JUDY WOODRUFF: Today, Barack Obama was in New York, where Mayor Michael Bloomberg introduced him for his speech on the economy.
SEN. BARACK OBAMA (D), Illinois: As most experts agree, our economy is in a recession. To renew our economy and to ensure that we are not doomed to repeat a cycle of bubble and bust again and again and again, we need to address not only the immediate crisis in the housing market; we also need to create a 21st-century regulatory framework; and we need to pursue a bold opportunity agenda for the American people.
Most urgently, we have to confront the housing crisis. Over 2 million households are at risk of foreclosure. Millions more have seen their home values plunge. Many Americans are walking away from their homes, which hurts property values for entire neighborhoods and aggravates the credit crisis.
To stabilize the housing market and to help bring the foreclosure crisis to an end, I've sponsored Senator Chris Dodd's legislation creating a new FHA housing security program, which will provide meaningful incentives for lenders to buy or refinance existing mortgages. This will allow Americans facing foreclosure to keep their homes at rates that they can afford.
Now, Senator McCain argues that government should do nothing to protect borrowers and lenders who've made bad decisions or taken on excessive risk. And on this point, I agree.
But the Dodd-Frank package is not a bailout for lenders or investors who gambled recklessly. They will take their losses. It's not a windfall for borrowers, as they will have to share any capital gain.
Instead, it offers a responsible and fair way to help bring an end to the foreclosure crisis.
It asks both sides to sacrifice, while preventing a long-term collapse that could have enormous ramifications for the most responsible lenders and borrowers, as well as the American people as a whole. That's what Senator McCain ignores.
For homeowners who were victims of fraud, I've also proposed a $10 billion foreclosure prevention fund that would help them sell a home that is beyond their means or modify their loan to avoid foreclosure or bankruptcy.
It's also time to amend our bankruptcy laws so families aren't forced to stick to the terms of a home loan that was predatory or unfair.
But beyond dealing with the immediate housing crisis, it is time for the federal government to revamp the regulatory framework dealing with our financial markets.
Our capital markets have helped us build the strongest economy in the world. They are the source of competitive advantage for our country. But they cannot succeed without the public's trust.
The details of regulatory reform should be developed through sound analysis and public debate, and so I won't try to cross every t and dot every i in this speech. But there are several core principles for reform that I intend to pursue as president.
First, if you can borrow from the government, you should be subject to government oversight and supervision.
Secretary Paulson admitted this in his remarks yesterday. The Federal Reserve should have basic supervisory authority over any institution to which it may make credit available as a lender of last resort.
When the Fed steps in, it is providing lenders an insurance policy underwritten by the American taxpayer. In return, taxpayers have every right to expect that these institutions are not taking excessive risks.
The nature of regulation should depend on the degree and extent of the Fed's exposure. But at the very least, these new regulations should include liquidity and capital requirements.
We need policies that once again recognize that we are in this together and we need the most powerful, the wealthiest among us -- those who are in attendance here today -- we need you to get behind that agenda.
It's an agenda that starts with providing a stimulus that will reach the most vulnerable Americans, including immediate relief to areas hardest hit by the housing crisis, and a significant extension of unemployment insurance for those who are out of work.
If we can extend a hand to banks on Wall Street when they get into trouble, we can extend a hand to Americans who are struggling often through no fault of their own.
JUDY WOODRUFF: The candidates are certainly to continue to emphasize the economy on the stump, as voters grow increasingly concerned about their financial well-being.
And you can read the full transcripts of the candidates' speeches on the economy on our Web site. That's at PBS.org.