Year in Review: Obama Holds End of 2014 News Conference

On Sony, The Interview and North Korea

The first question of the conference was on North Korea, and Obama quickly made news.

President Obama said that Sony made "a mistake" by choosing to pull the release of The Interview due to North Korea's devastating hack on the company's computer systems.

"Sony is a corporation, it suffered significant damage. There were threats against its employees. I am sympathetic to the concerns they face," Obama said. "Having said that, yes, I think they made a mistake."

"We cannot have a society in which some dictator some place can start imposing censorship here in the United States," he said.

Obama also made clear that he wasn't consulted on the decision to pull the film. "I wish they would have spoken to me first."

The president also tried to ensure that Sony's decision would not create a precedent. "Occasionally there are going to be breaches likes this," he said. "They are going to be costly, they are going to be serious … but we can't start changing our patterns of behavior anymore than we can stop going to a football game because there might be the possibility of a terrorist attack," Obama said. "Let's not get into that way of doing business."

The FBI announced earlier Friday it had concluded the Communist regime was behind the Sony hack.

Obama criticized the oppressive North Korean regime for going to such extreme lengths to prevent the release of a satirical film that includes a scene depicting the assassination of its dictator, Kim Jong-Un.

"It says something of interest about North Korea that they decided to have the state mount an all-out assault on a movie studio because of a movie starring Seth Rogen and James Flacco," Obama said, seemingly confusing actor James Franco's name with that of Baltimore Ravens quarterback Joe Flacco (prompting this corrective tweet from the QB). "I love Seth. I love James. But the notion that that was a threat to them I think gives you some sense of the kind of regime we're talking about here."

Obama also said that the U.S. would respond to the cyberattack but gave no specifics, only noting: "We will respond. We will respond proportionally and in a manner that we choose."

The president also said there was no intelligence to suggest North Korea was aided by other countries, despite reports this week that China may have been linked to the attack.

On Cuba

Obama said diplomatically engaging with Cuba is more likely to bring about positive change in the island nation than the decades-old policy of isolation. "What I know deep in my bones is that you have done the same thing for 50 years and nothing has changed, you should try something different if you want a different outcome," Obama said. "And this gives us an opportunity for a different outcome."

"Through engagement, we have a better chance of bringing about change than we would have otherwise."

Just this week, Obama signaled the major policy shift, announcing a number of changes that would loosen regulations on travel, business, and finance. The changes, which will likely begin to go into effect in the coming months, will make it easier for Americans to visit Cuba, spend money there, and bring goods—including, yes, cigars—back.

But that doesn't mean Obama's headed to Cuba anytime too soon. "We're not at a stage here where me visiting Cuba...is in the cards," he said.

Obama also recounted an exchange with Cuban President Raúl Castro on the phone last week for reporters. He said he spent 15 minutes making opening remarks, "which on the phone is a pretty long time," and apologized for speaking at length. President Castro responded by telling him about a time his brother, Fidel, spoke for seven hours straight. "And then President Castro proceeded to deliver his own preliminary remarks that lasted at least twice as long as mine," Obama said, "And then I was able to say, 'Obviously, it runs in the family.' "

The president has come under fire from Democratic and Republican members of Congress for the policy shift. Leading Congressional dissidents Sen. Marco Rubio of Florida, who called Obama the worst negotiator in modern U.S. history.

On Race

"Like the rest of America, black America in the aggregate is better off now than it was when I came into office," Obama said Friday, citing the growth of ecnomic opportunity.

However, he noted that the gap between income and wealth in black America "persists."

Obama said that there's "a growing awareness in the broader population of what many communities of color have understood for some time, and that is there are specific instances at least where law enforcement doesn't feel as if it's being applied in a color blind fashion."

The president was careful to put the current situation in an optimistic light, though. "But I actually think it's been a healthy conversation that we've had," Obama said. "These are not new phenomenon. The fact that they are now surfacing, in part because people are able to film what have just been in the past stories passed on along a kitchen table, allows people to make their own assessments and evaluations and you're not going to solve the problem if it's not being talked about."

Race relations have emerged as a major source of tension within the U.S. in recent months after Grand Juries in New York and Ferguson, Mo., in two separate incidences did not to indict police officers for killing unarmed black men. The moves sparked outrage and protests in cities around the country. A new Gallup Poll shows that 13 percent of Americans believe today that racism is the most important issue the country is facing. That's a sudden jump from the 1 percent who felt that way at the beginning of November.

Americans have not been as concerned about race since 1992 after construction worker Rodney King was badly beaten by Los Angeles police and the incident was videotaped. While Obama made a commitment earlier this during a meeting with civil rights leader to focus on tearing down racial barriers in the final month of his presidency. The White House has pledged to spend $75 million on body cameras for police and the administration released a report in December highlighting the problems of giving police departments previously used military equipment.

"We have more work to do on that front," Obama said at the presser. "This was a legacy of a troubled racial past of Jim Crow and slavery."

On Congress

The president made it clear that despite a long and bitter relationship with Congress, he is prepared to make a new start with the Republican-controlled body next year.

"I want to work the this new Congress to get things done," he said Friday.

Obama pointed to the most recent spending bill that passed out of Congress as a sign of things to come. The cromnibus bill included plenty for Republicans and Democrats to be upset about, but moderates from both parties came together to pass the legislation.

The president also called on Congress to help build a stronger defense against cyber security attacks like the ones mounted recently. He also outlined that tax reform was another potential area where Congress and the White House could work together. The president said he was looking for more "simplicity" and "fairness."

"There are companies that are parking money outside the country because of tax avoidance," Obama said. "We think it is important everyone pays something."

Obama said that he hopes that the Republican Congress would be able to tackle corporate tax reform, lower rates and eliminate loopholes while also providing a "mechanism" where infrastructure could get built.

The president acknowledged that he cannot unilaterally bring down the trade embargo against Cuba. So far, the Republican party is divided on the issue, but incoming Republican Majority Leader Mitch McConnell has said he sympathizes with Sen. Marco Rubio, R-Fla., who is opposed to the new relaxation of relations with Cuba.

"I think there are real opportunities to get things done in Congress," Obama said. Still, the president warned Republicans that he would not be backing down on key issues that have been the core of his presidency issues like healthcare and consumer protections.

On the Economy

On the economy, Obama said in his opening statement that the U.S. saw its strongest year of job growth since the 1990s, adding that U.S. businesses have created nearly 11 million jobs this year. He said the country needs to "make sure that the middle class is the engine that powers our prosperity for decades to come."

He noted that nearly all of the jobs added have been in full-time positions, and have seen recent pickup in higher-paying industries.

The president focused particularly on the role played by manufacturing, the energy sector and the auto industry in driving the American economy. Obama said the U.S. is now the top producer of oil and natural gas in the world, and that drivers have saved 77 cents a gallon on gas compared to last year.

Obama declared the "rescue" of the auto industry "officially over," saying the government has repaid taxpayers "every dime and over" for the $80 billion bailout the government gave the auto industry starting with the recession in 2008. This year, Obama said, the auto industry saw 500,000 new jobs.

On His Own Presidency

Despite his lame-duck status, Obama said he wouldn't stop working for ordinary Americans in the two years ahead. He also made a basketball reference, telling reporters he was excited for the final part of his term.

"My presidency is entering the fourth quarter," he said. "Interesting stuff happens in the fourth quarter. And I'm looking forward to it."

As for his controversial executive action on immigration last month, he took a hard line against an incoming Republican congress that has vowed to fight him on that issue and others, defending his decision to use his unilateral authority.

He warned congressional Republicans that he intends to "continue to do what I've been doing," in using those orders, "which is where I see a big problem and the opportunity to help the American people, and it is within my lawful authority to provide that help, I'm going to do it."

Though he did offer an olive branch—in the form of a truncated lesson on how a bill becomes a law—it will almost certainly draw the ire of Republican leaders.

"There's a very simple solution, and that's pass bills and work with me to make sure I'm willing to sign those bills," he said. "Because both sides are going to have to compromise. On most issues, in order for their initiatives to become law, I'm going to have to sign off, and that means they have to take into account the issues that I care about, just as I'm going have to take into account the issues that they care about."

Fin

Obama ended the news conference on a hopeful note on the American character. "What I don't think is always captured in our political debates is that the vast majority of people are just trying to do the right thing, and people are basically good and have good intentions," he said. "America knows how to solve problems. And when we work together, we can't be stopped."

Before he stepped away from the podium, the president signed off in Hawaiian. "And now I'm going to go on vacation. Mele Kalikimaka, everybody," he said, which means "Merry Christmas."

"Mahalo!"

Dustin Volz, Kaveh Waddell, Emma Roller, Lauren Fox, Rebecca Nelson, Brian Resnick, Matt Berman contributed to this article.