JP Morgan headquarters in New York. In his weekly radio address, President… (Timothy A. Clary, AFP/Getty…)
WASHINGTON — Aiming squarely at GOP critics of Wall Street reform, President Obama said Saturday that investment bank JPMorgan's stunning $2-billion loss serves as a reminder of the importance of Washington's role in preventing another financial crisis.
The 2010 financial overhaul law counts among Obama's signature legislative achievements, but it continues to come under attack by Republicans in Congress and on the campaign trail, including likely presidential nominee Mitt Romney, as an example of government overreach.
"It's so important that members of Congress stand on the side of reform, not against it, because we can't afford to go back to an era of weak regulation and little oversight, where excessive risk-taking on Wall Street and a lack of basic oversight in Washington nearly destroyed our economy," Obama said in his weekly radio address. "We can't afford to go back to that brand of 'you're-on-your-own' economics."
The losses announced by JPMorgan Chase & Co. have reignited debate over the government's role in regulating the financial industry.
Republicans have sought to delay or dismantle key provisions of the 2010 Dodd-Frank law, calling it a prime example of this White House's over-regulation of private markets. Romney has said he would repeal the law and replace the new regulations with a more streamlined approach.
House Republicans recently approved budget reductions that chisel away at elements of Dodd-Frank, and they have particularly targeted the funding needed to operate a new consumer protection bureau.
Yet Obama must tread carefully as he tries to make a case for government oversight of the financial industry. Many Americans still hold critical views of the administration's bank and auto industry stabilization plans, polls show, and believe that Washington should not provide bailouts or play an oversize role in business affairs.
"I believe the free market is one of the greatest forces for progress in human history; that businesses are the engine of growth; that risk-takers and innovators should be celebrated," Obama said. "But I also believe that at its best, the free market has never been a license to take whatever you want, however you can get it."
Obama did not mention by name JPMorgan or its chief executive, Jamie Dimon, who has fought some of the tougher rules.
Republicans did not address financial reform directly in their weekly radio address, but they criticized Obama and Democrats in Congress for failing to approve an annual budget beyond the one agreed to last year.
Republicans said the White House and its Democratic allies in Congress didn't want their "fingerprints" on a budget that accomplishes their goal of raising taxes.
"The president and members of his administration are true believers in big government," said Sen. Ron Johnson (R-Wis.). "Instead of concentrating on job creation, President Obama has concentrated on growing government and increasing its control over our lives."