Obama, citing Madoff, vows tougher regulation

(JEFF HAYNES/Reuters)

President-elect Barack Obama announced the newest members of his economic team today, citing the still-unfolding fraud case of money manager Bernard L. Madoff as the latest evidence of how weak Washington's financial regulation has been.

Obama reiterated his vow to overhaul the regulatory system in announcing long-time financial regulator Mary Schapiro to head the Securities and Exchange Commission, former Clinton administration official and Senate Banking Committee adviser Gary Gensler as chairman of the Commodity Futures Trading Commission, and Georgetown law professor Dan Tarullo as a governor on the Federal Reserve Board.

Obama said the economic stimulus plan his team is crafting with Congress is only one piece of the financial recovery he envisions for the struggling country. "What will be just as important to our long-term economic stability is a 21st-century regulatory framework to ensure that a crisis like this can never happen again," he said.

The president-elect called the Madoff case "a massive fraud that was made possible in part because the regulators who were assigned to oversee Wall Street dropped the ball."

"That's a failure we can't afford," he said, also casting blame on Congress and President Bush for being "asleep at the switch."

Obama also responded to criticism -- from gay-rights activists and others -- of his decision to ask prominent California evangelical pastor Rick Warren to deliver the invocation at his inauguration. Warren opposes abortion rights, and he advocated for the passage of Proposition 8 in California, which outlawed gay marriage.

Obama, who supports abortion rights but opposes gay marriage, said being able to disagree civilly is part of the "magic" of America.

"It's part of what my campaign's been all about -- that we're not going to agree on every single issue, but what we have to do is be able to create an atmosphere where we can disagree without being disagreeable and then focus on those things that we hold in common as Americans," he said. "There are going to be a wide range of viewpoints that will be represented and that's how it should be, because that's what America is about."