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Obama Urges Wall Street to Protect the Middle Class

Senator Barack Obama chastised Wall Street executives yesterday as failing to protect middle-class interests and called for increased federal oversight of credit rating agencies, including a government investigation.

In an appearance at Nasdaq offices in Midtown Manhattan, Mr. Obama, a Democratic presidential candidate, praised America’s free-market impulse but lamented what he characterized as its recent toll on the middle class.

Some workers, he said, “now compete with their teenagers for minimum-wage jobs at Wal-Mart because their factory moved overseas,” and he described this summer’s subprime lending crisis as a case study of greed among mortgage lenders and the agencies that provide information about them.

“Our free market was never meant to be a free license to take whatever you can get, however you can get it,” Mr. Obama said. “And so from time to time, we have put in place certain rules of the road to make competition fair and open and honest.”

The speech came a day before the Federal Reserve is expected to reduce interest rates in response to strains on the economy growing in part out of a credit squeeze set off by problems in the mortgage market. With some analysts saying the risk of a recession is increasing, the economy and the financial markets are getting more attention from the crowded presidential field.

Mr. Obama of Illinois called for regulatory efforts to increase transparency and accountability among financial companies. Mr. Obama zeroed in on the housing market, proposing tighter federal rules on mortgage fraud and government rating systems for mortgages and credit cards.

“If more Americans were armed with this kind of information before they purchased risky mortgage loans,” he said, “the current crisis might not have happened.”

A spokesman for Mr. Obama, Bill Burton, said the proposed inquiry was inspired by a planned European Commission investigation into credit ratings practices in Europe. The inquiry, Mr. Burton said, would be spearheaded by the Securities and Exchange Commission.

Mr. Obama made his remarks before an audience of Wall Street executives, a highly coveted prize in the presidential fund-raising game. He leads the other Democratic candidates in attracting donations from the securities and investment industry, recording more than $3.3 million in contributions through last quarter, according to the Center for Responsive Politics, a campaign finance watchdog group. (Only Rudolph W. Giuliani, a Republican, has received more money from the investment sector.)

At the start of his talk, Mr. Obama described the early days of the Great Depression and cited the economic policy of a prominent presidential contender from the time: Franklin D. Roosevelt. The senator quickly softened the comparisons. “We certainly do not face a test of the magnitude that Roosevelt’s generation did,” he said. “But we are tested still.”

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