"We were seeing changes around the world -- countries like China and India rising; areas like the Middle East becoming less stable; the world shrinking because of technology, much of it invented right here in this region," Obama said in his remarks at a fund raising event in San Francisco.
"So I think we understood that we were going to have to adapt in some fundamental way in order to make sure that our kids and our grandkids ended up inheriting the kind of America that we inherited," he said.
Noting that there are moments in history that are inflection points, Obama said he understood this in 2008 that the US was entering into one of those periods.
"Domestically, we had gone through a decade in which the economy was growing but it was growing on top of a bubble.
And people at the very top were doing very well, but the wages and incomes of ordinary families had flatlined, and we were starting as a government to live beyond our means with tax cuts and two wars that weren't paid for," he said.
"So I think people understood even before the recession hit that somehow the way our economy was operating was not conducive to long-term sustained economic growth or making sure that everybody had a chance at the American Dream," Obama said.
Soon thereafter his speech was interrupted by a group of people attending the fundraising. Through a song they protested against the alleged mistreatment of WikiLeaks suspect Bradley Manning.
Earlier this week, Obama created controversy by targeting "cheap health care" in countries like India and Mexico arguing that Americans should avail of "high quality" treatment available here.
"My preference would be that you don't have to travel to Mexico or India to get cheap health care. I'd like you to be able to get it right here in the United States of America that is high quality," Obama said at a community college in Virginia.
Earleir, Obama's remarks on American companies outsourcing jobs to Indian firms had stirred a controversy in India.