US President Barack Obama defends economic legacy, rebukes 'fantasy' Republicans

US President Barack Obama walks to a ceremony at the White House.
US President Barack Obama walks to a ceremony at the White House. PHOTO: REUTERS

WASHINGTON (AFP) - In the twilight of his presidency, Barack Obama has moved to defend his economic legacy and handling of the 2008 crisis, saying the financial system is now "substantially more stable".

Obama, in an interview published Thursday in The New York Times Magazine, also dismissed the "fantasy" economic platforms of Republican presidential candidates vying to succeed him at the November general election.

The financial sector "is bigger, absorbs more resources and maybe most importantly, more talent than I would like to see", the president admitted.

"I would like folks who are really good at math to be going into engineering and the sciences more than they're going into trying to build algorithms to beat the market and to work arbitrage.

"But there is no doubt that the financial system is substantially more stable."

Obama suggested that calls by Bernie Sanders, the Democratic presidential candidate and senator who has called for big banks to be broken up, were unrealistic.

"It is true that we have not dismantled the financial system, and in that sense, Bernie Sanders's critique is correct," Obama said.

"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."

 

And Obama, who leaves office in January, also gave a withering assessment of what he sees as the unrealistic economic pledges of Republican hopefuls in the race for the White House, led by billionaire businessman Donald Trump.

"They don't simply defy logic and any known economic theories, they are fantasy," 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 five percent or seven 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".