Video Transcript:

GLORIA PENNER (HOST): Monday marked the first anniversary of the collapse of Lehman Brothers, the largest bankruptcy in U.S. history, which touched off a global financial crisis.  President Obama spoke on Wall Street about how the economy is showing signs of stability...but he also spoke about the need for financial institutions to learn from past mistakes.

PRESIDENT BARACK OBAMA (President, United "The storms of the past two years are beginning to break.  The growing stability resulting from these interventions means we're beginning to return to normalcy.  But here's what I want to emphasize today.  Normalcy cannot lead to complacency...We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis.  Where too many were motivated only by the appetite for quick kills and bloated bonuses.  Those on Wall Street cannot resume taking risks without regard for consequences and expect that next time American taxpayers will be there to break their fall..."There are those who argue we should do less or nothing at all there will be those who engage in revisionist history or have selective memories and don't seem to recall what we just went through last year.  But to them I'd say only this.  Do you really believe that the absence of sound regulation one year ago was good for the financial system?  Do you believe that the resulting decline in markets and wealth and unemployment, the wrenching hardship that families are going through all across the country was somehow good for our economy?  Was that good for the American people?"  

PENNER (HOST): Joining me now to talk about the direction of the economy are: Tom York, editor of the San Diego Business Journal.  And Tony Perry, San Diego Bureau Chief of the Los Angeles Times.  Welcome, gentlemen...
Tom, let me start with you. Obviously the president wants regulation of the financial markets. Why should he get what he wants? 

TOM YORK (Editor, San Diego Business Journal): Why should he get what he wants? Well, I don't think should get that. I disagree with the president. I think taking risk is at the heart of the free enterprise system, and if you take away the risk-taking, you're taking away the heart of the system. I think there's too much emphasis on regulation. I think there's a number of other factors that figured into what happened last September, and going forward from there, and uh, you know basically things are getting back to normal without government intervention. 

PENNER: But, risk-taking, isn't that one of the things that led us into this recession in the first place, Tony? 

TONY PERRY (San Diego Bureau Chief, The Los Angeles Times): It is. And also greed, and also this compensation situation in which the man at the top makes an unbelievable amount and it all trickles down, so everyone's just thinking about the next paycheck. I disagree with Tom, I'm big on regulation. I think we've been unregulated and now we're all paying the price. But I also think that regulation alone won't work. And what scares me is that greed will once again be in control. And even if there's regulation, folks who have a certain mentality. will say, 'How can I gain in this situation? How can I put myself first even if it causes heartache to other people. 

PENNER: O.k. So we'll take you now from the national perspective on the state of the economy to a local one. On Tuesday, San Diego city mayor Jerry Sanders made what city officials are calling a major speech. Sanders predicts a hard road ahead with an even bigger budget deficit and a lot of tough decisions. And despite all this, his plan is to build, build, and build. 

MAYOR JERRY SANDERS (Mayor, San Diego): Next year's deficit is expected to dwarf all of its predecessors, and if we are to protect our service levels we need ideas from every corner of the City 
As we look for ways to protect our General Fund and the city services it provides, we cannot allow our judgment to be clouded by the defeatists who think the only response to a weak economy is to abandon our aspirations.    I'm fully aware that, in times of economic upheaval, some people want government to stop in its tracks.  They think progress was all right for previous generations, but it's taken us about as far as it can.  During this time of economic hardship, I would never ask residents to choose between funding basic services and investing in discretionary capital projects.  Each of the following initiatives will be funded by revenues generated by the projects. Put another way, the money we invest in the projects would not exist but for the projects themselves.  The list should be familiar to most of you: • a third-phase expansion of the San Diego Convention Center, which over two decades has proved to be one of the smartest investments this city ever made, • the replacement of City Hall, which is a ticking time bomb of foreseeable expenses and potentially massive liabilities, • and the replacement of our Central Library, which the City outgrew during the Ford Administration.  Each of these projects is moving forward in a deliberate and thoughtful way, and gaining support at every stage, not just because they mean jobs for San Diegans, but because they make sense for San Diego.

PENNER: So Tony, why is the mayor focusing on some massive capital expansions rather than on the immediate problems that we have with the city, the sewer systems, the broken streets, potholes. 

PERRY: I think he's doing both. Not in that speech, necessarily. That was kind of a declaration of independence by Jerry Sanders, saying, "I'm not going to be hemmed in by the thinking of the past, I'm going to think by San Diego standards, rather boldly." He is talking about the other. He talked about city services. That was his Declaration of Independence. Now, the declaration is one thing, the war is another. Let's see how these things going to be financed. He said they're going to be through revenue that will be generated by the projects themeselves. Yes, but what do you put in that great big new library, that will come from general fund money, probably. 

PENNER: Tom, do you agree? Do you think that these projects might have some significant impact on our local economy? 

YORK: I think that the projects themselves would be positive for the economy. The question is how do we pay for them. For example, we're talking about $1.6 billion worth of new construction here. I think that would prove a boon beyond any share of our stimilus that we get from our federal government. It would prove a boon to our economy. But the real issue here is how do we pay for this? Where does the money come from? How do we structure it? And, you know the mayor was big rhetoric, but short on details. 

PENNER: So, what are some of the current economic problems, that you would like to see the mayor address first, before he starts talking about big buildings? 

YORK: Well, the city has this unfunded pension liability that's facing us straight on. In fact, today they're discussing whether or not to change sort of the terms of how this unfunded liablity will be taken care of. You know it's a huge problem. It hasn't been solved. It
s been around for years and I think that the mayor really needs to focus on dealing with that straight on and getting that solved before moving on to more bigger projects. 

PENNER: I was thinking about the City Council this week not even agreeing on where the homeless are going to be living during the winter. I mean, isn't that-- shouldn't that be a priority before the city council and for the mayor? 
 
PERRY: Sure, it's a priority. What to do this winter and in this year pension, but I think the out years are also priority? What are we going to do in the next decade and as the mayor pointed out the library has been out-moded since the days of Jerry Ford. All of San Diego's major buildings, the sports arena, the library, the city administration building were all built small and cheap and were outmoded. What Jerry Sanders is trying to do is say, "San Diego, let's think a little larger, even though things are bad. Now, talk is one thing, finding the money is another. 

PENNER: Tom? 

YORK: Well, you know talk about expanding the Convention Center, I mean tourism is down 30 percent from where it was a year ago. So, are we going to go in in a time when tourism is down and add further tax burdens on our tourism industry. It just doesn't make sense at this point and time to do that. 

PENNER: It doesn't, but the mayor may also be making another point here. His whole attitude, his approach during the speech was quite different. 

YORK: Right. It's think big, act big. I think it's OK to say that, but you have to have some details to back it up and I think the details are sadly lacking here.