The White House is using the sixth anniversary of the failure of the investment bank Lehman Bros. and the near-collapse of Wall Street to tout its response to the crisis and its economic record.
“While more work remains to continue digging out of the deep hole that was left by the crisis, this week offers a chance to reflect on the significant progress that has been made since then in strengthening the economy and reforming the financial sector,” Obama economic adviser Jeffrey Zients wrote in a blog post published Monday morning.
Zients, who served in the Office of Management and Budget during the early days of the Obama administration and now is the director of the National Economic Council, takes note of the progress the U.S. economy has made since the president responded after taking office during the crisis.
In particular, he praises President Obama’s leadership in putting General Motors and Chrysler through managed bankruptcies and for taking over management of the TARP bailout of banks from the Bush administration.
“Today, it is clear that the TARP program was a success,” Zients said. “Without the government’s forceful response, the damage would have been far worse, and the costs to repair the damage would have been far higher.”
While $425 billion has been disbursed under TARP, according to a fact sheet released by the National Economic Council and the Treasury, $440 billion has been repaid, including some non-TARP funds paid to the Treasury by bailed-out insurance company AIG. The Treasury has received $29.5 billion more from banks than the $245.1 billion it paid out during the crisis.
The fact sheet also says that the changes to the financial system made by the 2010 Dodd-Frank reform law mean that “as a matter of law, taxpayers no longer will bear the costs for a failing financial institution” — phrasing that Treasury Secretary Jack Lew has used in answering questions about whether there will be bailouts in the future.
