that the main topic at this week’s summit will be financial regulatory reform following the near collapse last year of the banking system in the United States and around the world.

“How do we make sure that banks are not making money by taking wild risks, expecting taxpayer bailouts if their risks don’t pay off, but instead are acting prudentially?” he said.

“That they’ve got strong capital requirements; that we are regulating the derivatives market; that we make sure that if these big financial institutions make bad decisions, that there’s a way of resolving their problems without potentially bringing down the entire financial system or forcing taxpayers to foot the bill.”

The president said he is also concerned about “making sure that the compensation structures for these big institutions are not geared toward short-term profits but are geared toward long-term sustainability.”

“I think ultimately [that] will be good not just for workers in America but people all around the world. What we want to create is a race to the top where, because of a strong regulatory framework, the free market can still operate effectively, and there’s still innovation and dynamism and creativity — all of the things that have made America great — but that it’s happening with some rules of the road so that things don’t spin out of control.”

U.S. Rep. Marcy Kaptur, D-Toledo, one of the sharpest critics in Congress of the negative impact global trade has had on the country’s manufacturing base, said she agrees in part with Mr. Obama.

“The president’s vision is good, but it needs to be augmented and checked against reality,” Kaptur said. “Markets are still closed to products, and our standard of living is going down by every measure and we’re hemorrhaging wealth.”

Kaptur said she’s concerned that even as Toledo builds its solar-manufacturing potential, unfair foreign competition will kill that effort as it has other industries.

“First Solar is expanding in this area, but they are building plants overseas, and they already have manufacturing in Malaysia,” she said. “Without proper financing and without protection of patents, we’re going to see a bleed in the green-job economy like we’ve seen a bleed in other sectors.”

U.S. Rep. Bob Latta, R-Bowling Green, said Saturday that he was concerned about President Obama’s comments.

“We don’t have two decades — there are people out there hanging on by their fingernails,” Latta said. “If the cap and tax bill in Congress becomes law it’s going to be a death knell for businesses in Ohio.”

He said if the cap-and-trade legislation — the American Clean Energy and Security Act of 2009 pushed by congressional Democrats — becomes law it will drive the cost of energy up and cost Ohioans jobs. The legislation proposes to reduce carbon emissions by 17 percent by 2020 to slow global warming.

Latta said the answer to the nation’s economic problems is “an across-the-board tax cut to stimulate the economy.”

“By doing tax cuts and slowing the growth of federal spending we’ll get the economy going right now, not in two decades,” he said.

U.S. Sen. Sherrod Brown said that when international leaders meet in Pittsburgh, they “should not confuse trade enforcement with protectionism.”

He said manufacturing is the key to the country’s economic strength. “There is no recovery without jobs,” Brown said. “We’re working to position Ohio as the Silicon Valley of clean energy manufacturing, and northwest Ohio is at the center of these efforts. Northwest Ohio is a national leader in solar energy and represents the future of domestic manufacturing.”

But Obama acknowledged that many are suffering in this economy — with unemployment rising to 9.7 percent nationwide last month, or 14.9 million people, and analysts predicting the jobless rate to top 10 percent before the recession ends.

“We are not out of the woods in terms of this extraordinary recession that we’ve gone through. When I came into office, we were losing 700,000 jobs per month,” he said. “What we’ve been able to do is to slow the deceleration of the economy, and now we’re starting to see an upswing. Even in manufacturing, we saw for the first time an improvement on that front. That will have a good effect for everybody.”

Gov. Ted Strickland credits the president for the turnaround.

“Our nation was on the brink just a few months ago, and without President Obama’s stimulus, I think the economy may have fallen off the cliff and perhaps never would have recovered,” he said.