White House Marks Financial Crisis Anniversary With Bid For Credit
WASHINGTON (AFP) – On Sunday, the White House marked the fifth anniversary of the financial crisis with a new bid to claim credit for “bold” emergency economic rescue measures it said worked better than anyone expected.
Officials also used the public relations push, including a 49-page report on the administration’s response to the meltdown, as a political warning to Republicans of the “self-inflicted wound” threatened by a new debt showdown.
President Barack Obama’s top economic advisor Gene Sperling argued that the administration’s difficult calls across the banking sector, auto industry and in housing and finance had stabilized the U.S. economy.
“The president undertook a series of bold, unprecedented and politically difficult measures in 2009 that have performed better than virtually anyone at the time predicted,” said Sperling, director of the National Economic Council (NEC).
Ironically, Sperling spoke to reporters just before news broke that one of the architects of those policies, Lawrence Summers, a former NEC chief, said he was withdrawing from the race to be the head of the Federal Reserve.
Summers, a polarizing figure in Washington, said he feared his Senate confirmation process would be too contentious.
The new economic crisis report touted Obama’s speedy response to the crisis when he took office in January 2009, at a time when the economy was losing 800,000 jobs a month and the possibility of a depression loomed.
It said measures like the Troubled Asset Relief Program (TARP) inherited from the Bush administration had stabilized the financial system while recouping the Treasury’s investment and keeping credit and lending open.
The report argued that stress tests established for U.S. banks by the Treasury had saved the banking system and were now a model for the rest of the world.
And the report also touted the U.S auto bailout, controversial at the time, which has seen GM and Chrysler emerge from bankruptcy and create 340,000 jobs since 2009, in a new period of prosperity for the iconic U.S. industry.
Sunday’s report was released as Obama seeks to turn the focus away from foreign policy — specifically Syria and Egypt — to the economy.
The president will make a speech on the crisis at the White House on Monday, address businessmen on Wednesday and visit a Ford plant in Kansas City on Friday.
The latest initiative, on the fifth anniversary of the collapse of Lehman Brothers investment bank which triggered the worst crisis since the Great Depression, also coincided with the opening shots in a new fiscal showdown in Washington.
Obama warned Sunday he would not negotiate with Republicans seeking concessions in return for lifting the $16.7 trillion U.S. borrowing limit, without which the government will go into default.
“What I haven’t been willing to negotiate, and I will not negotiate, is on the debt ceiling,” Obama told ABC News.
Sperling added that it would not be responsible to risk progress made since the recession with a spell on the “high wire” of a threatened default.
“We came back from the brink, we avoided a second Great Depression — but we all agree that we have a lot further to go to get jobs growing, to get unemployment down to where we need it to be,” Sperling said.
A confrontation is also looming between Obama and Republicans on the government’s operating budget for the next fiscal year.
If no deals are reached within weeks, the government could be shut down by the beginning of October, and it could begin defaulting on its debts by the middle of the month.
Obama has made repeated efforts to refocus his crisis-hounded administration on the economy and to claim credit for often unpopular measures like an $800 billion stimulus plan and a huge bank bailout.
Though he defied conventional wisdom in winning re-election despite a soft economy last year, the president still bears the scars of the crisis.
In an NBC Wall Street Journal Report last week, only 27 percent of Americans said they thought the economy would get better over the next year, while 52 percent disapproved of how Obama was handling the economy.
Though the crisis has passed, home prices remain well below their pre-recession peak and unemployment, which rose as high as 10 percent, remains at 7.3 percent.
Obama’s Republican foes will argue this week that the president’s spending programs and tax policies are to blame for slowing the pace of recovery.
They are also sure to mock his new attempt to “pivot” to the economy.